Finance and growth
When to sell or replace hire equipment
When to sell or replace a hire machine: the warning signs, keep-versus-replace numbers, depreciation, capital allowances and how to sell for the best price.
Key takeaways
- Sell when a machine's repair costs and downtime start eating the margin it earns.
- Compare keep vs replace over the next 12–24 months, including resale value.
- Popular, well-kept machines hold value; selling before major repairs usually pays.
- From April 2026 the main-rate writing-down allowance is 14%, and a 40% first-year allowance covers new plant for hire. Check the tax with your accountant.
- Plan a replacement cycle so the fleet doesn't age all at once.
Signs it's time
- Utilisation below break-even for several months.
- Repair costs rising year on year.
- Repeated breakdowns or customer complaints.
- A major component (engine, pump, undercarriage) is due.
- Newer emissions standards or customer requirements it doesn't meet.
- You keep cross-hiring a different machine customers prefer.
Run the numbers
| Keep | Replace |
|---|---|
| Expected repairs and servicing next 12–24 months | Finance or cost of the replacement |
| Expected downtime and lost hire | Higher rates or utilisation from a newer machine |
| Resale value in 12–24 months (lower) | Resale value now (higher) |
| No new finance commitment | New finance payments and deposit |
Use the utilisation and break-even calculator for each option.
Depreciation and residual value
Machines lose value fastest in the first years, then more slowly. Residual value depends on brand, hours, condition, service history and demand for that model. Popular small excavators from mainstream brands with full service records hold value best. Keep records and photos: they're worth money at resale.
Capital allowances
| Allowance | Summary |
|---|---|
| Annual Investment Allowance | 100% relief on qualifying plant up to £1 million a year, new or used |
| First-year allowance (from 1 Jan 2026) | 40% on new main-rate plant, including plant for hire or leasing; not second-hand |
| Full expensing | 100% for companies on new main-rate plant, but excludes plant for leasing/hire |
| Writing-down allowance | Main rate 14% a year from April 2026 (previously 18%) |
Summary only. How allowances apply depends on your business structure and finance type. Check with your accountant.
Selling a machine can trigger a balancing charge or allowance depending on what you claimed. Plan sales with your accountant, especially near your year end.
How to sell
| Route | Pros | Cons |
|---|---|---|
| Part-exchange with a dealer | Quick, simple | Usually lowest price |
| Private sale or online listing | Better price | Time, buyer checks, payment risk |
| Auction | Fast, wide market | Fees; price uncertain |
| Sell to a customer who hires it | Easy, they know the machine | May lose their hires |
- Clean it, fix small faults, and gather service history and LOLER reports.
- Settle any finance before or at sale; the lender usually owns it until then.
- Take payment by bank transfer and only release the machine once funds clear.
- Update your CESAR registration, insurance and tracker subscription.
Planning a replacement cycle
Rather than replacing machines only when they fail, plan a cycle, for example replacing each small excavator after a set number of years or hours. Stagger purchases so finance and replacement costs are spread out. Finance terms that end before major repairs usually begin make the cycle easier.
FAQs
Common questions
When should a plant hire company replace a machine?
What capital allowances can a plant hire business claim?
What's the best way to sell used plant?
Keep going
Related guides
Utilisation and break-even for hire equipment
Calculate break-even utilisation for each machine.
Read guide →
Finance
Hire purchase, leases and refinance for new hire firms.
Read guide →
Maintenance
Service intervals, off-hire checks and records.
Read guide →
Plant hire KPIs and monthly reporting
The numbers to review every month on one page.
Read guide →
This guide is general information for people setting up a plant hire business in the UK. It is not legal, tax, insurance or financial advice. Rules and thresholds change, so check current guidance on GOV.UK and take advice from an accountant, solicitor or broker before acting.