For 35 years, ELFA’s “What’s Hot What’s Not Equipment Market Forecast” report has provided a snapshot of trends in 15 equipment sales categories, as well as industry perceptions based on a survey of ELFA members When the 2025 report was released earlier this year, the top types included construction; machine tools; medical equipment; oil, gas, and energy equipment; and technology/computers and overall sentiment was optimistic.
However, since then, a more complex story is playing out, especially in used equipment sales. While the year began marked by widespread optimism in many categories, driven largely by anticipated economic growth, regulatory easing and expected interest rate cuts, the reality has proven much different.
Used Equipment 2025
The 2025 used equipment market can be summed up in one word: uncertain. As customers see uncertainty in the economy, many are hesitant to make purchases.
“If I hear, ‘We're going to wait until things get straightened out,’ one more time, I'll scream,” jokes Carl Chrappa, Senior Managing Director and Asset Management Practice Leader at Clearwater, Florida-based equipment finance consulting firm The Alta Group, LLC.
One of the leading indicators for both new and used equipment markets is capital expenditure (capex) forecasts. A range of factors, including both economic and policy issues, have led to reductions in those forecasts in the face of questions about tariffs, policy issues, and the economy writ large, among others. According to the Institute of Supply Management (ISM), overall capex was forecasted to increase by 5.2% in December 2024. However, the ISM’s Spring 2025 report shows an increase of +0.6% for the year.
“If I hear, ‘We're going to wait until things get straightened out,’ one more time, I'll scream.”
—Carl Chrappa, Senior Managing Director and Asset Management Practice Leader, The Alta Group, LLC
Chrappa, who is a member of the ISM, says his own research into bank capex forecasts is split, with some showing similar estimates to the ISM and others showing a small increase for the year, “but it's lower than what would have been forecast in December, for sure,” he says. Those forecasts will affect used equipment markets in different ways.
An Uncertain Horizon
Concerns about inflation, interest rates, policy change impact, recession are all contributing to market malaise, Chrappa and others say. In May, the Federal Reserve held interest rates steady and, in a statement, reiterated its commitment to using monetary policy to reduce the inflation rate to 2%. And while recession concerns are easing, J.P. Morgan Research still puts the probability at 40% in 2025, down from a high of 60%.
However, perhaps the hottest topic of discussion has been the on-again, off-again tariff announcements. At press time (in mid-June), tariff announcements were still uncertain. While agreements were announced with China and the UK, a 90-day pause was still in effect. Legal action and court rulings in late May also raised new questions about whether and when tariffs would be imposed.
“Of course, everybody's watching the tariffs and wondering how they will impact the pricing and availability of new equipment , and if those tariffs will create some supply shortages and challenges. Right now, there's just a lot of uncertainty with regard to how manufacturers will react and respond,” says Wade W. Whitenburg, Strategic Accounts Manager Finance & Insolvency Management, at Ritchie Bros. Auctioneers in Houston, Texas.
“The willingness of different banks and finance companies to fund different industry segments.... is impacting the pricing that we're seeing for used transportation assets.”
—Wade W. Whitenburg, Strategic Accounts Manager Finance & Insolvency Management, Ritchie Bros. Auctioneers
The impact of tariffs and other factors on new equipment markets has a ripple effect on used equipment markets, Whitenburg says. “There are a number of factors that make them quite different, however, they do react to one another,” he says.
While some tariff declarations have initially been high—the imposition of a total 145% cost increase on imports from China before the May deal was announced, for example—some manufacturers have made pre-emptive announcements about how they will handle passing along those costs to customers to quell their fears, he says.
Joseph Santora, President of asset management and appraisal company Irontrax, based in Chagrin Falls, Ohio has done some of his own research on specific manufacturers and how they will handle tariffs on new equipment. “Peterbilt decided they were going to do a $3,000 flat surcharge. Liebherr, which manufactures cranes and construction equipment mostly in Germany is looking at 10%. Tadano manufactures some equipment in Germany, some in Japan. They have stated that they're going to split the cost of the tariff with the customer,” he says. Chrappa adds that some manufacturers have estimated their price increases at just a few percentage points, even if tariff announcements indicated that the cost might be much higher. “And some manufacturers are just going to eat them,” he says.
Even with such reassurances, many businesses are still in wait-and-see mode, says Dennis Bolton II, Head of North America Equipment Finance at Gordon Brothers. “I would say the largest issue that has come out of the proposed tariff plans is just all the unknowns it creates. It makes it really hard to run a business when you don't know what the economic environment is, or what the biggest business regulatory environment is going to be,” he says.
