The construction industry can be as unpredictable as the weather you're exposed to daily. Because of this, you understand the need for having coverage in place to protect your equipment against damage, malfunctions and other potentially disruptive incidents. The manufacturers you work with also know the importance of maintaining you productivity and avoiding costly downtime related to machine failure.
That's why nearly all manufacturers offer a standard warranty with the purchase or financing of their equipment. This warranty typically covers anywhere from six to 12 months of worry-free operation. The purpose of the standard warranty is to ensure the equipment functions within the allotted time period, allowing your small business to keep operating.
But what happens after the original standard warranty expires? Construction equipment is manufactured to last significantly longer than the six to 12 months typically covered by a standard warranty. In fact, machinery may last five, 10 or even 20 years if properly maintained and repaired. To secure this equipment over the long run, an extended service protection plan guarantees your investment is safeguarded beyond the standard warranty period.
Consider these three benefits you receive from an extended protection plan:
1. Protect your equipment beyond the warranty date
As noted, an extended service protection plan provides the additional coverage needed to secure your equipment for the long haul, without adding any additional hassles or confusion.
If you're like the industry as a whole, you're going to want more flexibility and convenience for the equipment you're financing, as this is one of the Top 10 acquisition trends identified by Equipment and Leasing and Finance Association.1 An extended service protection plan provides both.
For example, equipment financiers will wrap an extended protection plan around the standard factory warranty for machines and power systems. This allows for several different levels of coverage, from which you can choose the one that best serves your company's financial needs.
An extended service protection plan also provides you with fixed costs for machine or engine repairs. This allows you to more accurately make long-term financial projections while also reducing your exposure to the risks and stress that accompany equipment downtime.
2. Receive high-quality repairs
Another perk of the extended service protection plan is that it offers you high-quality repairs on your equipment and engines. If there is an equipment failure or malfunction, you'll have to hire a mechanic to fix the problem. Not only can this be expensive, but there's no guarantee the mechanic will use the best parts to repair the problem.
An extended service protection plan guarantees your equipment will be repaired by factory-trained technicians replacing the same parts used during the original manufacturing process. Access to top-notch repairs will ultimately prolong the life of your equipment. This enables you to work without interruption for a longer period of time and enhances your return on investment. And longer-lasting equipment equals greater ROI.
3. Boost equipment's resale value
With greater access to additional long-term coverage and high-quality repairs, your equipment's resale value increases.
Nearly three quarters of contractor client respondents to the Wells Fargo "2016 Construction Industry Forecast" expected their used equipment sales to increase or remain the same during the year.2 As companies gear up for equipment re-sales, it is important units are in the best condition possible. While this can be difficult to achieve, considering the gauntlet of dirty work your put your machines through on a typical day, the high-quality repairs and long-term coverage afforded by an extended service protection plan helps you obtain the best possible resale value for the equipment.
The extended protection plans offered by Cat Financial prolongs the coverage offered by a traditional standard factory warranty, guarantees high-quality repairs on your Cat® machines and power systems and can ultimately boost the equipment's resale value. With these benefits and more, you can better manage your risks and protect your small business's investments against the uncertainty and unpredictability typical of the construction industry.