May 1925 – Which, Painting or Rebuilding?

Purchasing rebuilt, used equipment or machine tools from a reputable dealer is not like buying a second-hand automobile or flivver. In the latter case the shiny coat of paint is often the determining factor, the purchase and price being largely a matter of the buyer’s personal reaction toward the color. “Getting under the skin” to see the heart or mechanical features of the old hack does not interest the purchaser.

In buying equipment or machine tools some purchasers exact rigid performance tests from them, comparable with new machines of the same size and type. The coat of paint applied by the reputable rebuilder is the last thing done to the completely reconstructed machine. With other less scrupulous dealers painting is often the only work done on the machines. Some buyers have yet to differentiate between the two classes of dealers.

What’s it Worth?

When you drive your old automobile of more or less ancient vintage downtown and offer it as part payment on a nice new next year’s model, the dealer thumbs through the pages of his Blue Book and tells you the allowance he will give you. This amount is the average of the leading markets. The price of the old faithful vehicle is thus hammered down on the auction block of time. Condition has little to do with its value.

Suppose the same arbitrarily established rate of depreciation was applied to a machine tool. Every machine tool on the floors of long-established machine shops would have values if computed by any depreciation formulas which would be infinitesimally small. The machines, however, have not depreciated at this alarming rate but are often more valuable than new machines. A lathe which has had almost twenty years of service averaging eight hours per working day may be more valuable than a lathe three years old of equally good make and correspondingly more modern in its appointments. The former machine is the more accurate and reliable, yet seeing them both covered with equal amounts of dust, the buyer would be inclined to select the younger of the two.

In the used equipment market the value of the machine tool is enhanced by complete rebuilding and renovation. The slightly worn parts and bearings are replaced, the dust is wiped off and a fresh coat of paint brightens it up. The worth of the machine has increased as a result of this reconstruction. Its value now approaches that of a new machine because of its accuracy, appearance and availability.

Blue Book methods of price determination would fall far short of fixing the true value of rebuilt used machine tools or construction equipment.