Category and Policy Factors
Within each industry sector, various factors influence used equipment sales. When a sector’s new equipment is plentiful and dealers are flush with inventory—such as in the construction market—that typically places downward pressure on used equipment markets. So, while used equipment markets may ultimately benefit from tariffs as customers seek to avoid price increases driven by the tariffs, that may not happen until existing inventory has been exhausted. Whitenburg says he has also seen multinational manufacturers moving equipment to the U.S. during the pause to avoid tariff-driven price increases later on.
Santora’s company deals with many customers in construction and trucking. “There's so much inventory sitting here stateside, that [tariffs] aren’t really a huge issue unless you're ordering something new,” he says.
Santora says he’s seen auction sales become softer, and margins tighter over the past 18 months. “When you were negotiating, you could squeeze out another $5,000 if you're trying to sell a wheel loader. Those days are over,” he says. However, he says that the market for low-hour, late model equipment has remained strong regardless of other economic factors.
“There's so much inventory sitting here stateside, that [tariffs] aren’t really a huge issue unless you're ordering something new.”
—Joseph Santora, President, Irontrax
Beyond tariffs, the new administration’s policy priorities may also create opportunities and headwinds for various sectors. Bolton says there’s excitement in the steel and coal mining sector as the U.S. steel issue is resolved leading to new and upgraded manufacturing capacity. Conversely, many renewable energy incentives and credits are being eliminated, so equipment sales in those sectors may see lighter demand.
“Think about what goes into a wind turbine and what is required to put it up. You’ve got to make all the components that go into it, not to mention the planning, logistics and special vessels required,” Bolton says. “Under the last administration, they were looking at putting up installations all around the U.S. from the East Coast to the Gulf Coast to the West Coast. So that's a lot of manufacturing and investment that either won't be developed or will likely get dramatically downsized.”
Whitenburg says he’s not seeing much pre-buying during the tariff pause, but companies are moving forward on essential equipment, especially if there are concerns about availability or financing. “The willingness of different banks and finance companies to fund different industry segments, particularly transportation, is definitely impacting the pricing that we're seeing for used transportation assets,” he says. “We’re continuing to see increased price pressure on over-the-road trucks versus heavy-haul.”
Adapting to Changes
However, as circumstances evolve, equipment finance companies need to watch carefully and prepare to adapt to them, Chrappa says. For example, if tariffs do end up driving up costs across the board, used equipment may become an attractive option for many buyers. In that case, credit departments may play a bigger role in dealmaking going forward, Chrappa says. “They’d have to learn about new types of equipment, and what the used equipment market looks like for this piece of equipment we're trying to finance. And so, it's an expansion of the credit department's role.”
Santora says that the ultimate impact of market changes, especially related to tariffs, raises questions about equipment valuation, too. His team recently finished an evaluation for a crane rental company. The equipment this company imports is subject to a 10% tariff. “The argument is, as it sits today, is the crane worth more because of the tariff?” he asks. Since appraisals are a snapshot of the current moment, “from today's standpoint, what we assumed was that the cost and the increase for the tariff basically offset any depreciation in the crane, but that we followed that up with saying, if these tariffs go away, you could see an accelerated depreciation of this asset next year, which would also have an impact on used equipment valuations.”
“I would say the largest issue that has come out of the proposed tariff plans is just all the unknowns it creates.”
—Dennis Bolton II, Head of North America Equipment Finance, Gordon Brothers
Rental and leasing sectors may also see growth, which is a shift that happened after the Great Recession, Whitenburg says. “At that time, companies really changed their strategy and went to owning only their core equipment and then leasing any peripheral equipment they might need for specific jobs,” he says. However, if accounting laws change how companies can write off such equipment, that may also have an impact on the choices clients make. Chrappa adds that a combination of a move to leasing and rentals combined with a demand for used equipment may require that equipment leasing and finance companies explore new and unfamiliar models for leasing used equipment.
And the shift may be worthwhile. Santora says, according to his research, major equipment manufacturers are largely reporting lower profits in the first quarter. However, rental companies are performing well. “This happens anytime a market softens. Contractors move to rental, as opposed to buying new because the rental they can rent for a few months, and turn it back. They don't have a big capital expenditure,” he says.
Operating leases are a niche where Bolton works. “Our strategy is to invest in companies that have already been affected by market dislocations or operational issues they didn't create,” he says. He and his team invest in management teams and help revive a company—and nearly all the equipment they finance or lease is used.
“There was a whole group of companies that were already struggling, and this environment has made it worse; however, we have the ability to assist these companies through their turnaround.”
In addition to the opportunities that can be found in virtually every market, Whitenburg reminds member companies that they’ve been through challenging times before, pointing to both the Great Recession and the pandemic era. “During times like these, you get back to the industry fundamentals,” he says. Actively manage your portfolio and keep up with current market conditions, policies, and other external factors.”
Bolton agrees. “I would be very deliberate in your decision making and understand why you're doing it. Analyze the factors that go into that decision-making process and what changes could affect your assumptions,” he says.