Values & Market Data
Introduction to Values & Market Data
Whether at acquisition or disposition, precise, data-driven equipment values are key to maximizing use of your capex budget. Use EquipmentWatch Values to keep current on market prices, with disposition-channel specific valuations (auction, FLV and retail, FMV). Additionally, ensure precise salvage values for use in your internal charge rate creation process.
This guide will demonstrate how to use the EquipmentWatch Values & Market Activity product to estimate meaningful valuations for equipment.
How to use Value Adjustments
There are a significant number of factors that can affect the value for a piece of used equipment. Most importantly, the manufacturer or brand, configuration (including attachments), usage, age, and mechanical condition are all key components of adjusting value. These adjustments are controlled at the size-class level.
Creating an Adjustment for Location
To add an adjustment for your region, simply click on the location box shown below. You can either scroll to find a particular region, or start typing in the search bar to filter regions. These location adjustments are created at the state/province level. Once a Location has been selected, the adjusted FMV, OLV and FLV will update immediately.
Creating an Adjustment for Condition
To adjust the value of the equipment based on condition, click on the Condition box and select one of our five conditional adjustments. Once a Condition has been selected, the adjusted FMV, OLV and FLV will update immediately, as demonstrated in the picture below.
Here’s a quick table demonstrating how EquipmentWatch describes the 5 available conditions.
|Excellent||Practically new unit, in perfect mechanical condition. No interior or exterior flaws, including paint. Engine is well maintained and produces no smoke from exhaust. Hours are generally low.|
|Very Good||Mechanical condition is excellent, with no major repairs necessary. No major overhauls have been performed. The interior and exterior, including paint, show some normal signs of wear that correspond to the age of the machine. Engine is well maintained and produces no smoke from exhaust. Hours correspond to the age and wear.|
|Good||Mechanical condition is very good, with some repairs made or an overhaul having been recently completed. The interior and exterior show normal wear that corresponds to the age of the machine. Some rust and dents are expected. Engine has had regular maintenance, with minimal exhaust smoke. Hours correspond to the age and wear and are not excessive.|
|Fair||Mechanical condition is good, and the machine runs and operates normally. The interior and exterior show obvious signs of wear, including some rust and dents. Some worn parts or components may require repairs or replacement in the future. Engine has had maintenance, with exhaust smoke likely but not excessive. Hours generally correspond with the age and wear of the machine, but not necessarily.|
|Poor||Mechanical condition is fair, with some components not operational. The interior and exterior need repair or new parts installed, and bodywork is necessary. Major components or systems need to be rebuilt or overhauled before operation. Engine may be running, with exhaust smoke. Hours are generally high and reflect the wear and age of the machine.|
Creating an Adjustment for Options & Extras
The values of options and extras (FMV, OLV or FLV) must be added to the value of the standard equipment in order to complete an accurate valuation process. The value of an option may be shown as a deduction, which is a reduction from the basic listed values. Note that for any piece of optional equipment which, in a different size or make, is also a standard element of the machine, the price listed in Values may be in lieu of standard and not the cost of the option purchased independently of the machine. For example, in the picture below, the addition of a Multi-Purpose Loader Bucket and EROPS has increased the FMV of the machine by approximately $1500, but this does not necessarily imply that the Bucket and EROPS are independently valued at $1500 on the market.
Creating an Adjustment for Usage
Usage adjustments are crucial to determining the true market value of any piece of equipment. These adjustments are controlled at the size-class level, and allow for unique adjustments at 100-hour intervals for off-highway equipment.
Usage adjustments rely on the Meter Reads field, which can be found at the top of each product page. For off-highway equipment, Meter Reads are measured according to engine hours; for some other types of equipment, Meter Reads may be measured in miles or another specific metric.
In the example below, the input of 500 hours adjusts the Usage Analysis bar to reflect how this particular machine rates against all other machines in the same size class. In this instance, for a 2011 Tractor-Loader-Backhoe, 500 accumulated hours is low usage. This actually increases the FMV, OLV and FLV for this piece of equipment, which update automatically as different usage adjustments are entered.
Determining Your Equipment FMV, OLV and FLV
The Resale and Auction Values graph displays 6 months of estimated FMV, OLV and FLV for any piece of equipment, based on any adjustments made to Location, Condition, Options and Extras, or Usage. Fair Market Value (FMV) is shown in the blue line, Orderly Liquidation Value (OLV) is shown in the orange line, and Forced Liquidation Value (FLV) is shown in the green line. All values are in US dollars.
These values can be adjusted using the Adjustment inputs noted above, but both FMV and FLV may be adjusted manually using the Compare percentages. To change these, simply change the percentage shown next to each value type. For example, in the image below, FMV is sitting at 90%, which means that the Adjusted FMV will be approximately 10% below the standard unadjusted value, holding everything else equal.
EquipmentWatch’s OLV is communicated as a percentage of either FMV or FLV. By default, the EquipmentWatch standard OLV will be calculated as a percentage of FLV. To adjust this relationship, simply change the percentage next to OLV. To set the relationship as a percentage of FMV, click on the drop down menu to the right of the OLV percentage and select FMV.
The Values graph will only show values with a checked box in the comparison field. To see only FLV, for example, simply click on the check boxes next to OLV and FMV and they will be removed from the graph.
The Values graph shows estimated values for the last 6 calendar months. These values will change with any adjustments made to the current value.
Finding the Supporting Market Data
For each model, EquipmentWatch displays some of the more recent market activity for this particular model in the Recent Individual Transactions Section. This table shows the date of observation, the model year, the usage (Meter Reads), the Location (City and State), the Sale Type (Resale vs. Auction), and the asking price. Clicking on View all Market Data will redirect the user to the Market Data page, where all available marketplace data are available to search.
Default FMV, OLV and FLV
At the bottom of the Values page, the unadjusted values for each model year are displayed in the Default Resale and Auction table. For each available model year, the FMV, OLV and FLV are listed alongside any available Original Price data.
Clicking on View All will show all unadjusted FMV, OLV and FLV for every year the model was produced, along with the Original Price, when available.
The Use Current Value drop-down menu allows the user to examine historical published values for as long as this particular model has been valued by EquipmentWatch. The date shown in the dropdown is the revision date. For example, to determine what the estimated unadjusted value for the 710J was in November 2011, simply select the next closest date to November 2011 and the values in the table will adjust automatically.
Frequently Asked Questions
What’s the difference between adjusted and unadjusted values?
Unadjusted values, whether FMV, OLV or FLV, represent a nationwide average value for equipment in average working condition. Adjusted values, however, are unadjusted values that have been modified based on location, usage, options & extras, and condition.
How does EquipmentWatch calculate values for equipment with no market activity?
The ValueTrend Engine, which updates all EquipmentWatch Values every month, takes into consideration the last 6 months of market activity for the Resale channel and the last 36 months of market activity for the Auction channel. The ValueTrend Engine also uses a system of cascading logic from the model level to the size-class level to ensure accurate valuation for rare equipment on the market.
What options and extras are included in the unadjusted values?
None. Unadjusted values are created using standard configurations, which can be found in the Specs section of the website.
How often does EquipmentWatch update adjustment factors?
EquipmentWatch adjustment factors are updated on a quarterly basis. This differs from the Values, which are updated monthly.
Can I add more than one adjustment at a time?
Yes, absolutely! The Values page is designed to give you the greatest possible control over the estimated value of your equipment.