The Cheapest Excavator Is Often the Most Expensive One You Can Buy

There is a dangerous sentence in the earthmoving industry:

“We got it cheap.”

Cheap is seductive.

A bargain feels like a bargain.

You find a 20-tonne excavator for R600,000 when similar machines are selling for R900,000.

You feel pretty good about yourself.

You have just saved R300,000.

Or have you?

Because there is a fundamental difference between:

The price you pay for an excavator

and

The cost of owning that excavator.

And if you don't understand the difference, that “cheap” excavator can become one of the most expensive purchases your business ever makes.

At Vikfin, we spend a lot of time around used excavators.

We see machines that are incredibly good value.

We also see machines that look cheap right up until the repair bills start arriving.

The difference usually isn't the purchase price.

It's what you're buying underneath the paint.

Let's Start With Two Excavators

Imagine you're looking for a 20-tonne excavator.

You find two machines.

Excavator A

Purchase price:

R600,000

Hours:

14,000

Poor maintenance history.

Worn undercarriage.

Hydraulic leaks.

Tired engine.

Original final drives.

Rough cab.

Excavator B

Purchase price:

R850,000

Hours:

8,000

Good maintenance history.

Healthy engine.

Good hydraulics.

Strong undercarriage.

Good final drives.

Well maintained.

At first glance, Excavator A looks like the obvious winner.

You've saved:

R250,000.

But now let's assume Excavator A needs:

Undercarriage:

R150,000

Hydraulic repairs:

R80,000

Engine work:

R100,000

Electrical repairs:

R30,000

Miscellaneous:

R40,000

You've just spent another:

R400,000.

Your R600,000 excavator is now a:

R1 million excavator.

And you've still got a machine with 14,000 hours on it.

Suddenly Excavator B doesn't look so expensive.

Purchase Price Is Only the Beginning

This is the biggest mistake buyers make.

They compare:

Machine price vs machine price.

They should be comparing:

Total cost of ownership vs total cost of ownership.

The purchase price is only one component.

You also need to consider:

• Finance costs

• Transport

• Initial repairs

• Maintenance

• Fuel

• Tyres/tracks

• Undercarriage

• Hydraulic components

• Engine repairs

• Downtime

• Insurance

• Operator costs

• Resale value

Some of these costs are unavoidable.

Others are directly influenced by the condition of the machine you buy.

The “Cheap” Excavator Tax

Let's call this the Cheap Excavator Tax.

You save R200,000 on the purchase price.

Then you spend:

R50,000 fixing leaks.

R80,000 on the hydraulics.

R120,000 on the undercarriage.

R100,000 on the engine.

R40,000 on electrical repairs.

R30,000 on miscellaneous problems.

You've now spent:

R420,000

trying to make your cheap excavator reliable.

And there is another cost:

Downtime.

Downtime Is the Silent Killer

This is where the economics get particularly nasty.

Imagine the excavator generates R6,000 of productive revenue per day.

It spends:

10 days off the road during initial repairs.

That's:

R60,000 of lost production.

Then it breaks again.

Another seven days.

R42,000.

Then another problem.

Five days.

R30,000.

You've now lost:

R132,000

in potential production.

That doesn't appear on the excavator's invoice.

But your business feels it.

The R600,000 Excavator Can Become a R1.1 Million Excavator

Let's put the numbers together.

Purchase:

R600,000

Repairs:

R400,000

Downtime:

R132,000

Transport and miscellaneous:

R30,000

Total:

R1,162,000

Your “cheap” excavator has now cost you:

R1.16 million.

And the really painful part?

You might have bought a much better machine for R850,000 in the first place.

But Here's the Important Twist

This doesn't mean:

“Always buy the most expensive excavator.”

That would be equally bad advice.

A more expensive machine isn't automatically better.

A 15,000-hour excavator with immaculate paint and a dealer's sticker on the side can still be a disaster.

