Lenders have the right to repossess any property, including heavy equipment, when the person buying it fails to fulfill the terms of the loan. When a bank repossesses something, it wants to recoup at least part of the amount still owed, which means it might sell the item at a reduced price. You often can find heavy equipment in like-new condition at a price well below retail value.
Find companies with bank-repo heavy equipment for sale. Many online companies act as a middleman between the lender and the consumer. Companies might offer online auctions, host live auctions or sell equipment for a set rate. With an online auction, you might have to wait for bank approval before completing the transaction.
Make a list of the heavy equipment you will need in the months ahead. There is no guarantee what type of repossessed equipment a company will have. If you spot an item from your list scheduled for auction or sale, check it out. It could be months before you see another one for sale.
Get product specifications for heavy equipment you can't inspect in person. Many companies use an all-sales-are-final policy when dealing with repo equipment. You also should expect companies to sell heavy equipment in "as is" condition. Although you can to find a good deal at a heavy-equipment auction, you also could end up with a lemon.
Inspect equipment in person if you know what to look for, or hire a mechanic to inspect it. Live auctions usually have a period in which you can inspect the equipment before bidding begins. This is your chance to discover any problems. In some cases, the cost of the heavy equipment might be worth the additional cost of repairs.
Understand how the company completes sales. Dealers of repossessed heavy equipment might have potential buyers sign a bidding contact that lays out the terms of agreement in the event of a purchase. In some cases, you might have to pay an entrance fee for the auction, which the company might refund if you don't buy anything. Some companies expect payment in full at the time of purchase, but others offer an extended period, such as 48 hours.
Secure the funding for the equipment before you start bidding. Work with a lender if needed. If you can't secure funding, you will need cash or a cashier's check for the proper amount. Some companies accept credit cards, so check with them before the sale or auction.