OEM incentives drive buyers from used construction equipment to new machines

Used construction equipment is vanishing from dealer lots as aggressive new-equipment deals gain traction

Used construction machines are becoming harder to find on dealer lots as aggressive incentives tied to new equipment reshape buying choices. A recent industry survey of dealers representing 150 locations shows that demand for used equipment held steady or improved in the second quarter, and most dealers hit their inventory targets, but heavy pressure from manufacturer promotions is eating into used sales.

Survey snapshot and market direction

Research firm data covering the second quarter shows that 80% of construction dealers met used-inventory targets and 90% reported used-equipment demand was steady or improving. Stable prices for late-model machines and a market that has held up despite tariff uncertainty helped fuel those Q2 results. Large commercial projects and solid homebuilding in some areas also supported dealer activity.

Why used machines are losing ground

Original equipment manufacturers are offering a mix of financing and package deals that make new machines much more attractive to buyers. The three most common tools producers are offering are interest-rate buydowns, extended warranties, and technology package upgrades. Among those, interest-rate reductions are the most widely used tactic. A 0% finance offer on a new machine can make monthly payments similar to a used machine financed at 4%–6%, narrowing the price advantage buyers usually see in the used market.

Dealership sales teams are reacting to those incentives. When the price-for-price math looks close and promotional financing is available, sales staff tend to steer customers to new machines. That effect is strongest on late-model used machines — units that are only a year or two old — which are now competing directly with heavily promoted new inventory. As a result, some dealers are choosing to purge certain late-model used models rather than hold them.

Dealer strategies and short-term expectations

Dealers are adapting in several ways. Some expect used inventory to rise in the third quarter, with about 40% forecasting an increase and another 40% expecting levels to stay the same. A portion of the planned inventory build-up reflects tax planning: dealers are preparing to take advantage of 100% bonus depreciation and other year-end tax breaks by purchasing used units now and selling later.

Another common move is shifting late-model machines into rental fleets. Dealers may rent a machine for six to 12 months, add hours and revenue, and then sell it with higher usage so it no longer looks like a low-hour asset. That tactic helps dealers generate cash flow while delaying sale until market conditions improve or until they can price the unit away from direct competition with new promotions.

What kept Q2 steady

Stable used-equipment prices and a measure of resilience against tariff worries helped Q2 performance. Ongoing big construction projects and pockets of strong homebuilding also supported dealer sales. Still, the rise of promotional financing and bundled programs for new equipment is creating what many industry participants describe as a near-perfect setup for new-gear sales, putting continued pressure on the used market.

Local construction and community projects: Morrisville example

On a local level, construction projects remain important community stories. A recently completed playground in Morrisville reopened after years of planning and delays. The project began as a safety and insurance concern because the old equipment had worn and lacked modern safety features. Borough leaders worked with engineers to design new play areas and then pursued grants and donations rather than fund the project through taxes.

The borough secured a $300,000 community development grant and a $50,000 private donation to cover construction costs. Additional support included donated playground mulch. Construction started in March but faced weather delays and the need to replace an unexpected underground storm pipe. After the site work finished, a young child helped with a ribbon-cutting and then ran straight to try the new equipment. The playground includes separate areas for 2–5 year-olds and 5–12 year-olds, with monkey bars, slides, jungle gym formations, and swings for infants through older children.

Recycling and community services tied to local public works

The town also runs regular Green Day events where residents can recycle items not accepted in curbside pickup and safely dispose of hazardous or sensitive materials. Events take place in spring and fall and feature drive-thru stations for electronics, textiles, batteries, and paper shredding. The program accepts a wide range of household electronics, with partners supporting the cost of electronics recycling. The event also runs a collection drive for nonperishable food and accepts used cooking oil and compostable pumpkins, among other services.

Bottom line

The used-equipment market remains active, but it is under clear pressure from aggressive new-equipment incentives that narrow the gap between new and used monthly costs. Dealers are responding by shifting inventory, adding more rental use, and planning around tax incentives. Local construction projects and public works programs continue to show how community planning, grants, and private support can move projects forward even amid broader market change.