Likewise, a 14,000-hour machine that has been properly maintained can be an absolute bargain.

Condition matters more than price.

And condition matters more than hours alone.

Don't Get Obsessed With Hours

Hours are useful.

But they're not the whole story.

A 10,000-hour excavator that has been properly maintained can potentially be a much better machine than a neglected 6,000-hour machine.

You need to look at the entire machine.

Ask:

• How was it maintained?

• Where did it work?

• What type of material was it digging?

• How many operators used it?

• Was it serviced regularly?

• Were OEM parts used?

• Has the hydraulic system been maintained?

• What condition is the undercarriage in?

• What condition are the pins and bushes in?

• What is the engine condition?

• What is the hydraulic pump condition?

The hour meter is one data point.

It's not the verdict.

Where Did the Excavator Work?

This question is often overlooked.

A machine working in a clean agricultural environment may experience completely different wear from one working:

• In a quarry.

• In a demolition operation.

• In abrasive rock.

• In a mine.

• In a landfill.

• In a recycling operation.

Two excavators with identical hours can have radically different levels of wear.

A machine that spent 10,000 hours moving soft soil is not necessarily comparable to one that spent 10,000 hours breaking rock.

Application matters.

The Undercarriage Can Destroy Your Budget

If there is one area buyers consistently underestimate, it's the undercarriage.

You've got:

• Track chains

• Shoes

• Rollers

• Idlers

• Sprockets

• Track adjusters

A machine can look fantastic from ten metres away.

Walk closer.

Look at the tracks.

A worn undercarriage can easily turn a bargain into a nightmare.

And the worst part is that undercarriage wear is not always obvious to an inexperienced buyer.

You need to know what you're looking at.

Hydraulic Condition Matters Even More

Hydraulics are the heart of an excavator.

A tired hydraulic system can produce:

• Slow movements.

• Weak digging.

• Excessive heat.

• Poor response.

• Hydraulic noise.

• Leakage.

And replacing major hydraulic components can be expensive.

A hydraulic pump.

A valve bank.

A slew motor.

Final drives.

These aren't cheap components.

A machine that looks cheap because of its purchase price may actually be carrying several hundred thousand rand of hidden hydraulic risk.

The Engine Isn't Everything

Here's another mistake.

People often focus entirely on the engine.

“The engine sounds good.”

Great.

But an excavator isn't a truck.

The engine is only one part of the machine.

You also have:

• Hydraulics

• Final drives

• Slew system

• Swing bearing

• Undercarriage

• Cylinders

• Electrical system

• Structure

• Cooling system

A beautiful engine attached to a destroyed hydraulic system isn't much use.

You are buying an excavator, not an engine.

The Most Important Parts Are Often the Expensive Ones

When inspecting a used excavator, pay particular attention to components that are expensive to replace.

For example:

Engine

Major repair = expensive.

Hydraulic pump

Major repair = expensive.

Final drives

Replacement = expensive.

Slew motor

Replacement = expensive.

Valve bank

Replacement = expensive.

Swing bearing

Replacement = expensive.

Undercarriage

Complete replacement = expensive.

Main structure

Repair = potentially very expensive.

A few cosmetic scratches don't matter much.

A damaged slew bearing does.

Paint Is Cheap

This deserves its own section.

Paint is cheap.

A machine can be made to look fantastic.

Fresh paint.

New decals.

Clean cab.

Polished metal.

It looks like a million bucks.

But underneath?

You could have:

• Worn pins.

• Worn bushes.

• Damaged cylinders.

• Tired hydraulics.

• Worn tracks.

• A tired engine.

• Electrical problems.

Don't buy paint.

Buy machinery.

The Used OEM Parts Equation Changes Everything

Here's where things get interesting.

Suppose you buy an older excavator.

It's not perfect.

But you've done your homework.

The engine is good.

The hydraulics are good.

The structure is good.

The undercarriage has life remaining.

The machine is fundamentally sound.

