Cost of Ownership: Determining the Lifetime Value and ROI of a Mini Excavator

Investing in heavy equipment for your business is a big decision, and it's one that requires careful consideration of many various factors. While Return on Investment (ROI) is a critical metric to consider, there's more to determining the lifetime value of a mini excavator than just costs and profits. When you're investing in a machine that will be an integral part of your operations for years to come, it is essential to look beyond the initial purchase price and consider factors such as durability, reliability, and maintenance requirements that may play into future costs and savings.

So, when it comes to buying a new machine for your business, what is the lifetime value of a mini excavator?

The answer might not be a simple one, but in this article, we'll explore the lifetime value of the SANY SY35U mini excavator, examining ownership and operating costs, potential future expenses, and the benefits of choosing a high-quality machine that can meet the demands of your business. Whether you're a seasoned industry professional or a first-time buyer, this comprehensive guide will provide you with the information you need to make an informed decision about your next heavy equipment investment.

Why focus on a SANY SY35U?

Truthfully, the answer is simple. The SY35 is one of our best-selling mini excavators for landscaping, plumbing, agriculture, and more, and general contractors love them too. At an operating weight of 8,499lbs with a 24.4hp Yanmar engine, it's powerful enough for land clearing and excavation yet compact enough for residential and utility work.

Whether you're debating between purchasing or renting an SY35U or simply want to learn more about the ROI of mini excavators, this article is a must-read!

**Disclaimer: The information in this article is subject to change. All prices are based on current pricing and availability and are true as of June 13, 2023. For updated prices and information, please contact us today.**

First and foremost is the cost of your machine itself. If you’re purchasing a mini excavator, odds are, you’re looking at all the options. Even if you’ve settled for something brand-specific in the past, new technology and advancements might mean that another brand that you haven't used before will best serve you and your needs. Weighing the features, benefits, prices, services, and other must-haves is critical to ensuring you choose the machine that best fits your needs.

Benefits to buying SANY:

Once you’ve found the machine for you, the ticket price is the most obvious cost to add to your list of $.

When buying a SANY machine, you can expect the following approximate prices for your equipment:

With SANY machines, you know you'll have a 5-year, 5000-hour warranty when you buy a new machine from an authorized dealer. Depending on the brand of your excavator, you’ll have the option of purchasing an extended warranty if your standard manufacturer warranty is short. However, it's important to note that the extended warranty will almost always be limited compared to a manufacturer's warranty.

Particularly for brands that limit their standard warranty to 2-3 years or 2,000-3,000 hours, purchasing an extended warranty could give you peace of mind and protect yourself in case any large warranty claims should be needed in the future. However, you’ll have peace of mind right off the bat if you purchase a SANY as their warranty comes standard as a 5-year, 5000-hour warranty. No need to purchase an extended warranty.

Benefits of buying SANY:

If you plan on financing your machine, it’s important to consider interest. We’re living in a tough economy right now. Interest rates can be unexpected and change intermittently, meaning it’s important to factor in the current industry standard for interest before buying.

Machine Tax Per Year:

Insurance:

Mini Excavator Operating Costs

Although ownership costs are the main price points buyers consider when deciding on a new machine, operating costs also come into play when determining ROI and the lifetime value of your mini excavator.

Think about it this way.

When you price out a job for a client, you’re thinking about the cost of:

These costs are necessary for you to understand when charging someone for excavation work, but it’s also important information in understanding the overall lifetime value of your machine. Taking these itemized details, we can expand upon their potential variations and help you determine the overall cost of ownership for your machine.

Not surprisingly, fuel is a large cost when running heavy equipment. Of course, the fuel consumption rate on your machine is going to differ based on make, model, type of work, etc. Since most operators won’t use their mini excavator 8 hours a day, 5 days a week, 12 months a year, we have based our calculations on utilizing a machine for 4 hours a day, 5 days a week, 8 months out of the year (since most don’t use their mini over the winter months), which adds up to 700 hours per year.

The type of attachment you run is also going to impact the level of fuel consumption. Since digging is the most typical use case for excavators, buckets are going to be the baseline for any attachment. More fuel-consuming attachments, such as mulching heads, may eat up more fuel than the typical bucket attachment because it makes the machine work harder.

Your machine’s fuel tank is designed to last an average of 8 hours. If your projects consist of typical excavation work in an average terrain and your tank is a 15-gallon tank, that 15 gallons of fuel should last you around 8 hours. Multiply that tank size by the current price of fuel, and that will help you understand the price of fuel in running your mini excavator for 8 hours.

The SANY SY35U fuel tank capacity is 10.6 gal, meaning you should anticipate 10.6 x $fuel cost per gallon = cost of fuel per typical 8 hours of running your excavator.

