Accuracy of estimated equipment costs generally hinges on two elusive variables: cost of repair parts and labor, and residual value of replaced machines. Construction Equipment hand-selected a group of contractors who've invested in control of equipment costs, and surveyed this reader advisory panel to find out more about their experience with these and other variables that impact equipment costs.
The first study, co-sponsored by Case Construction Equipment, focused on the reader advisory panel's experience with wheel loaders. The 100 responses were fairly evenly dispersed throughout the country, and about two-thirds were highway and heavy construction or general contractors engaged in both highway/heavy and building work. All firms on the advisory panel have fleet values greater than $5 million, and overall the median fleet value is about $40 million.
Expenditures on repair parts and labor, as a percentage of the machine's original purchase price, are remarkably similar for wheel loaders sized all the way up to 575 horsepower. But nearly 24 percent of wheel loaders from 250 to 575 horsepower demand more than the machine's original purchase price in repairs.
Almost no members of the reader advisory panel spend 125 percent of original machine price or more for parts and labor on any loader sizes.
The vast majority of wheel loaders' residual values fall in the range of 5 to 49 percent of original purchase price, with a median value around 27 percent. But 15 percent of loaders from 250 to 575 horsepower draw more than half of their new purchase price at resale.
The median residual value is around 27 percent of original purchase price for all sizes of wheel loaders included in the survey. About two-thirds of all answers are arrayed within a range from 5 to 49 percent of original price.
Three out of four compact wheel loaders ride on radials, and about 85 percent of mid-size and larger loaders apply radial tires. Percentages of firms that use radials on less than 10 percent of all sizes of loaders suggest that there remains a minority of firms that prefer bias-ply tires.
Reader Advisory Board research is co-sponsored by Case Construction Equipment.