Now, over the next few years, components will inevitably fail.

That's where used OEM parts can change the economics.

Instead of:

New OEM component

you may have the option of:

Used OEM component

or:

Refurbished OEM component.

This can dramatically reduce the cost of keeping an older machine operational.

Older Doesn't Necessarily Mean Worse

There is a strange assumption in machinery:

Newer = better.

Sometimes.

But not always.

A 2010 excavator that has been properly maintained can be a fantastic business asset.

A 2020 excavator that has been abused can be a nightmare.

The question isn't:

“How old is it?”

The question is:

“What condition is it in, and what will it cost me to own?”

The Economics of an Older Excavator Can Be Excellent

Let's compare two machines.

Machine A

Purchase price:

R1.2 million

Newer.

Lower hours.

More expensive parts.

Machine B

Purchase price:

R650,000

Older.

Higher hours.

Parts readily available.

Used OEM components widely available.

Suppose Machine B costs an additional:

R100,000 per year

in maintenance.

Over three years:

R300,000

Machine B has effectively cost:

R950,000

Machine A cost:

R1.2 million

Machine B may therefore still be the better business decision.

Especially if both machines produce roughly the same amount of work.

The Question Is Not “How Much Does It Cost?”

This is perhaps the most important lesson.

When buying an excavator, don't ask:

“What does it cost?”

Ask:

“What does it cost me to produce a day's work?”

That's a completely different question.

If Excavator A costs R1 million but produces work reliably for five years, it might be cheaper than Excavator B at R700,000 that spends half its life in the workshop.

The business doesn't care how much the machine cost.

It cares about:

Productivity.

Reliability.

Availability.

Operating cost.

Residual value.

Think in Cost Per Hour

A very useful way to compare excavators is cost per operating hour.

Suppose:

Excavator A

Purchase:

R900,000

Expected productive life remaining:

10,000 hours

Capital cost per hour:

R90

Excavator B

Purchase:

R600,000

Expected productive life remaining:

4,000 hours

Capital cost per hour:

R150

The cheaper excavator actually has the higher capital cost per productive hour.

And we haven't even considered maintenance.

This is why looking only at purchase price can be so misleading.

Add Maintenance to the Equation

Now imagine:

Excavator A

Capital:

R90/hour

Maintenance:

R60/hour

Total:

R150/hour

Excavator B

Capital:

R150/hour

Maintenance:

R120/hour

Total:

R270/hour

Suddenly the “cheap” machine is almost twice as expensive to operate.

That's the number that matters.

Residual Value Matters Too

Don't forget what the machine will be worth when you're finished with it.

Suppose you buy an excavator for:

R900,000

and sell it five years later for:

R500,000

Your effective capital depreciation is:

R400,000.

Another machine might cost:

R650,000

but be worth only:

R200,000

after five years.

Its depreciation is:

R450,000.

The more expensive machine actually lost less money.

Again:

Purchase price isn't the whole story.

The Best Excavator Is the One That Makes You Money

This sounds obvious.

But it's surprisingly easy to forget.

You're not buying a machine because you like the colour.

You're not buying it because it looks impressive.

You're not buying it because the seller says it's a bargain.

You're buying it because:

It is supposed to make money.

That means the best excavator is the one that gives you the best combination of:

• Purchase price

• Productivity

• Reliability

• Maintenance

• Fuel efficiency

• Parts availability

• Downtime

• Residual value

That's your real investment.

