How used machinery is valued

Sellers often come to us with a figure in mind, taken from the balance sheet or from what the machine cost new. The auction market rarely agrees with either number. This guide explains what moves the price of a used machine, and why the guide price we give you may look nothing like book value.

What buyers are paying for

A buyer of a used machine is paying for what it will do for them, less what it will cost them to get it working in their own building. Everything in a valuation feeds one of those two sides.

On the first side: the make, the model, the age, the hours or cycle count, the condition, the tooling and accessories that come with it, and whether it is a current model with parts and support available. On the second side: the cost of disconnection, removal, transport, reinstallation and commissioning, plus any repair the buyer expects to make.

Make, age, hours and condition

Some makes hold value, because parts are available, the controls are familiar and the build is known. A machine from a maker that has gone out of business, or with a control system that is no longer supported, is harder to place however good the condition, because the buyer takes on the risk of a fault they cannot fix.

The same applies to obscure imports. A machine that cannot be identified is hard to assess, and that uncertainty comes off the price.

Age matters less than hours and care. A ten year old machine with low hours and a service history can outsell a five year old machine that has run three shifts a day and never been maintained. Hour meters, spindle hours and cycle counts are the evidence, so make sure they are readable.

Condition is judged on the day, by eye, by buyers who know what to look for. Worn ways, backlash, leaks, damaged guards and missing panels all take money off. So does a machine that cannot be run safely for demonstration, because there is less for a buyer to go on.

Tooling and accessories

Tooling carries value of its own. A machining centre with a full set of tool holders, a fourth axis, a probe and a chip conveyor is a different lot from the bare machine, and it is valued as one, because there is less for the buyer to buy new. Keep tooling with the machine it belongs to.

Demand, location and the cost of removal

Prices move with demand in the trade that uses the machine. When a sector is busy there is more competition for its equipment; when it is quiet there is less. Whether the type is still in general use matters as much as the condition. Our guide reflects the market as it is now, not as it was when you bought.

Location matters too, because it feeds the cost of collection. A machine on a level floor near a loading door costs less to take away than one at the end of a single track lane in an upstairs workshop, and that difference comes off the bid.

Every buyer works out what it will cost to get the machine out of your building and into theirs. Heavy items, bolted down items and anything that needs a crane or a specialist rigger cost more to move, and that cost comes straight off the bid. If a machine is worth less than its removal cost, it has a negative value on your site, and the honest advice may be to scrap it in place.

Reserves and unreserved sales

A reserve is the minimum price you will accept. Set it too high and the lot does not sell, and the site still has to be cleared. Set it at a level the market can reach, or offer the lot without a reserve, and the bidding decides the price. An unreserved lot goes to the highest bidder whatever the level, so the decision is how much certainty over price you need.

We will advise on reserves lot by lot, with the likely interest, the removal cost and your deadline in mind. On high value items a reserve is the usual way to protect against a thin market on the day.

Why guide prices differ from book value

Book value is an accounting figure. It is cost less depreciation over a set number of years, and it says nothing about what anyone would pay. Insurance value is replacement cost new, which is higher still. Neither is a market value.

The auction guide is our estimate of what the lot will make in a sale on your site, over a short marketing period, to a buyer who has to remove it. That is the only number that matters when you are planning around the proceeds. If the guide is lower than you hoped, ask us why. There is usually a specific reason, and sometimes it is one you can fix before the sale.