The hidden cost of keeping old equipment, and when to replace it

“It still works.” Four words that keep a lot of tired equipment in service long past its best. And sometimes that’s the right call — a well-maintained older machine can be the most cost-effective asset in the business. But “still works” can also mean “works four days out of five, slowly, with a technician on speed dial”. The difference is worth measuring.

What does old equipment really cost?

List every way the ageing machine costs you money each month:

Cost	How to measure it
Repairs and parts	Invoices over the last 6–12 months, averaged
Call-out fees	Technician visits, especially after-hours
Downtime — people	Idle staff hours × hourly cost
Downtime — jobs	Profit on jobs delayed, rescheduled or lost
Slower output	Extra hours to produce the same volume
Running costs	Extra energy, fuel, consumables versus newer models
Declined work	Jobs you can’t quote because the machine can’t do them
Quality issues	Rework, waste, returns

Most owners track the first line and guess the rest. The rest is usually bigger.

How do I measure downtime properly?

Keep a simple log for four to eight weeks:

• date and time of each breakdown or slowdown;
• how long until it was working again;
• who was standing around, and for how long;
• which jobs were delayed or lost.

Then price it. Staff time is easy: hours × hourly cost. Lost jobs need a profit estimate. Add overtime to catch up and any penalties for late delivery. It’s not unusual for downtime to cost several times more than the repair bill that caused it.

When does replacing beat repairing?

Compare two figures over the same period:

• Keeping it: your monthly cost from the table × months you’d keep going.
• Replacing it: the total dollar cost of financing a replacement over the same period, minus any trade-in or sale value.

If keeping it costs more, replacement is the cheaper option — even before you count the new machine’s extra capacity. Our cost-of-waiting calculator lets you enter the monthly cost of making do alongside the finance cost.

Illustrative example: the commercial laundry

Illustrative only — invented figures.

A commercial laundry servicing hotels has an industrial dryer that breaks down every couple of weeks. The owner logs six weeks of data:

• repairs and call-outs: about $1,400 a month;
• staff idle or on overtime to catch up: about $1,900 a month;
• late-delivery credits to two hotel clients: about $700 a month;
• extra gas use compared with a current model: about $300 a month.

Total: around $4,300 a month. A replacement costs $68,000. Over a year, keeping the old dryer costs about $51,600 — and one hotel client has warned it will look elsewhere if deliveries keep slipping. Financing a replacement costs a fraction of that year of breakdowns and protects the contract.

Recognise that pattern? See if your business qualifies to replace the machine before the next breakdown.

Should I buy new or used?

Both can work. A quality second-hand unit may remove most of the downtime at a lower price. The ATO confirms the instant asset write-off can apply to new and second-hand assets under the $20,000 threshold for eligible businesses, and the threshold is permanent from 1 July 2026. Larger items go into the small business pool. See instant asset write-off 2026.

business.gov.au also notes the trade-offs between leasing and buying: leasing can make upgrades easier; buying gives ownership and the freedom to modify.

When should I schedule the replacement?

Ideally in your quiet period, so installation and training don’t collide with peak demand. See quiet-season upgrades. But if breakdowns are already costing you peak-season jobs, waiting for the quiet season may cost more than replacing now. For the wider decision, read buy equipment now or wait.

What signs say replace now rather than next season?

Some warning signs mean the cost of waiting is about to jump:

• Breakdowns are getting closer together. Two a month becoming one a week is a curve, not a line.
• Parts are hard to get. When the manufacturer stops supporting a model, every repair takes longer.
• A key customer has complained. Late deliveries or quality issues put the relationship at risk.
• Safety is in question. A machine that’s becoming unsafe needs replacing regardless of the numbers.
• Your peak season is coming. Breakdowns in peak cost several times what they cost in the quiet months.

If two or more apply, the decision is less about whether to replace and more about how quickly you can. That’s where having funding lined up early helps.

Can I keep the old machine as a backup?

Sometimes that’s the best of both worlds. A replaced machine that still runs can cover peak overflow or step in during servicing of the new one. Weigh that value against its sale price, the space it takes and the cost of keeping it serviceable. If it’s only going to gather dust, sell it and put the proceeds towards the new unit.

Stop paying for the old machine twice

If your log shows the old gear costing more every month than a replacement would, it’s time to act. Send us a quick enquiry — it takes about a minute and there’s no credit check when you ask. Your details aren’t sent out to a bunch of lenders; a lending specialist looks at your situation and calls you. Please tell us accurately what you’re replacing, the cost and your trading position so we can find the right fit first time.