Auction or dealer: an honest comparison

Auctions look cheaper and often are. They are also where most of the expensive mistakes in this industry get made. What actually separates the two.

The hammer price is not the price. Add the buyer’s premium — commonly three to eight per cent — GST if it applies, documentation and transfer fees, and transport from the yard. On a $120,000 machine that can be $15,000 before it turns a wheel on your site.

Then there is condition. Auction stock is sold as-is, with no warranty, no cooling-off, and usually no opportunity to test under load. You are buying the machine you can see, not the machine described in the catalogue.

Where auctions genuinely win

If you know the model well, can inspect properly, and have funds ready, auctions are the cheapest way to buy. Ex-fleet and ex-government lots in particular are often better maintained than their hours suggest, because they were serviced on a schedule rather than when something broke.

Where dealers win

Recourse. A dealer has prepared the machine, often offers a warranty, and has a reputation that survives the transaction. You can inspect on your own timetable, negotiate, and trade something in. For a first machine, or a machine you cannot afford to have off the road, that is worth paying for.

The thing that catches people out

Settlement. Auction payment is typically due inside 24 to 48 hours, and storage fees start quickly after that. Sorting finance beforehand is not administrative tidiness, it is the difference between winning a lot and forfeiting a deposit.

Two practical steps before you bid on anything: run a PPSR search, because a machine can carry a previous owner’s security interest and you inherit the problem; and have a finance limit approved so you know your number.