Time to sell or buy a used CNC?

Some tool builders in the expanding economy are having a hard time obtaining machine components, which is delaying production, said Logan McGhan, technical salesman at KD Capital Equipment LLC, Scottsdale, Ariz., a machinery dealer specializing in used CNC machinery, plastic molding machinery and sheet metal fabrication. He said U.S. manufacturers must meet delivery deadlines in a demanding market.

“You could potentially lose a customer,” McGhan said, adding he is hearing about wait times of 6 months to a year for certain machinery.

This environment may make it a good time for some companies to buy or sell used CNC equipment, even if doing so is new for them.

“Buying or selling a used machine can be a really powerful tool for an organization,” he said. “It could be the only way to go right now to bolster your company in this market.”

For sellers, there are numerous benefits, said John Butz, CEO of machinery dealer Resell CNC, Maitland, Fla. He listed getting money for inactive equipment, freeing up floor space and especially upgrading technology as common reasons to sell.

“Companies are moving more toward multiaxis machines,” he said. “More technology, less hands. It’s a progression of what’s happening in our world today.”

Butz said money received from sales of used equipment is often used as down payments for new technology or machinery. Section 179 of the IRS tax code, which governs how businesses deduct expenses for purchases of equipment and software, also comes into play.

“A lot of people do it for tax reasons so they can take advantage of bringing in assets that can be utilized to increase their business while writing their purchase off,” he said.

Because every sale is different, the first thing McGhan has a seller do is photograph all sides of a machine so it can be evaluated by his company. He said all equipment has value, whether the piece is active, old or broken.

“There’s good, better and best,” McGhan said. “I wouldn’t say there’s ever trash.”

Selling scrap for parts is always an option for machinery that is in the worst shape.

“Customers need replacement parts to keep their machines running,” he said. “Used machines represent a lot of value to American manufacturing.”