Evaluating Used Equipment: Part 3

Sept. 8, 2020
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This is the final installment of our three-part series from Volvo Construction Equipment and the experts at Volvo CE sharing valuable information for evaluating used equipment. Part 3 is written by Hilton Wood, Product Manager, Repair Solutions for Volvo. Hilton began his career with Volvo CE in 2008 as an intern, and in 2012 became a full-time employee as a senior telematics specialist working on programs like CareTrack® and ActiveCare® Direct. In 2016, he assumed his current role as Product Manager – Repair Solutions and covers sales and marketing for Volvo Certified New Life, Volvo Reman, Care Inspections and component rebuilds.

Part 3 – Should I Rebuild My Machine or Replace It?

When a piece of construction equipment is approaching the end of its life, contractors sometimes struggle with the idea of replacing their older machine with a new one—whether they don’t have adequate capital, aren’t comfortable upgrading to new technology, or simply don’t want to replace the machine the operators loved to run.

While buying new construction equipment certainly has its advantages, there are alternatives if it’s not right for you when the time comes: leasing, renting, and buying used equipment are excellent alternatives—and rebuilds are as well. 

If you have a machine you’re thinking about rebuilding, you likely have questions about the process. What does it cost? How long does it take? What type of machine will I have on the other side? While there are no black and white answers, here are thoughts on some of the most common questions regarding machine rebuilds.

When is the best time for a machine rebuild?

You first need to ask yourself what the expectation of the asset is. Do you want to do an earlier hour rebuild to maximize its life expectancy, or would you rather wait until the repair costs begin to inflate and then compare replacement value to rebuild value and life expectancy? Most rebuild-ready machines are in the 12,000- to 15,000-hour range, but it can vary. Operating conditions, application, and maintenance practices are additional factors in determining the best time for refurbishment. For example, the front end and drivetrain take on more stress for a wheel loader in an extraction or load and carry application, meaning it likely needs to be rebuilt sooner, than a wheel loader used in a waste transfer station application.

Component failure would depend on the hours on the machine and condition of other major components. Some owners would choose to rebuild an engine, for example, if they want to see another season or two out of the machine or if it’s a utility machine. Others will assess their budgets at year-end, and if there’s cash available, they’ll put it toward a machine rebuild with the goal of maximizing their asset’s total life expectancy.

Is there a sweet spot to know when a machine is ready for a rebuild?

It depends on a lot of factors like how well you maintained your machine. Did you service it at the proper intervals? You for sure want to get it going before your parts consumption starts going way up, which can vary depending on your specific maintenance practices. Customer support representatives are great resources to help you make this determination.

How do I know if a rebuild is right for a specific machine I own?

You need to weigh all your options. For example:

•             What is your expectation after the rebuild? Will your asset return to a full-time production machine, or will it take a backup role and be a utility machine? The role your machine is expected to play in your fleet could determine how much you’re willing to invest as an owner into rebuilding that machine.

•             Are you satisfied with the way your machine is currently dressed? You should take into consideration whether or not it’s still relevant for the job and task it's performing. Is it too big? Is it too small? Would a new machine allow you to take on new jobs? If so, a rebuild likely won’t open up those types of opportunities.

•             Your operator likes the machine, but is he or she productive in it? If so, and you’d like to keep that productivity going, a rebuild is a good way to get reliable added life out of your current machine.

•             Are you willing to switch to new technologies and emissions systems? If you’re hesitant, a rebuild can buy you some time before you make the switch.

•             How long do you want to keep the asset before replacement? In most scenarios, higher replacement value assets are more economically viable for rebuild than lower replacement value assets. Larger machines are typically more economically viable because of the price of the parts versus the price of a new machine. The margin between the price of a new machine versus the price for the parts to rebuild gets closer in a smaller machine. At that point, it just makes more sense to buy a new machine in most cases.

•             Is your business prepared for machine downtime during the rebuild? You’ll need to compare the amount of time needed for a rebuild versus the time it would take to get a replacement. If you’ve effectively planned for it and are okay with the machine being out of your fleet for a period of time, a rebuild is still a viable option.

Will a machine rebuild be worth it?

To answer that, you should take into consideration all of the unique circumstances for the rebuild and decide whether or not it’s the best option for your business. If the expectation is to put the asset back in the same job after a rebuild, then a decision needs to be made on the practicality of the second life before costs start to increase.

Example: A large production wheel loader is rebuilt at 16,000 hours and the owner can invest 50% of the replacement value to get another 10,000 hours before another component rebuild. Did he or she maximize the life expectancy of the asset, knowing the replacement machine won’t get to 26,000 hours before major repairs need to be made?

What does a Volvo Certified New Life rebuild entail?

Currently, our certified dealers perform refurbishments on wheel loaders and haulers—there’s no formal program for excavators (to date). At the basic level, the powertrain gets rebuilt—but they’re customized with add-ons on a case-by-case basis. So, for example, a second level might include the powertrain, plus the replacement of some hoses and hydraulics. At the next level, you might be looking at all these, plus a full cab refurbishment, and so on.

The rebuild checklists for Volvo wheel loaders and haulers are quite extensive. We use remanufactured components when available, and we have a methodology of repair versus replacement when it makes sense. Based on an inspection of the machine, your dealer may find additional things that need to be replaced—and even upon machine tear down, you're still in the quoting process because additional issues may be found that need to be addressed. In any event, our rebuilds come with a 3-year/5,000-hour warranty on major remanufactured components, which is applied to rebuilt axles as well.

If you think a rebuild like this may be a viable option for an aging machine, talk to your local dealer. You can control your downtime to get back on track efficiently in a newly rebuilt machine.