Used vs New Construction Equipment: The Real Cost of Ownership

Published March 29, 2026 · CGPS Equipment Insights

Every contractor faces this question at some point: do I buy new or used? Dealers want you to buy new — that's where their margins are. But the math almost never works out in favour of buying new unless you're running a machine 2,000+ hours per year on big commercial contracts. Let's look at the real numbers.

The Depreciation Cliff

This is the single biggest reason to buy used. New construction equipment loses value faster than almost any other business asset.

• Year 1: 20-30% depreciation. A $100,000 machine is worth $70,000-$80,000 after 12 months and 500-800 hours.
• Year 3: 40-50% total depreciation. That same machine is now $50,000-$60,000.
• Year 5: 50-60% total depreciation. Now it's $40,000-$50,000.

When you buy a quality used machine with 2,000-3,000 hours, the previous owner already ate the depreciation. You buy at the bottom of the curve and the machine holds its value much better from that point forward.

The Real Numbers: A 5-Year Comparison

Let's compare buying a new CAT 305.5 from a dealer vs. a refurbished unit from CGPS. Same machine, same work, same operator.

The difference: $46,000 to $62,000 in savings over 5 years. That's not a rounding error — that's a down payment on a second machine, a new truck, or a year of payroll for a helper.

"But What About Reliability?"

This is the objection we hear most often, and it's fair. Nobody wants a machine that breaks down on the job. But here's what most people don't realize:

• CAT engines are built for 10,000-15,000+ hours. A machine with 2,500 hours is barely broken in. The engine, hydraulic pump, and major components have decades of life left.
• Wear items are cheap. Bushings, pins, tracks, seats, glass — these are the things that wear out, and they're all replaceable for $1,000-$5,000. We replace them before you get the machine.
• New machines break too. Ask any fleet manager — new equipment has warranty claims. Sensors fail, software glitches, DPF systems clog. New doesn't mean problem-free. It means the problems are covered under warranty — which you're paying for in the purchase price.
• Simpler is more reliable. A pre-emissions CAT has fewer sensors, fewer computers, fewer emissions components, and fewer things to break. Our refurbished non-DPF machines are mechanically simpler than their modern replacements.

When New Actually Makes Sense

We're not going to pretend used is always the answer. Buy new if:

• You run 2,000+ hours per year — At that utilization rate, warranty coverage and scheduled dealer maintenance start to pencil out.
• Municipal contracts require Tier 4 — Some government contracts specify emissions-compliant equipment. If that's your bread and butter, you need Tier 4.
• You need specific new features — Grade control, telematics, the latest cab technology. If these features directly make you money, the premium may be worth it.
• You have a fleet maintenance team — Large companies with in-house mechanics can handle DPF maintenance in-house at lower cost.

For everyone else — landscapers, small contractors, farmers, one-machine operations, rental companies — used refurbished equipment is the smarter financial move. Full stop.

The Hidden Costs Nobody Talks About

Beyond the sticker price, here are costs that hit new equipment buyers harder:

• Insurance — Higher replacement value = higher premiums. Insuring a $100K machine costs 30-50% more than insuring a $65K machine.
• Opportunity cost — The extra $35,000-$40,000 you spend on new equipment is cash that's NOT working in your business. That money could be generating revenue elsewhere.
• Sales tax — 13% HST on $105,000 = $13,650. On $65,000 = $8,450. You save $5,200 in tax alone.
• Financing interest — If you finance, you pay interest on the full purchase price. $105K financed at 7% over 5 years costs ~$19,000 in interest. $65K financed costs ~$11,000. That's $8,000 in pure interest savings.
• Stress — Making $2,000/month payments on a new machine while work is slow in winter is a very different feeling than owning a machine outright.

What "Refurbished" Actually Means at CGPS

Not all used equipment is equal. An auction machine is a gamble — you might get lucky, or you might buy someone else's headache. At CGPS, refurbished means:

• Full mechanical inspection — Engine, hydraulics, undercarriage, electrical. We check everything.
• New bushings — Tight pins and bushings mean precise, responsive operation.
• Professional repaint — Not just cosmetic — proper surface prep, primer, and topcoat protects against rust and corrosion.
• Component replacement as needed — Seats, glass, sprockets, hoses, tracks — whatever the machine needs to feel right gets replaced.
• Ready to work — When you get the machine, it's ready for the jobsite. No surprises, no "it just needs a couple things."

We source directly from our overseas facility, do the refurbishment there (where labour costs are lower), and pass the savings to you. You get dealer-quality refurbishment at 30-50% below domestic dealer prices.

The Bottom Line

Buying new makes you feel good on day one. Buying smart makes you money for years. A quality refurbished machine does the same work, earns the same revenue, and costs you $40,000-$60,000 less over its lifetime.

We've got machines in stock right now, plus 75+ models available to order. If you're tired of overpaying for equipment, give us a call.

Frequently Asked Questions

How much does a new mini excavator cost in Canada?
A new CAT mini excavator in the 5-6 ton class typically costs $90,000 to $120,000 CAD from an authorized dealer, before tax. Add attachments and you're looking at $110,000 to $150,000+ out the door.

How fast does construction equipment depreciate?
New construction equipment typically loses 20-30% of its value in the first year and 40-50% over the first three years. A $100,000 new excavator may be worth $55,000-$65,000 after just 3 years and 2,000-3,000 hours.

Is it better to buy or lease construction equipment?
If you'll use the machine regularly for 3+ years, buying used is almost always cheaper than leasing. Lease payments on new equipment run $1,500-$2,500/month for a mini excavator. A used machine purchased outright has zero monthly payments and can be resold when you're done.