How do you determine the value of used equipment?

Determining the value of used equipment means applying one or more of three standard valuation methods (market, cost, or income approach) based on the equipment's age, condition, and the purpose of the appraisal.

Our appraisers select the approach that fits the asset and the intended use, then support the conclusion with documented evidence:

• Market (sales comparison) approach: compares the equipment to recent sales of similar machinery, adjusted for age, hours, condition, and any upgrades or attachments. This works best when an active resale market exists for that equipment type.
• Cost approach: starts with the replacement cost of new equivalent equipment, then deducts physical depreciation and functional or economic obsolescence. This is most useful for specialized or custom machinery with few direct comparables.
• Income approach: values equipment based on the revenue or cash flow it generates, such as leased or rental assets.

Beyond the method, an accurate valuation depends on gathering the right details: make, model, serial number, hours or mileage, maintenance history, and physical condition. Fair market value, the standard most purposes call for, reflects the price a willing buyer would pay a willing seller in an open market, with neither party under pressure to act and both having reasonable knowledge of the asset.

Because the right method and supporting data vary by asset type and use case (estate settlement, SBA lending, insurance, litigation), a professional equipment appraisal applies the appropriate approach and documents it in a report prepared in accordance with USPAP. This gives lenders, courts, and insurers a defensible number rather than a rough estimate. For more on how these reports are structured, see our FAQ page.