Renting v/s Buying Construction Equipment
For every contractor and construction company, one of the biggest as well as expensive decisions to make is whether to rent or to buy the Construction Equipment (CE). Well, there are pros and cons to each of the approach and the buyers are required to make their choice on a case-to-case basis. Making the right choice between renting and buying CE can save you a good deal of money over time, but careless decision can cost you a lot.
Here’s a list of things that you should consider when you’re deciding between renting and buying CE…
When to buy CE?
There is no doubt that buying heavy CE and machinery involve a very big investment, however, if you have thought about it well and have a full-fledged plan of action in hand, then it can help you save money in the long run. Buying CE can be a good decision when…
1. The equipment would be used regularly: If you have a lot of projects in hand for the coming few months or even years, then it definitely makes sense to invest in the heavy CE like backhoe loaders, excavators etc.
2. You can easily afford to store and maintain the new equipment: One of the major challenges with heavy construction equipment is their storage when not in use, but if you have an industrial garage and insurance policy, then buying CE can make more sense and it would be affordable too. Also, if you have enough finances to take care of maintenance costs, then also buying CE can make more sense.
3. Expansion is on your cards: If your company is doing really well, there are many projects lined up and you are even ready to take your business to the next level, then also buying CE makes much more sense as it would give you good return of investment in future.
4. There is no rental equipment company in the vicinity or even in your city: One of the major issues with the heavy CE is getting it to the job site. So, if it is a major hassle to get the equipment you need for the required job at the site, then you would have to lose both money and time in the process to get it. In such a scenario, it is better to buy CE.
When to rent CE?
Not everyone possesses the huge finances to buy the CE. In such cases renting CE can make more sense. Renting CE can be a good decision when…
1. You want to try the equipment before making the final purchase decision: Even if you are in a good position and have the required investment capacity for buying the CE, it is still a great idea to rent the equipment for a spin under real-life work circumstances before taking the final call. This can help you to know about the usability of the equipment at the job site.
2. You need to give an extra boost to the existing fleet during the busy season: If every summer, your work gets doubled but remains stagnant during the other parts of the year, then it makes sense to rent the CE during busy season to supplement the existing fleet. This can help in avoidance of storing and maintaining CE during the slow season.
3. You want to keep your repair and maintenance costs low: Renting CE definitely makes it a lot easier to accurately figure the cost of the equipment into the project estimate, so you are not left on the hook for unexpected maintenance expenses on your CE.
4. You want specialised equipment for a short-term job: Some one-off jobs may need specialised equipment. Here, renting CE may be a smart option. Further, it is better to rent CE rather than buy a new one, especially for projects with duration of less than three years.
In a nutshell
Thus, before you decide whether to rent or buy, you should weigh all the pros and cons of both the approaches carefully as this decision can highly affect your business growth too.