There are a few significant factors in the outlook for government surplus sales. The trend over the past two or three years has been to retain equipment longer, as there has been almost universal budget reductions limiting the purchase of new or replacement equipment. Simply put, administrators are squeezing every last drop of life out of their current equipment inventories. This has meant less to sell, and what has been selling has been older and more worn.

A second significant factor is the continuing changes to emissions regulations and laws. Used diesel equipment values are changing, as legislation requires government agencies and contractors to be compliant with the new regulations. This means that older diesel-equipment values are increasing, especially to overseas buyers. 

A third factor is the potential economic recovery. As the economy bounces back, governments are likely to see an increase in tax revenues. This, combined with recession-induced streamlining, means that over the next year, budgets should loosen and purchasing departments should start authorizing new equipment purchases. As new equipment starts to trickle in, older equipment should be released to the market.

Since the volume of equipment to be sold will likely be less than a few years ago, and will likely be trickling in, we anticipate more aggressive marketing of equipment through online auctions rather than live auctions. This is a benefit to both buyers and sellers, as competition among online bidding providers (those supplying the technology to auctioneers), has increased tremendously. Technology is constantly improving to make the bidding and buying process easier, faster, and less troublesome.

All factors included, other than heavy diesel equipment, we anticipate more inventory on the market, and typically selling for somewhat less than in previous years. However, emissions-regulated heavy equipment, especially larger pieces, will enjoy a larger demand, and a more international market.

Rich Schur is the chief operating officer of Schur Success Auction & Appraisal, a Monument, Colo.-based company that has been the exclusive auctioneer for the City & County of Denver for more than 28 years. 
Schur is a master appraiser and a Certified Machinery & Equipment Appraiser. has featured Schur’s views in the past. He offered tips and trends for staging government auctions here and here.