Tier 4 regs driving contractors to buy lower-tiered used equipment

Updated Dec 30, 2016

wheel loader dirt stockIf you suspected that contractors are snapping up as much used Tier 3 equipment as they can get their hands on, now there’s proof.

A recent survey conducted by the Independent Equipment Dealers Association (IEDA) found that the Environmental Protection Agency’s Tier 4 emissions mandates for diesel powered off-road equipment are driving up demand for equipment with less complex and less costly exhaust emissions technology.

IEDA members report seeing resale prices on the lower tiered equipment increase as much as 20 percent. And more than 50 percent of the survey respondents said that quality used equipment is getting harder to find.

ieda_logo“Our members buy and sell used equipment globally, which makes them well aware of market trends,” says Drew Van Brunt, IEDA President and Owner of Global Tractor Company in Colleyville, Texas. “As a group, we make it a point to share trends we see in the market with each other, as well as with used equipment buyers and sellers. The current used equipment market is strong, but it will be affected by Tier 4 machines in the near future.”

The survey also found that members are unsure how well Tier 4 machines will hold their value when these models hit the used equipment market. Thirty-seven percent think the Tier 4 machines will not retain their value as well as non-Tier 4 equipment. But others said that Tier 4 machines could have better resale value if more construction projects require the use of best available emissions technology.

Currently there are few Tier 4 machines in the used equipment market. IEDA members say that this market is four to eight years away from becoming dominant, and at that point non-Tier 4 machines will be harder to find and pricing on Tier 4 equipment will level out.