One trend stood out for all the wrong reasons in a year when the heavy equipment market saw surprise highs.
Recent reports indicate that while sales of new graders increased in 2024, sales of used motor graders fell by 10.2%.
On the surface, this appears to be confusing. Why would consumers choose more costly equipment in a year with uncertain economic conditions?
This isn’t a minor variation, rather, it’s a component of a larger market change that fleet owners, equipment buyers, and sellers must comprehend.
How did the fleet renewal cycles impact the sales?
The timing of fleet replacement cycles was one of the main causes of the decline in used grader sales.
Due to uncertainties, cost-cutting measures, and supply chain backlogs, several major construction companies and municipalities postponed planned equipment upgrades during the COVID years.
However, when a surge of unmet demand eventually materialized in 2024, these businesses immediately shifted from purchasing old to new.
In response to rising demand, OEMs like as Komatsu, Deere, and Caterpillar increased production.
Buyers who had been holding onto outdated fleets decided to upgrade all at once because of the quicker delivery timeframes and better financing alternatives.
As a result, the used grader market, which often benefits from budget purchasers and progressive replacement, found it difficult to keep up.
How did strict financing requirements affect the sales of used graders?
The used equipment market faced a more difficult lending environment, but new graders offered alluring financing offers sponsored by OEMs.
Due to the perceived increased risk, a number of banks and credit unions tightened their loan standards for old machinery, and interest rates stayed high throughout the majority of 2024.
This presented a significant obstacle for smaller contractors. Obtaining clearance for loans or lease-to-own agreements was more difficult than in prior years, even if a used grader was initially less expensive.
On the other hand, most used equipment sellers were unable to match the luxury of zero-down or low-interest financing options.
The equipment merchants supplying new machines frequently had access to through relationships with manufacturers.
Byers prioritize warranties and advanced techs
The increasing requirement for modern technology and dependable after-sales service was another element that subtly changed the situation.
Nowadays, the majority of older used motor graders are unable to provide features like GPS integration, emissions compliance, factory-installed grade control systems, and fuel efficiency enhancements.
On the other hand, companies are looking for robots that can accomplish more with less in a cutthroat market where deadlines are tight and skilled workers are hard to come by.
These factors are met by new graders, which also include telematics support, service packages, and manufacturer warranties that cut down on downtime and long-term expenses.
Many consumers felt that purchasing used, particularly older models without digital features, was riskier than the initial cost reduction.
The trends in auction alter the buyer behaviours
Customer behaviour changed in 2024, according to data from significant equipment auctions in the US and Canada.
The average bidding activity decreased, and more buyers left deals than in prior years, even while used grades continued to move.
Instead of motor graders, the most aggressive bids were found in the compact and earthmoving categories.
This implied that a lot of consumers were become pickier, either waiting for the ideal offer or choosing to stretch their budgets for new purchases.
Older graders were further pushed to the back of the line when auction houses themselves started emphasizing newer, lightly used machinery as a compromise.
Will this declining market make a comeback in 2025?
Although sales of secondhand motor graders had a difficult year in 2024, there is some hope for 2025.
A few things could aid in the market’s recovery. Many smaller contractors will once again employ secondhand machinery to keep costs down when OEM delivery times return to normal and the cost of new equipment continues to rise.
Whereas, the quality of used inventory will increase as more well-maintained graders reenter the market through trade-ins and secondary sales as the current wave of fleet renewals slows down.
If interest rates stabilize, financing conditions might also improve, making it simpler for smaller businesses to obtain loans.
Offering reconditioned equipment with a solid maintenance history, thorough inspection reports, and extra services like delivery or basic warranties will be crucial for sellers and dealers who want to concentrate on value.
Opportunities in the used motor grader market will still be available to those that modify their sales tactics and focus on the appropriate customers.
Let’s wind it up
A number of convergent trends that favored new equipment over used caused the 10.2% decline in used motor grader sales in 2024.
The market was very vocal about everything from inventory shortfalls and changing buyer demands to fleet improvements and improved financing.
For sellers of used equipment, however, it’s not the end of the road. It serves as a simple reminder that the industry is changing quickly.
Sellers will still have plenty of opportunity to expand in this shifting market as 2025 goes on if they know buyer concerns and modify their strategy.
Whether it is by enhancing the quality of their goods, providing flexible terms, or highlighting long-term value.
