It’s a question every construction company has faced, when to buy or rent heavy construction equipment? Perhaps you have some big contracts in the near future, or you are expanding the capabilities of your company. Maybe you just need to replace some of your current equipment with newer models, so how do you decide when to buy equipment or just rent?
There are pros and cons to both renting and buying heavy construction equipment. Here are some key things to consider:
Your Current Financial Situation
This is the obvious factor to consider, do you currently have the capital to buy new (or used) equipment, or is renting the better option for now? Of course, the upfront cost of purchasing equipment is much higher, but it is important to project your costs over several months or years. The cost of renting can add up quickly, and over a longer period can end up costing you more. Purchasing equipment also enables you to recoup some of that upfront cost when you sell it.
Length of the Project
Project length or project frequency can be a major deciding factor of when to buy or rent heavy construction equipment. For short-term infrequent projects, renting may make more sense. One risk to consider, is that machine going to be used for the entire time it is rented? It doesn’t make sense to pay a rental fee on a machine that is not generating revenue. If you have a long-term project, or many smaller ones on the horizon, purchasing equipment makes more financial sense.
Cost of Ownership vs Cost of Renting
It is important to consider all the costs before making a major financial commitment. With ownership comes maintenance and operating costs, insurance and other fees. Renting is generally an all-inclusive cost, minus the cost of fuel. Keep in mind, the rental company has to turn a profit, and your rental fees will include the purchase price and the cost of ownership marked-up with a profit margin. You will typically have to pay to transport the machine to and from the rental yard as well, for as many times as you rent it.
Equipment Availability and Usage
The biggest advantage of owning your equipment is that it is available to you 24/7. You can react quickly to unexpected changes in a project’s scope or take advantage of last-minute emergency jobs.
Handlers Equipment is your one-stop-shop for construction equipment purchases or rentals. If you have questions about when to buy or rent heavy construction equipment, we encourage you to visit Handlers Equipment today and speak to one of our equipment experts!