Many business owners use equipment to carry out their business operation. Equipment have value and relying on book valuation for an accurate price is not the best way to know how much a piece of equipment is worth. A skilled appraiser can inspect your equipment and provide an appraisal report of authenticated and indisputable information that you can trust to guarantee you an unbiased valuation that you can depend on. Here are four reasons you need equipment appraisal.
Buying Used Equipment
Maybe you are a farmer who doesn’t have the capital to purchase new equipment, but see an offer for a used piece of equipment. You know better than to take the word of a seller at face value, regarding the condition of the equipment as well as how much its worth. Paying a higher price for used equipment than what it is actually worth is bad business. An equipment appraisal can help you to decide whether you are making a good investment or not by purchasing the used farm equipment. You would hate to throw money away by buying a piece of equipment that is worthless.
Seller Unsure About an Asking Price for Equipment
If you are selling a tractor that you no longer need, you may find that you are uncertain about the price that you should ask for the equipment. You may think that you know how much it’s worth based on how you have maintained the equipment and the number of years that you have owned it, but you don’t want to make your price unrealistic or unreasonable. If you want to make a quick sale and still get a good price for your equipment that you will be happy with, an objective equipment appraiser at Equify can help you to establish a price that can close a sale quickly and still represent the true value of your tractor.
Interested in Insuring Your Farm Equipment
Not all equipment appraisals are done for the interest of a sale; an appraisal can also establish a value for insurance reasons. It can prove difficult to find an insurer that is willing to offer you equipment replacement cost coverage at a reasonable premium when that equipment has depreciated. A piece of equipment that has a fair value of $50,000 won’t be covered by an insurance company for $250,000. An equipment appraisal will prevent you from purchasing more insurance coverage than is essential if you know the fair market value of the equipment.
Establish the Real Replacement Cost
While equipment can last for years, it is normal for certain parts to become damaged or worn-out. You may readily know the replacement cost of parts pertaining to your home appliances, but when it comes to heavy equipment, you may come up blank. You have no idea of the cost. An appraiser would establish the cost of the equipment part that needs replacement, as well as the cost of the labor.
Equipment appraisal is essential to establish an accurate valuation of your asset. It eliminates the need to guess about the cost of a piece of used equipment, or how much it would cost to replace a key component of a machine. With the help of an appraiser, you don’t have to buy more equipment insurance than you need.