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Maximizing The Value, Marketability Of Used Rigs
Vermeer Midwest operates nine locations in Illinois, Indiana, Michigan and Missouri.
Gary Bridwell, president of Ditch Witch of Oklahoma, also says slow sales have meant fewer trade-ins, reducing the number of used machines on hand. Because there isn't a flood of old machines hitting the market, he is confident the used models on hand will sell at reasonable prices.
"The recession that began in late 2008 is not comparable to 2000," he says. "Broadband products suddenly stopped in 2000, and contractors who did nothing but broadband were out of work. But there still were gas and power distribution, and water and sewer projects. This time, all markets are affected, and one of the most critical differences is the financial market is caught up in the recession. Financing still is not back, but we're starting to see signs that raise hopes. However, nationally, the big credit houses are still tight with money."
American Augers, long a specialist in large drill rigs, typically does not take trade-ins and does not offer used equipment for sale, says President James Pfeiffer.
"The market for big HDD machines is very specialized," he says. "The equipment is expensive, so most buyers run them for a long period of time and put a lot of hours on them. Ninety percent of our customers don't trade up to a machine, but keep the machines they have when buying a new or bigger model. They may sell them later – either directly or through a broker."
While drill rig manufacturers wait for sales to pick up, used equipment will remain a viable option for organizations needing to purchase HDD equipment. Used HDD equipment can be attractive to many buyers because even though refinements and improvements are continually added to the new models, most four or five year-old machines have the same basic features of comparable models made in 2009.
Other than low hours and a machine that has been well maintained, what should used drill rig buyers look for when evaluating a used machine?
Van Soelen and Bridwell say drill rod is the first thing to check.
"Worn drill rod is an indicator of high use," Van Soelen says. "On newer models, check
rack and pinion drive and with older machines drive chain and cylinders beneath it."
Bridwell says because drill string is the biggest expense on a machine, worn drill pipe will have to be considered in the purchase price because it will have to be replaced. Condition of the engine, tracks, hydraulic motors and pressures are other indicators of condition.