New vs Used Equipment Finance Rates

Key highlights

• New assets usually finance more sharply than used equipment
• Older or higher-hour used gear is priced higher
• Used deals may face shorter terms or larger deposits
• Specialist lenders can price used equipment more keenly

Why new equipment finances more sharply

The asset is the lender's security, and a new machine is the easiest kind to lend against. It holds its value well in the early years, has a full working life ahead of it, and is straightforward to resell if the lender ever needs to recover its money. That lower risk translates into sharper pricing, with strong new-asset deals indicatively starting from around 6.55% p.a. New equipment also tends to qualify for longer terms, because the machine will still have useful life left when the loan finishes, which can help with cash flow.

How used equipment is priced

Used equipment can absolutely be financed, and often competitively, but the pricing reflects added risk. An older machine has depreciated, has less working life remaining and can be harder to value and resell, so lenders build that into the rate. The older or higher-hour the asset, the higher the pricing tends to be. Some lenders also cap the term based on the asset's age, so the machine is not near end-of-life when repayments end, and may ask for a larger deposit to reduce their exposure on a used purchase. Even so, a well-chosen used machine from a reputable dealer can still be financed at a rate that makes good commercial sense.

Age and hours matter

For used gear, the specifics of the asset drive the rate. A near-new machine with low hours and full service history is treated almost like new and prices accordingly, while a much older, high-hour or poorly documented asset is riskier and dearer. Well-maintained, sought-after brands hold value and finance better than obscure or fast-depreciating equipment. Providing service records, hours and a clear valuation strengthens a used-asset application and can help secure a keener rate, because it reassures the lender about the asset's condition and worth. The better you can document a used machine, the closer its pricing tends to move toward what a comparable new asset would attract.

Where specialist lenders help

The major lenders are sometimes cautious on older or unusual used equipment, but the market is much wider than the big names. Specialist non-bank lenders often have real appetite for used assets that the majors shy away from, and they price accordingly. This is where comparing the whole market pays off: a used-equipment deal that looks expensive or gets declined at one lender can be exactly what a specialist is chasing. Matching the asset to a lender comfortable with used gear frequently makes the biggest difference to the rate. It is the clearest reason not to judge your used-equipment options on a single quote from one lender.

Comparing new and used across the market

Whether you are buying new or used, the sharpest rate comes from placing your deal with the right lender, and that varies by asset. Overdrive takes one application and compares 80+ banks and non-bank lenders, including those that specialise in used equipment, matching your asset age, hours, credit profile and structure to the keenest fit. That way you see genuine indicative pricing for your actual machine rather than assuming used automatically means a poor rate, which is often not the case with the right lender. Comparing the market lets you weigh the finance cost of a new purchase against a used one on real numbers.

If you are weighing up a new or used purchase and want to know what each would cost to finance, a quick comparison gives you real numbers to work with. Send Overdrive the asset details, including age and hours for used gear, along with your business information, for an indicative, no-obligation comparison across 80+ lenders. It costs nothing to check, and seeing the pricing for your specific machine is the surest way to make the right buying decision.