Idle Speculation

Last week, in our post titled Location, Location, Location, we discussed the ways in which state laws and the geographic location of a piece of equipment can affect its value. Today, you’ll have to forgive our speculation as we imagine what would happen if California’s emissions laws spread east. 

First of all, keep in mind that our imaginations are not running wild. Given the current administration’s focus on the environment, there’s a chance that emissions laws will become stricter. And what if they do?

Buyers will have a whole new set of factors to consider when purchasing a piece of equipment. Suppose there is a used piece of construction equipment for sale that is not compliant with countrywide emissions standards. Would it be in a buyer’s best interest to purchase a used piece of equipment with a lower value and invest in making it compliant? Or would it be better to simply purchase the new piece of compliant equipment that has a higher value? And if all buyers decide that it makes sense to exclusively purchase new equipment, what’s a seller with a used piece of non-compliant equipment to do? Perhaps, keeping shipping costs in mind, his or her only option would be to sell the equipment to a country with less restrictive emissions standards.       

Whatever happens, idle speculation aside, you can trust that Present Value is thinking a few steps ahead.

By: Present Value

Tags: construction machinery, emmissions laws, machinery value

This entry was posted on Thursday, January 7th, 2010 at 7:12 pm and is filed under Machinery & Equipment Appraisal. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.