At the time this blog article was written, the U.S. national average price for diesel was $3.797. So, to work an average day with a SANY SY35U, you’d expect to pay 10.6Gal x $3.797 = $40.25 per 8 hours in fuel costs.

If you only utilize your mini excavator for 4 hours each day, you can anticipate $ 20.126 in fuel costs per day or about $5.03 per hour.

Daily routine maintenance is key to saving on future repairs and breakdowns. As with your car or any other vehicle, if you take good care of your machine, it will be able to put in more work for you for a longer period. Plus, the machine's maintenance cost is minimal compared to component replacements and repair work.

One way to keep your machine healthy is with daily lubrication for all fittings on the machine. A good rule of thumb to follow for your SANY SY35U is to utilize 2 pumps per fitting every 10 hours – or 1 tube of grease per normal day of work. Keep up with your daily lubrication, and your machine will keep up with you!

The machine and its consumables aren’t the only things to consider when looking at the overall expenses of a mini excavator. If you have employees who run the equipment for you, thinking about the operator’s salary can also be helpful in determining the ROI of buying a new SANY SY35U. You know what you pay your employees hourly, so calculating this cost should be as easy as looking at your books or talking with HR.

ROUTINE MAINTENANCE COSTS

Similar to your daily lubrication costs, oil changes are just a part of owning a piece of heavy equipment. The best rule of thumb in terms of oil changes is to follow the owner’s manual. Oftentimes, sending in oil samples to your dealer will be part of your manufacturer-recommended warranty work as well. Maintaining the manufacturer-recommended service intervals will ensure you won’t void your warranty and will help you keep your machine up and running at peak performance.

Maintaining appropriate service intervals is also crucial to upkeeping your warranty. You can find service interval instructions in your owner’s manual as different intervals apply to different makes of machines.

SANY America makes servicing your excavator easy. Not only does the 5-year, 5000-hour warranty enable you to have peace of mind and trust in your service provider, but they also create service kits that make your service intervals seamless and straightforward.

***Everything written in this blog is true for Ironheads Heavy Equipment at the time of publishing. We retain the right to change information at any time. For current warranty and service recommendations and instructions, please refer to your owner’s manual or call your dealer. ***

The consumables (ground-engaging equipment) on your excavator are critical to the performance of your machine and will impact productivity on your job sites. Ground-engaging equipment such as your cutting edge/blade/bucket teeth can be heavily affected by how you maintain your machine. Rock and sandy conditions will wear your consumables more quickly, and mud buildup on your bucket will diminish fuel efficiency.

Because the cost of consumables can be high, ensuring you are using the correct type of attachment for your job can help save you time and money. For example, if you encounter hefty amounts of rock or cement on your job site, you might be better off utilizing a hydraulic breaker (or hammer) attachment. While it might be more expensive initially, it will also get the job done faster and extend the life of your machine without overhauling the hydraulics like a bucket might.

An expense you might not think about upfront is the cost of replacement rubber tracks for your SANY Sy35U mini excavator. Just like the tires on your car, tracks must be replaced after a certain number of hours. Typically, 2500 hours is the average lifespan on a track. However, if you are turning a lot or working on rocks and jagged ground compared to smooth or softer surfaces, the lifespan of your tracks may lessen. All things to consider when planning for your future additional expenses.

The killer of rubber is weather. Heat can cause “heat cracks” in rubber tracks, drying them out in a manner like a dry-rotted tire. To maximize the lifespan of your rubber tracks, do what you can to keep them out of the weather. Whether that be storing your excavator in a barn or under a shaded cover, keeping your rubber tracks cooled as much as possible – especially in the hot summer months – is key.

Another tip for prolonging the life of your tracks is to keep proper track tension and be careful on the terrain you are running. Checking your track tension weekly is a great rule of thumb to keep your machine healthy. Especially during transitional seasons with cold nights and hot afternoons, the rubber can expand and lose some of its tension.

Regardless, the best rule of thumb to ensure the health of your tracks is to follow the owner’s manual. However, if (or when) you do need a new set of tracks, you can get a set of SANY SY35U rubber tracks for approximately $2450.

Unfortunately, breakdowns are just a part of business when working with machinery or any kind. Planning for the costs associated can help you best calculate the ROI on your new SANY SY35U.

The benefit of buying a SANY SY35U in comparison to other brands is that, outside of typical wear and tear parts, all your components are covered under a 5-year, 5000-hour warranty. Other brands that only offer 2-year, 2000-hour warranties will require you to pay for any broken or damaged parts after that warranty runs out, and some of these parts can be extremely expensive. For example, if you are 4 years into your warranty on another brand machine and your hydraulic pump goes out, you will have to replace this component at a huge expense to you. If you buy a SANY machine and the same situation occurs, you can rest assured that your new pump will come at no additional cost to you. In a similar vein, starters and alternators are infamous for going out on all brands of excavators. With the SANY warranty, you will be covered, whereas you’ll likely have to pay an additional fee with another OEM machine.

