Used Machines With A Difference

Market uncertainty and high new equipment acquisition costs are driving contractors to increasingly look for used equipment solutions. Buying used machines from an authorised dealer with warranty provides peace of mind to businesses, explains Amjad Atieh, Rental and Used Equipment Manager at Mohamed Abdulrahman Al-Bahar.

While used equipment was once primarily bought by small and medium enterprises (SMEs), today used machines are bought by every company in the market, both small and large, says Amjad Atieh, Rental and Used Equipment Manager at Mohamed Abdulrahman AlBahar. Large companies are being more creative and dynamic with their fleets, and watching their costs with the uncertain economic outlook.

For their core equipment fleet and the build of their machines – equipment they are sure will be busy for the next five years – contractors buy new; for machines for additional jobs that they will need for one or two years, they buy used; and for fleet additions during peak activity on a project, they rent, he explains.

For Al-Bahar, Caterpillar dealer for five GCC countries since 1959 (the UAE, Kuwait, Oman, Bahrain and Qatar), the increasing interest in used equipment plays to its strengths. The dealer has a large rental fleet with additional machinery coming off lease and via trade-ins, meaning it has a large pipeline of used equipment to sell. It has been serviced according to standard Caterpillar service intervals, by skilled technicians using genuine spare parts, and with full dealer access to a machine’s service history. Most used machines sold by Al-Bahar come with a warranty, typically 6-12 months, to give peace of mind to buyers, and finance is also available via Cat Financial.

“The main differentiator for us over other [used equipment] suppliers in the region is our Certified Used Brand,” says Atieh. A warranty on a used machine can be costly for a dealer, because they have to absorb additional costs if repairs are needed, but Al-Bahar is confident in the quality of its machines, knowing they have been correctly maintained and serviced. The firm also wants to ensure that clients are fully satisfied, in order to maintain long-standing relationships. “For us it’s about providing a solution to our customers,” says Atieh. “So we do everything possible to ensure the machine is thoroughly inspected and serviced – the engine, transmission, hydraulic system, checking for leaks, the body – we make sure to rectify and repair every single issue to the highest standard, using professional service technicians and using all the time Cat genuine parts.”

One satisfied client is United Engineering Construction Co. (UNEC), a Dubai-headquartered general contracting company with extensive experience across the construction industry. UNEC has been buying used machines from Al-Bahar for more than a decade, including telehandlers (TH417, TH514, TH580, TH414), the 950H wheel loader, the CS533 compactor, skid steer loaders (226, 216) and backhoe loaders (422F, 422E) – 42 machines in total.

Key attractions of buying from Al-Bahar were service history transparency (which helps with planning ongoing maintenance), fixed prices and instant quotes. Since longevity was the main concern, the overall goal was to find durable machines with reliable support which would not upset the budget, says Saad Dalbah, Plant Manager at UNEC. “Catcertified used (CCU) machines from Al-Bahar are the best option in the current market if you are in need of good machines with performance and good value.”

Al-Bahar has always focused on customer value, so helping UNEC meet its requirements was its priority. Commenting on the decade-old relationship, Used Equipment Manager Anas Ashour says: “UNEC is a very special customer for us. We are glad they appreciate Al-Bahar for the ease of doing business – starting from the transparency in the service history of the machines, fixed prices and instant quotes they received.”

A more cautious outlook

Al-Bahar offers the used machines most commonly used across rental fleets and by end users. Common models include medium-sized machines in the earth moving segments, including 20-40-tonne excavators, five-tonne payload wheelloaders like the 950 and 966, and D8 dozers, which are the top-selling machines both new and used. Compactors and smaller machines such as backhoe loaders and skid steer loaders are also popular.

Amjad Atieh, Rental and Used Equipment Manager at Mohamed Abdulrahman Al-Bahar.

Most of the used equipment stock is four to five years old, with less than 10,000 hours on the clock and still in its first life. “Our primary focus is to offer high quality, young machines to our customers,” says Atieh.

An advantage of a used machine at around this age is that it has already undergone significant depreciation, meaning the buyer may be able to sell it after a year or two without significant loss depending on the overall market conditions, something that appeals to customers.

“Greater uncertainty in the markets means that customers are trying to limit their risks, including shying away from equipment with high acquisition costs,” explains Atieh. “When customers are considering used machines, they are looking to reduce their acquisition cost, and by that they are reducing their investment and the risk in that investment.”

While brand-new machines have obvious advantages and are indispensable for demanding applications and major projects, used machines fill an important niche, such as applications requiring a machine that runs less than five hours a day on average – or around 1,500 hours a year.

“Part of our salesmen’s responsibility is to advise their customers when it’s better to buy a new machine, and when the used option is the right solution for them. It’s about machine utilisation and the customer’s budget,” Atieh concludes.