Should I Buy New or Used Equipment?

Consider leasing equipment to save money at your restaurant
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Dear Restaurant Guide,

I am getting ready to open my new restaurant in a few weeks. I just got cleared for financing from the bank. Now I am starting to buy equipment for the restaurant kitchen. My business partner and I can’t agree on what type of equipment we should buy. I say we should buy as much used equipment as we can, to save money for all the other start-up costs. He says we should buy new, because it comes with a warranty and if we buy used we will end up spending more on fixing the equipment, down the road or replacing it all together. What should we do?

Advantages of New Restaurant Equipment

You are both right – to an extent. Purchasing new equipment has an obvious advantage…it’s new. And as your business partner pointed out, it comes with a warranty. However, depending on the type of equipment, it a bit liking buying a car, the minute it leaves the showroom, its value dramatically decreases. Because new restaurants have kind of high failure rate (I know, not what you were looking to hear right now) you can often find purchase quality used restaurant equipment for pennies on the dollar. Bigger, pricy pieces of restaurant equipment, such as stoves, ovens, refrigeration units are also a good deal, when purchased used. Another point to remember about buying used equipment is that prices are not always set in stone. You can often haggle the prices with dealers. So don’t be afraid to ask for a lesser price when looking at used equipment.

You can find lots of used restaurant equipment through commercial auction houses. If you go to a restaurant auction, do your homework and find out how long the place was open. Examine the appliances, looking for telltale signs of wear and tear like rust, missing parts, ect. If you are really lucky, you can still get the warranty with a piece that is not too old. Gas ranges, one of the most expensive pieces of commercial kitchen equipment you’ll have to buy, usually have very long life spans and should definitely be considered buying used. Read more about the pros and cons of buying used equipment.

Benefits of Leasing Restaurant Equipment

Leasing commercial equipment is another option, when outfitting a new restaurant. Certain pieces of restaurant equipment are better suited to leasing, because of their short life span. They wouldn’t be worth the investment to buy new. These items include ice machines, dishwashers, coffeemakers and coolers. Often times the latter two – coffeemakers and coolers- will be provided free by your beverage distributor.

The last thing I recommend you think about is the size of your overall restaurant, your menu and your kitchen. You may think you need a lot more equipment than you actually do. For example, when I outfitted my last restaurant kitchen, I added in a pricy refrigerated set of drawers to the kitchen line, in addition to the reach in coolers. This was totally unnecessary. In the end we found it more efficient to store the food all in one cooler, rather than a hodgepodge throughout the kitchen. And the drawers were always sticking and ended up breaking (after the warranty, of course).

Other Ways to Save Money at Your Restaurant

Outside of your restaurant kitchen, there are many places you can save money buying used equipment. While it would be nice if your restaurant was all sparkly and new, just remember, new doesn’t always equate better. Glassware, linens, baskets, flatware are all steals when purchased used. Tables and chairs are also good deals, but can look dated. It all boils down to what you want to spend and what areas you want to spend it on.