Understanding how much trade-ins are worth isn’t as simple as logging your equipment details into a used equipment value calculator. Normally, these online services base their assessments on historical pricing data for the make and model of your used equipment. However, they can’t always factor in specific details about your particular machine.

Dealers conduct thorough inspections to become intimately familiar with your machine. During the inspection phase, the dealer will need to know pertinent information like:

→ Machine model

→ Serial Number

→ Number of operating hours

→ Equipment features

→ Additional equipment that comes with the machine

→ Which market the machine is located in

In addition to collecting basic information about your equipment, inspectors will also look at the physical condition and the operational condition of your machine. They’ll do this in person, through photos or a combination of both, depending on the situation.

To determine the fair market value of equipment, dealers need a reference point. Comparing your machine to others like it on the market allows dealers to factor in what the broader market is willing to pay for the equipment. Since the dealer needs to make a profit on the machine once it sells to a new owner, it’s critical that they offer a realistic trade-in value to the current owner.
 
Dealers won’t just look at the consumer market, where owners are buying and selling among themselves. They’ll also look at auctions, where other dealers sell machines after trade-ins, sometimes in bundles to move equipment faster.

Finally, the dealer will plug all of the data and research they’ve collected on the machine and the market landscape into a spreadsheet. In this spreadsheet, the dealer will look at values like:

→ Fair market value based on the first two steps

→ Average auction value

→ Repair costs, including parts and labor

→ Freight, delivery and transportation expenses

→ Profit margins, commissions and incidentals

→ Which market the machine is located in

Once the necessary data has been filled in, the worksheet will calculate and produce a final value that gets assigned to the trade-in. The assigned value is the actual cash value the dealer will offer you for your machine.
 
As the owner, you’ll decide whether you agree that it’s the best value. Owners may decide to have their machine’s trade-in value assessed elsewhere until they feel confident they’ve received the best value possible for their used equipment.