Hydraulic systems by nature are quite robust and reliable. However all machinery eventually breaks down. If your system has been running for more than nine years, you’re probably wondering if it’s worth fixing? Or is it best to invest in a new one?   

We come across these situations all the time – and of course it’s not black and white.  While the final decision depends on your specific situation, and the cost of replacing components, there are some key financial and practical points to consider—especially from an accounting perspective. The old rule of thumb used to be that once the repair costs goes beyond 2/3 of the price of a new unit, it’s best to replace with a new one. 

However, there are other factors to consider.

What the Numbers Say

Most hydraulic systems are considered to have a working life of around 10 years. For accounting and tax purposes, the Australian Tax Office (ATO) lets businesses claim depreciation over the useful life of the equipment. If your hydraulic system is nine or more years old, chances are it’s almost fully depreciated, meaning it's worth little to nothing on paper-even if it’s still limping along in real life.

Repairing the Old System

Fixing an older system might seem cheaper upfront, and the cost of repairs can usually be claimed as an expense in your P&L. However, if repairs are becoming more frequent, i.e. every six months, and result in unexpected downtime, you're really just delaying the inevitable—and costing your business more in lost productivity. You may repair an old HPU for less than half the cost of a new unit, however you’re still left with a unit that’s more than ten years old.

That said, there are many occasions where it’s a wise decision to repair, or replace worn components. Some hydraulic units can go for many years following a repair. Particularly if they’re from a leading manufacturer. It’s not uncommon to get another 5-10 years of production, without any trouble.  

Replacing the System

A new hydraulic system is a capital investment, but from an accounting view, it resets the depreciation clock. If you’re a small business (with annual turnover under $10 million), you may even qualify for the instant asset write-off—meaning you can potentially claim the full cost of the new system straight away, depending on the current tax rules. This can provide a strong incentive to upgrade sooner rather than later.

The Practical Side

Beyond the numbers, think about efficiency and reliability. Older systems are more prone to breakdowns, harder to get parts for, and often cost more to run. Newer systems are typically more energy-efficient, safer, and designed with better technology - which can save you money in the long run.

Final Thought

If your hydraulic system is over 9 years old and has already given you solid service, it’s worth asking: are the ongoing repairs really worth it? You need to weigh up the tax benefits, and the productivity benefits. Replacing it may be the smarter choice for your business. 

Because we deal with hydraulics, day in-day out, we know when it’s best to repair, and best to replace.  We can advise you on the cheapest way forward. Our Technicians will give you a breakdown of repair costs, including components, and an assessment on how long your unit is likely to run, problem free. If we think it’s not worth repairing – we’ll tell you.

Call on 9397 0044, and we can have one of our Technicians on site within 24 hours,

Our mission is to keep your production going 24/7 – it’s all about More Up-Time.