A Practical Used Excavator Buying Checklist

Before buying, inspect:

Engine

• Oil condition

• Coolant

• Blow-by

• Smoke

• Starting

• Power

• Temperature

Hydraulics

• Pump performance

• Hydraulic leaks

• Cycle times

• Hydraulic temperature

• Valve-bank performance

Cylinders

• Rod condition

• Leaks

• Pitting

• Mounting points

Undercarriage

• Track pitch

• Track-chain wear

• Shoes

• Rollers

• Idlers

• Sprockets

• Adjusters

Slew system

• Slew motor

• Slew gearbox

• Swing bearing

• Excessive play

Structure

• Boom

• Dipper

• Chassis

• Track frames

• Counterweight

Electrical

• Wiring

• Sensors

• Displays

• Starting system

• Alternator

History

• Service records

• Previous repairs

• Previous owners

• Operating environment

• Accident history

And Then Ask the Most Important Question

After you've inspected the machine, ask:

“If I buy this machine, what is likely to go wrong next?”

This is where experience becomes incredibly valuable.

Every excavator has components that are approaching the end of their useful life.

If the machine has 12,000 hours, you should be thinking about what typically needs attention around that stage.

If you know the model well, you can anticipate problems.

And if you know where to source the parts, you can budget for them.

That turns an unexpected breakdown into a planned maintenance expense.

This Is Where Vikfin Comes In

At Vikfin, we have a somewhat unusual relationship with older excavators.

We don't necessarily see age as a negative.

We see components.

A 15-year-old excavator might have:

• A perfectly good engine.

• A perfectly good valve bank.

• Good final drives.

• Good slew motor.

• Good hydraulic cylinders.

• Good cooling system.

And if one component fails, it doesn't mean the whole machine is obsolete.

It means you need the right component.

That's the philosophy behind our business.

The Economics of Repairing Older Machines

There is a reason we specialise in used OEM parts.

Because repairing older machinery can make enormous economic sense.

Imagine your excavator is worth:

R700,000

You need a final drive.

New OEM:

R200,000

Used OEM:

R80,000

If the used component performs correctly and has useful life remaining, you've just saved:

R120,000.

And you haven't had to replace a R700,000 asset.

That's the fundamental proposition behind used OEM parts.

You don't need a new excavator every time something goes wrong.

The Most Expensive Excavator Is the One You Can't Keep Working

Think about it this way.

An excavator that costs R500,000 and works 90% of the time may be a terrible investment.

An excavator that costs R900,000 and works 98% of the time may be an excellent one.

Because the machine isn't there to sit in your yard.

It's there to work.

Every day it works, it produces.

Every day it sits idle, it costs.

So, Should You Buy the Cheap Excavator?

Sometimes the answer is:

Absolutely.

If you've inspected it.

If you understand its condition.

If the repair risks are manageable.

If parts are available.

If the numbers work.

A cheap excavator can be an exceptional investment.

But if you're buying it simply because:

“It's R300,000 cheaper than the other one.”

Stop.

Do the maths.

Because you might not have found a bargain.

You might have found a machine that is:

R300,000 cheaper to buy

and

R500,000 more expensive to own.

The Vikfin Rule

Here's our simple philosophy:

Don't buy an excavator based on its purchase price.

Buy it based on:

What it will cost to own.

And when you're assessing an older machine, don't assume that every future repair has to involve a brand-new OEM component.

There are often alternatives.

Used OEM.

Refurbished OEM.

Aftermarket.

Repair.

Sometimes even components from another machine or model where genuine compatibility can be established.

That's how you keep the economics working.

Cheap Is a Number. Value Is a Calculation.

Anyone can tell you what an excavator costs.

A good machinery buyer wants to know what it will cost to own.

That's a much harder question.

And it's the question that separates a genuine bargain from a very expensive mistake.

So the next time you see an excavator advertised for a suspiciously low price, don't immediately reach for your cheque book.

Walk around it.

Inspect it.

Test it.

Ask questions.

Look underneath the paint.

Check the hydraulics.

Check the undercarriage.

Check the history.

Calculate the likely repairs.

Calculate the downtime risk.

Calculate the residual value.

Then...

do the maths.

Because the cheapest excavator to buy may not be the cheapest excavator to own.

And in the earthmoving business, that's the number that really matters.

Vikfin — Flexible. Fast. Friendly. Affordable.

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