Deciding to buy or rent heavy equipment can be a difficult decision for many company owners in the heavy equipment industry. Whether you have a big contract on the horizon or you simply want to expand your companyâ€™s capabilities to attract more customers, whatever maybe the situation, deciding when to buy equipment or when to rent is certainly not an easy task.
There are pros and cons to both buying and renting, but first it pays to evaluate your companyâ€™s current financial status and your plans for the future. It is vital for you and your organisation to consider which method is going to make your life a whole lot easier. Initial cost is not the only factor when considering and determining which route to go.
Other aspects such as usage, availability and delivery times should be included in the entire decision making process. Your ultimate objective is to achieve your goal more quickly so that you can move ahead efficiently. By carefully analyzing what makes the most sense for your organisation and it project requirements, you can make the smart choice and come to a suitable conclusion.
Of course, finances always remain the most crucial aspect when buying or renting any kind of equipment or machinery. It is a big factor since you have to decide if you currently have the capital to buy the equipment or rent it.
Renting allows you the option of maintaining a steady cash flow during a project, but the cost of renting can add up quickly and cost you more over the entire rental period. However, you should look beyond your current financial situation so that you can project your costs over time, whether itâ€™s over several months or even years. That particularly applies to owning equipment since you can see your return on investment when you go to sell the machinery.
Ownership Cost Versus Renting:
Itâ€™s imperative that you consider the many costs associated with equipment ownership versus the cost of renting equipment. With ownership maintenance costs, itâ€™s your responsibility to keep the equipment in top condition. Meeting environmental standards, operating costs, insurance and other governmental fees or requirements, all cost that comes out of your pocket.
Most costs are inclusive when you rent, but like any company, the rental has to turn into profit. You most likely have to pay for transporting the equipment to and from the rental location each time a rental offers equipment is required. These costs obviously jack up the price to rent, but your exposure to ownership costs are diminished, or are they?
Whether you rent or own equipment, fuel costs are common for these two options and needs to be considered for both. Itâ€™s estimated that about one-third of your total expenses will be associated with the cost f fuel for equipment operation.
Equipment Availability and Usage:
You have to consider the potential risk of a rental company not having a particular machine when needed, if you rent. However, when you own an equipment, itâ€™s available to you 24/7. With ownership, you have the ability to react to expected changes in a project on a job at a moment’s notice.
On the other side of the coin, you may need a specialized piece of equipment for a short term job or for a one-off job, in which case renting may make more sense. The risk you run doing this is unforeseen holds up in the project schedule which may cost you more money over time.
Whether you opt to rent or buy equipment, both have their own unique benefits and challenges. The most important factor in your decision is to weigh your company’s needs and goals to determine which route is the best for you. You can get in touch with our professionals if youâ€™re unable to make a decision.