While standard warranties cover you for all your main expenses, wear and tear parts that aren’t covered under standard warranties can break and sometimes even be quite expensive to replace. Windows can break on job sites, tracks (typically) need to be replaced in 2500 hours, mirrors can snap with accidental damage, and bushings and seals wear down over time. All of these wear-and-tear parts are going to have to be replaced to avoid elongated downtime, and the expenses associated with those parts are a critical point to consider when deciding “What is the best mini excavator for me?”

To help you evaluate the difference in parts costs between brands, we’ve highlighted price differences between some commonly replaced parts below.

**Please note that these costs are true at the time of publishing but are subject to change.**

Resale Value of an SY35U Mini Excavator

At Ironheads Heavy Equipment, we understand that you want to get the most out of your investment, which is why we back machines with durability and longevity in mind. SANY machines are built to last, and with proper maintenance and care, they can retain their value for years to come.

Factors that contribute to the resale value of a SANY SY35U mini excavator include:

In addition, SANY excavators are known for their versatility and compatibility with various attachments, making them an excellent investment for any construction business. Whether you're looking to upgrade your fleet or sell your machine down the road, choosing a SANY excavator ensures that you'll have a reliable and profitable asset in your arsenal.

Calculating the Total ROI of your SANY SY35U Mini Excavator

Overall, calculating the total ROI of your mini excavator is up to you. On average, most typical contractors won’t be using their mini excavator 8 hours a day, 5 days a week, 12 months a year. So with that in mind, we’ve built a calculated estimate for the average contractor based on:

However, a rough estimate of costs can be found below, not including the cost of labor, oil changes, storage costs, or any additional fees you might have with job sites:

In total, your cost of ownership between the fixed costs and variable costs would be $83,514.

Broken down per hour over the course of 3500 hours, your cost of ownership would add up to only $23.86 per hour over the course of 5 years.

However, that doesn’t even account for the resale, or residual, value of the machine once you’re ready to sell it. Of course, operators and heavy equipment owners all utilize their equipment to different degrees and in different ways. Some people run their machine into the ground for years and years before buying a new excavator. Others, like many rental houses, like to use it for a couple years, resell it, and buy a new machine. All different factors, like the age of the machine, machine configuration, hour meter reading, condition, and the current market, play into the resale value of your mini excavator.

In this example, however, I am considering an average contractor who is utilizing their machine for 3500 hours over the course of 5 years and reselling it afterward in a healthy used heavy equipment market.

Your residual value will likely be between $20,000-25,000 at the end of a 5-year period when using your machine for 700 hours per year. Naturally, if you use your machine more than 3500 hours in 5 years, say, 5000 hours, your cost of ownership per hour will decrease, but so will your residual value when reselling that machine at the end of 5 years. At the same time, if you use your SY35U less than 3500 hours in 5 years, say 2000 hours, your residual value will likely be increased, but so will the cost of ownership per hour for the machine. I’ve outlined a rough estimate for a machine that has been resold in a healthy used equipment market in the table below:

When you account for your potential resale value of $25,000, your SANY SY35U mini excavator would cost you only…

$16.62 per hour.

(Mic Drop.)

Concluding Thoughts

Ultimately, the ROI and lifetime value of your SANY SY35U mini excavator will depend on a variety of factors, including usage, maintenance, and operating costs. While the investment may seem significant, it's important to consider the long-term benefits that come with owning a SANY machine. By choosing a reliable brand like SANY and partnering with a trusted service provider like Ironheads Heavy Equipment, you can ensure that your machine is well-maintained and performing at its best for years to come.

The most important part in purchasing a new mini excavator isn’t the brand, it isn’t the price tag.

It’s the parts availability and service provider responsible for keeping you rolling at peak performance.

Time is money, and that’s far too precious a resource to waste. With our vast inventory of parts kept in stock and team of expert technicians, we're equipped to handle any issue that may arise, minimizing your downtime and maximizing your productivity.

At Ironheads Heavy Equipment, we're dedicated to providing our customers with the support and resources they need to succeed, and we're confident that our commitment to excellence will help you achieve your business goals.

**Disclaimer: The information in this article is subject to change. All prices are based on current pricing and availability and are true as of June 13, 2023. For updated prices and information, please contact us here.**

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***All specs and lead times are true at the time of publication in January 2023***

Follow along as one small business owner and excavator operator shares his story and explains how he gets the job done day-in and day-out in his SANY SY35 mini excavator.

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The 8,499lb mini excavator is one of the most highly demanded mini excavators on our lot. These workhorse machines are the perfect fit for jobs with the tightest quarters and nimblest of needs!

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