Fleet management is not one-size-fits-all. Especially when it comes to acquiring equipment, everyone’s situation is different. This is also true when looking at tax incentives like Section 179 deduction and bonus depreciation.
Last year’s tax law rolled out Section 179 and bonus depreciation updates before year-end, giving companies a longer window of time to plan than in years’ past. It gave companies more time to assess equipment needs, evaluate options, and determine how the incentives would apply to their benefit. The same is true this year, as both incentives remain unchanged from last year, something expected to remain for the next few years to come.
Related article: Two Key Changes to Section 179
What qualifies for a Section 179 and bonus depreciation deduction? This brings me to, perhaps the most significant change that came from 2018’s tax law affected used equipment. In the past, the Section 179 deduction could be applied to used equipment, but bonus depreciation could not – that changed last year, opening an exciting opportunity for those looking to buy used equipment. It’s no longer a matter of Section 179 vs. bonus depreciation, both are now available.
Whether companies are looking to update or refresh fleets, there’s now an added incentive to consider used equipment. Pre-owned machines or rental fleet machines may offer the right solution. RDO Equipment Co. offers a large inventory of used equipment for sale, various makes, models, and hours, along with pieces for several industries, from construction and agriculture to roadbuilding and recycling.
Related article: Section 179 FAQs
There’s another thought that’s likely affecting sentiment and purchasing decisions heading towards year-end: the economy.
Most people have heard rumblings about an impending recession. However, my conversations with RDO customers and other contractors, companies, and experts in the industry all over the country, have painted a different picture. Business is good. Backlogs are strong. Even with political speak and uncertainty, the work is still there and outlooks are positive.
Now, that doesn’t mean there won’t be challenges – there will be, there already are. There’s no doubt labor is and will continue to be the biggest hurdle construction companies face as we head into year-end and 2020. The upside to that is the technology innovations we’re seeing in this industry.
New technologies are offering companies opportunities to work smarter and faster; to put a new employee in a machine and give him or her the ability deliver quality at a similar level as that of a 20-year veteran operator. Going back to the opportunities of buying used equipment, many pre-owned machines can be upgraded with the latest technology, making the used route even more appealing.
It energizes me to see RDO’s manufacturer partners at the forefront of this technology shift, helping companies overcome the labor challenge – and I’m equally as excited for our team’s ability to deliver the solutions and make them work on the jobsite.
Related article: The Next Big Thing in Grade Control Technology
Year-end seems to come faster and faster every time, so I, along with the rest of the RDO team, encourage you to be proactive with your fleet management decisions. It’s a smart move to start assessing equipment needs now, evaluate if a purchase makes sense, then speak to a trusted tax advisor to confirm expected benefits.
Whether looking to upgrade or refresh machines, we’re here to help you find the solution.
About the Author
Since 2007, Chris Cooper has guided RDO Equipment Co. in various Leadership roles, currently serving as Chief Operating Officer. He leads the company’s Executive Vice Presidents and several Vice Presidents, covering everything from the agriculture and roadbuilding industries to human resources and marketing, in an effort to foster environments of hard work and fun at RDO stores and offices. He’s a believer that relationships matter, and enjoys opportunities to talk with customers, discuss their concerns, challenges, and needs, then work with the RDO team to deliver solutions.