Buying Restaurant Equipment: New, Used, or Both?
Determining whether to purchase new or used restaurant equipment can be challenging for new restaurant owners. Cost, quality, and specific business needs are the top factors to consider. Restaurateurs can furnish a small commercial kitchen with under $15,000 if they are buying restaurant equipment used, but costs can increase to more than $50,000 with new equipment.
Must-have equipment for restaurants
Before deciding whether to purchase new or used equipment, consider your restaurant’s needs. The menu is the driving factor that separates the equipment you want vs the equipment you need. For instance, cooking equipment like fryers and stoves are vital for businesses specializing in southern-style food but are unnecessary for those that sell raw vegan food.
Another factor to consider is the amount of space inside your establishment as it can limit the type of equipment that will fit.
Some of the most common equipment restaurateurs need before opening their doors for business are:
- commercial refrigerators
- food processor
- food preparation counters
- sinks and faucets
- commercial ovens and grills
- dish-washing machines
- water filters
Safety equipment is also important for protecting restaurants from liability if the unexpected occurs.
New vs used restaurant equipment pros & cons
There’s always a level of uncertainty when deciding if purchasing used restaurant equipment is a good idea. Saving thousands of dollars on the initial purchase is appealing, but the risk of wasting money on equipment that may not last through the year can be overwhelming. So which is better—new equipment or used?
There are pros and cons to buying used restaurant equipment. Just because a piece of equipment is used doesn’t mean it’s useless. Consider people who have purchased used cars in their lifetime. Some drive their cars for five years or more without any major issues, while others with brand-new cars need major repairs within the first three years. Generally, new purchases last longer and have a more modern design, but with careful inspection and upkeep, a used purchase can last just as long.
Pros of purchasing used equipment for restaurants
Here are pros to purchasing used restaurant equipment:
- Less expensive to purchase: You can purchase used equipment for a fraction of the cost of new equipment. Equipment that costs $1,000 new could be purchased for $250 if used.
- Negotiable: When purchasing used equipment, you have more room for negotiation. When buying from an individual owner, dealer, or auction, you should make an offer below the maximum amount you’re willing to pay so you have space to increase it if necessary.
- Shorter life-span: During tax time, you can write off your equipment purchase as a business expense to lower your tax bill (similar to how you would with new equipment).
- Like-new quality: Some used restaurant equipment is gently used or only has cosmetic flaws, like ‘scratch and dent’ floor models. In these cases, you’re getting a bargain, because you still pay a fraction of the cost of newer models but get a similar quality.
Cons of purchasing used equipment for restaurants
Here are cons to purchasing used restaurant equipment:
- Higher repair costs: Used equipment can sometimes require regular repairs, depending on its age and how well it was serviced over the years.
- No warranty: Unlike new equipment, used restaurant equipment doesn’t typically come with warranty; however, in some cases, you can purchase at least a year’s worth at an affordable rate.
- Fewer options: Because used equipment is usually pooled with a variety of other used pieces, you won’t find as many options as you would purchasing from a new dealer. Purchasing from an individual offers the fewest options as they don’t typically have different models of the same type of equipment. Used equipment dealers offer more variety.
- Visually less appealing: Used equipment may have chipped paint and a few dings here and there from its prior use in the kitchen and transporting it place to place.
Pros of purchasing new equipment for restaurants
Here are pros to buying restaurant equipment new and unused:
- Fewer repairs: New equipment is less likely to need repairs any time soon. There’s no wear-and-tear as there is with used equipment. Also, many newer models are built using higher quality materials, which makes them more durable.
- Warranty included: You are usually covered for a year or more with new equipment, so in the event that repairs are needed, there will be limited to no out-of-pocket costs.
- Longer lifespan: Restaurant equipment that’s purchased new tends to last longer than used equipment.
- More energy-efficient: As the world pushes for more sustainability and energy efficiency, materials used to build restaurant equipment will continue to evolve. New models have more energy-saving features than older models, because sustainability priorities are a new development.
Cons of purchasing new equipment for restaurants
Here are some of the cons to purchasing new restaurant equipment:
- Costly: New equipment can cost three to four times more than its used counterpart.
- More likely to need financing: Because of the high costs of new equipment, many restaurateurs seek financing to purchase. $50,000 can be a hefty price tag for new entrepreneurs, and depending on the size of their restaurant, it can be more than $150,000.
- Longer delivery time: New equipment can sometimes take weeks to deliver, depending on where it’s purchased, but used equipment is usually available within a couple of days at most.
Tips for purchasing used restaurant equipment successfully
Buying restaurant equipment used can be stressful because there are a lot of factors to consider. New entrepreneurs don’t want to throw the dice when it comes to their capital, because every dollar counts.
Here are a few best practices to increase your chances of making a successful used equipment purchase:
- Avoid purchasing used refrigerators: Refrigerators (and freezers) are significant purchases and can make or break a business if something goes wrong. It’s a good idea to buy them new if possible, because finding a good value can be a hit-or-miss.
- Perform due diligence: If you’re able to have the equipment inspected (especially expensive pieces), it’s a good idea. Do your research beforehand so you know what to look for. If you’re purchasing at an auction, consider how much you trust the auction broker.
- Purchase equipment under five years old: Equipment older than five years may not be up to regulatory standards. Also, if it’s only a few years old, there may still be time remaining on the manufacturer’s warranty.
- Purchase top brands: Purchasing used versions of the top brands will give you more bang for your buck. Top brands usually have greater quality than the alternatives, so the equipment is more likely to have a longer life span and fewer repairs over time.
When buying restaurant equipment, restaurateurs don’t have to rule out new or used equipment. Purchasing both is a good strategy that saves money and ensures the most vital pieces, for instance, commercial refrigerators, are the best quality. Regardless of what equipment is needed, research should always be a priority to avoid rookie buyer mistakes and to get the best value.