Protect yourself against fraud when buying used heavy equipment for farm, construction, and industry

Protect Yourself When Buying Used Equipment

 
Although extensive legal protection exists for automotive consumers against fraud and illegal practices, it is not the case for purchasers of industrial, construction, and farm equipment such as tractors, loaders, dozers, scrapers, and cranes. Buyers of such equipment must be extra cautious.
 
Fraudulent practices include hour-meter tampering, nondisclosure of major repairs, and selling of stolen equipment.
 
There are basic precautions that buyers can take to protect themselves from fraud.
 
Check the Seller
If the seller is a dealer, check with local and state trade associations, Better Business Bureau, and state Attorney General's office to determine the dealer's reputation and business history. If buying from an online auction site such as eBay, take advantage of the fraud prevention facilities   available from the service. Contact the seller. Get references if possible.
 
Get a Bill of Sale
Good business practice requires that you get a written bill of sale from the seller when you purchase used construction or farm equipment. The bill of sale should include the following:
 

  1. Equipment description, make, model, and product information number (PIN), with list of attachments and non-standard equipment

  2. Price and payment terms and schedules.

  3. A statement of any existing warranty, granted warranty, or a disclaimer of warranty, which is usually expressed as an "as-is" sale with no warranty.

  4. A statement of the seller's knowledge regarding the condition of the equipment and a detailed disclosure of major repairs.

  5. Schedule for the equipment's delivery, method of delivery, and a statement of who pays costs of delivery.

  6. The tractor's current hourmeter reading and a statement by seller regarding the accuracy of that reading. One of these three statements should be included:

     a. "Seller certifies that, to the best of seller's knowledge, the hourmeter reading on this tractor is accurate."
     b. "Seller certifies that, to the best of seller's knowledge, the hourmeter reading is not known to be correct and that the actual hours may differ from the hourmeter reading for reasons other than hourmeter-calibration error."
     c. "Seller suspects the hourmeter reading is in excess of the mechanical limits of the meter."

  7. Names, addresses, dates, and signatures of buyer and seller.

 
Ask Questions
Where has the equipment been used? For what purposes? Who are previous owners? How can I contact them? Has it been properly maintained? How many hours are on it? Is it damaged? What is it's running condition? What parts have been replaced/repaired?
 
Inspect the Equipment
If possible, inspect the product or have it inspected by a qualified inspector or mechanic. If it can't be inspected, get a written agreement from the seller to allow an inspection after you receive it, and base final payment on the results of the inspection. A reputable seller will agree to such terms.
 
Buy Equipment with Electronic Hour Meter
Newer equipment will have an electronic hour meter, which is computer controlled and much more difficult to tamper with.
 
Check with Manufacturer or Dealer
Some equipment manufacturers maintain databases of equipment sales and repairs, along with PINs and hour meter readings. It's a good way to check age, hourmeter accuracy, repair history, and identification numbers for major components.
 
Check for Stolen Equipment
If you suspect that equipment has been stolen, you may be able to have your local law enforcement agency check the NCIC national database for the equipment PIN. It's not foolproof because the equipment may not have been reported stolen or stolen years ago before the database existed.