According to Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics data, construction material prices rose another 0.8% in June, 2018, and are 9.6% higher than they were at the same time one year ago. For iron and steel, that number is closer to 14%. And for softwood lumber, it’s a staggering 23%. Economists fear tariffs and rapidly rising materials prices are unsustainable for the construction industry.

Stuck in the midst of these pricing increases are thousands of project managers scrambling to keep costs down and to stay within their projected budgets.

As an online marketplace helping contractors buy and sell used heavy construction material and equipment, we’ve have a very simple strategy on how you can stay within your project budget – simply buy used versus new. Here are some of the most frequent questions we have gotten over the years around buying used vs. new.

Q: How much can I really save on used construction material?

A: It depends. For used steel material such as beams we have seen savings as high as 30% and up over new beams. Used construction material prices fluctuate to some degree due to current market prices so while we have seen a slight increase in the cost of used beams, sheet pile, pipe, etc., the savings are huge. Other factors influencing the cost are condition, availability, and sometimes location as you’ll need to factor in freight into your final cost.

Material condition and other factors will determine actual sales price. Savings displayed are average numbers and subject to change.

Q: What do I need to consider when buying used equipment vs new?

A: At Eiffel Trading we like to consider these three things when you look to buy a used piece of heavy equipment.

1. Cost of buying new.

While new equipment prices gone up recently, it doesn’t necessarily mean that the equipment has changed that much. Heavy equipment is built to last and while some features and technology might change over the years, an excavator from five years ago still gets the job done as well as a new one. If you don’t need the latest bells and whistles, buying used will without a doubt save you a ton of money.

1. Getting your money’s worth.

Where a new piece of heavy equipment depreciates between 20 percent and 40 percent in the first year of ownership, a 5-year old piece of equipment can be valued the same five years later. Why is this important? Because if you buy a used piece of equipment for a particular project and decide that you no longer need it after the project is completed, you could end up selling it for the same amount as you paid for it a couple of years ago. That’s a return on investment (ROI), a new piece of equipment can never deliver! At Eiffel Trading, we’re offering a SMART (De)mobilization program, which allows you to first acquire and upon project completion sell a particular piece of equipment seamlessly by leveraging our online marketplace and dedicated equipment team.

1. Where are you shopping for your used equipment?

There are more places to buy used equipment today than ever. But be cautious. It is estimated that construction equipment stolen each year is somewhere between $300 million to $1 billion of which less than 25% is recovered. Our recommendation is to purchase from third-party vendors only, such as online marketplaces, dealerships, etc., who verify ownership of equipment.

Of course, you’ll want to inspect the equipment you’re considering purchasing to ensure the quality of it. When you work with Eiffel Trading, we’ll help with quotes, logistics, inspections, freight, and any other detail needed.

In 2018 so far, Eiffel Trading customers have saved anywhere from 20% to over 30% simply by buying used vs new construction material, including used sheet pile, steel beams, barrier walls, h-pile, pipe, trestle and steel plates. These savings have allowed contractors to win a bid by keeping cost down or to stay within a project budget in the year of unexpected tariffs. What’s your reason for wanting to save money?