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Should Your Small Cleaning Business Buy New or Used Equipment?

Many small janitorial businesses face a dilemma: is it better to invest in new commercial cleaning equipment or save money by buying used janitorial equipment? In this guide, you'll discover the benefits and drawbacks of each option. Plus, you'll find out which insurance makes sense based on the kind of commercial property you own.

When Does Buying New Equipment Make Sense for Cleaning Companies?

When Does Buying New Equipment Make Sense for Cleaning Companies?

The benefits of owning new cleaning equipment are many. For example:

  • New equipment often comes with a warranty. Warranties ensure you don't have to pay to replace or repair faulty equipment. Because a good power washer or other piece of commercial cleaning equipment can cost $500, it's nice to know that if there is a defect, you can get the machine repaired at no cost.
  • New equipment is often more reliable. New gear breaks down less often, and when it does, you can usually find parts and supplies to fix it. It's especially smart to invest in reliable, high-performing equipment as your business expands so you can handle the extra workload.

On the downside, new equipment is a bigger investment. You can expect to spend more, a drawback you'll have to weigh against the benefits of owning new gear.

Also, you may have to train your employees on how to use new equipment if it is significantly different from models they're used to. (For more employee tips, read, "Tips for Hiring Employees in a Cleaning Business.")

When Is Used Equipment a Smart Choice for Janitorial Businesses?

When Is Used Equipment a Smart Choice for Janitorial Businesses?

On the other hand, used equipment may make sense for your small cleaning business if…

  • You want to spend less money on your cleaning gear. For many small businesses, especially those with a tighter budget, spending less is top priority. If you're able to find a good deal on gently used equipment, you can potentially add huge value to your business at a lower cost.
  • You know the seller. For instance, if you buy a power washer from a friend who only used it a handful of times, you can potentially save a hundreds of dollars and still get a high-performing piece of equipment.

As you might have guessed, the drawback of using older equipment is that you can't take it back to the store if it malfunctions or stops working.

Does Property Insurance Cover Used and New Equipment Differently?

Does Property Insurance Cover Used and New Equipment Differently?

Property Insurance reimburses your business when its equipment is lost or damaged because of theft, vandalism, fire, or a weather event covered under your policy. Commercial Property Insurance can cover all sorts of cleaning equipment, including…

  • Pressure washing equipment.
  • Window washing equipment.
  • Carpet cleaning equipment.
  • Pool cleaning equipment.
  • Floor cleaning equipment.
  • Commercial cleaning and janitorial supplies.
  • Office cleaning supplies.

For the most part, Property Insurance covers used and new equipment the same way, but there is one main exception. Property Insurance policies are either actual-cash-value or replacement-value policies. When you sign up for cleaning business insurance, you'll choose between these two options. Here's what you need to know:

  • Actual-cash-value policies reimburse your business for its equipment's current value. Because equipment depreciates, this value is less than what you paid for it. For instance, if your power washing equipment is five years old, it might be worth half of what you originally paid. Cash-value polices pay out the depreciated amount. This option makes sense if you plan on purchasing used equipment if anything happens to your current property.
  • Replacement-value policies have higher premiums, but they cover the cost of replacing your property with a new equivalent. This option may make more sense if you'd like to purchase brand-new gear when your property is damaged by a covered incident.

For more guidance on insuring your property, contact a cleaning services insurance agent.

Final Thoughts on Buying New or Used Cleaning Equipment

Final Thoughts on Buying New or Used Cleaning Equipment

Be sure to factor in the cost of insuring your cleaning equipment before you make any major purchases. When you work with an insurance agent with experience insuring cleaning businesses, they can tailor your Property Insurance to fit your equipment, cleaning supplies, and other commercial cleaning property.

To get started, submit an online insurance application, and we'll pair you with a cleaning insurance agent to handle your application and walk you through the process.

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