On Nov. 12, 2008, a new auction occurred. Cold, wet and windy, the day was not helped by the fall financial meltdown or the dreary mood at the site of the lead consignor: Midwest contractor McAninch Corp.’s maintenance yard in Des Moines. Prices matched the mood and were down by double digits compared to prior months.
Despite the economy, the unreserved sale still generated $8.8 million on 275 pieces of equipment, with an average unit price of $32,000. Foreign bidders supplied 14% of the gross revenue. “If you have work, it’s a good time to buy used equipment,” says Rick Albin, president and CEO of Cat Auction Services. A former Ritchie Bros. employee, Albin says dealers are well equipped to support contractors’ used equipment. So, he thought, why not help them buy and sell it at auction?
The idea was an easy sell. “Caterpillar and Caterpillar dealers have viewed auctions as detracting from the value of their brand and their equipment,” says Albin. “There’s a fair amount of business that’s going to go to auction whether they choose to participate or not.” Cat dealers own the venture, and the Peoria, Ill.-based manufacturer supports the brand. A second sale was held March 26 in Elko, Minn.
Though the venture got off to a rough start, it offers less risk—something that may attract bidders to Cat. Dealers inspect the machines to certified, pre-owned standards and assign a rating according to wear life, age and hourly usage. “Our standard is more of a ‘buyer informed’ standard than a ‘buyer beware’ standard,” says Albin. Financing and maintenance plans can be arranged during the sale, which is listed on the Internet. In some cases, machines are available with an extended warranty, something seldom seen at other sales.