Half of Contractors have Little or No Tier 4 Equipment: Survey

April 25, 2016

For the second year, EquipmentWatch and AEMP have published a report that measures the overall adoption, acquisition and practical ownership of Tier 4 assets. Ownership remains low, but adoption is growing—slowly.

One in 10 contractors surveyed say they have no Tier 4 equipment, while 40 percent say Tier 4 iron makes up less than 20 percent of their fleet. That’s a mere 5 percent increase from last year.

When contractors were asked if they planned to invest in Tier 4 equipment in the next 18 months, 51 percent said, “No.”

Maintenance costs have been a concern for equipment managers from the beginning, despite OEM assurances. Some 96 percent of respondents expect maintenance costs for Tier 4 assets to either increase or remain on par with Tier 3 maintenance. Only 4 percent expect maintenance costs to decrease compared with Tier 3 units.

Those costs have come down slightly compared with the previous year. Respondents report spending a yearly average of $4,637 on Tier 3 equipment versus an average of $6,493 to maintain the average piece of Tier 4 equipment.

As for fuel, 22 percent of those surveyed expect the hourly fuel costs to decrease for Tier 4 equipment. Last year, the survey revealed a $12 per hour difference with Tier 4 equipment having lower hourly fuel costs; however, this year, a fairly equal hourly cost is being reported: $23.95 per hour for Tier 3 versus $23.40 per hour for Tier 4.

The survey also found that financing and insurance for Tier 4 equipment is costing more than it did for Tier 3 equipment. On average, businesses can expect to pay 15 percent more in financing and a significant 30 percent more in insurance. Owners and mangers are renting more Tier 4 equipment: 74 percent versus 58 percent the previous year. They’re also paying more for it: 12 percent more than the cost of renting Tier 3 machines. Equipment owners and managers still expect to see increases in purchase prices, and maintenance and training costs, but also a fuel cost savings.

Download the report.