If you work in the contracting or the construction industries, then you’ve likely already considered whether renting or buying heavy equipment is the right choice for your business.
However, it can be difficult to accurately weigh the costs. It can be hard to understand which option is a better fit for the nature of your company, or even truly evaluate the pros and the cons of heavy equipment rental.
This post is here to help you to make the best possible decision. Make one that won’t leave you in a financial mess.
Keep on reading this post in order to understand the pros and cons of renting machinery for your business. Also, determine whether or not buying your heavy equipment outright is the best fit for you.
We know you’ll be able to sleep much more soundly — and book more jobs — knowing you’ve made an informed decision.
The Pros of Heavy Machinery Rental
There is certainly no shortage of good reasons to consider renting machinery as opposed to buying it.
First of all, you may be able to include the cost of your rental in the overall estimate that you provide to your clients. That means that the consumer will take on part of even all of the fees associated with the rental.
This is because you only need it for their specific job.
You may also be able to deduct the cost of the rental from your taxes, by writing it off as a business expense.
Plus, renting as opposed to buying makes it much easier for you to balance your budget.
This is because you’re not dealing with complicated interest payments and multiple invoices every month. Instead, you just pay the fee for the rental and move on.
In most cases, you won’t need to worry about paying any sort of a penalty fee for an early return on a heavy machine hire. You can use it for as long as you need to. You can set the schedule yourself in order to save more money.
If you’re interested in renting heavy equipment for a longer period of time, look for rental companies that offer better rates for longer rental periods.
Always make sure that you can return the rental equipment without being penalized if the job is finished faster than you anticipated, or if the job gets cancelled altogether.
Finally, we’re big fans of heavy equipment rental because it allows you to test out a piece of machinery that you’d like to buy down the line.
But before you make a huge investment?
You want to be sure that your operators can understand it. Also check that it’s right for your average job sites, and that you feel it performs as advertised.
Rent out as many types of equipment as is possible before you make your final purchasing decision.
The Cons of Renting Heavy Equipment
Of course, heavy equipment rental is not always without its flaws.
Especially if you’re in the market for a longer term rental, you might be surprised to find out that the costs of buying vs. renting are roughly the same.
Additionally, the exact piece of equipment that you’re looking for to complete a job might be tough to find. It could also already have been rented out by someone else.
Make sure that you fully understand the insurance and financial responsibilities surrounding every piece of equipment that you are interested in renting out. You don’t want to be financially responsible for anything that happens to the machinery while you’re using it.
When to Consider Heavy Equipment Rental
If you’re considering renting machinery, then you need to do your research and look at the overall operation of your construction company before you make any final decisions.
Renting is an excellent option if your business either doesn’t have the capital or the need to buy a piece of heavy machinery. For example, maybe you only have the need for a piece of machinery about once a week or even once a month.
Maybe your overall working season is shorter than most companies, meaning that buying heavy equipment doesn’t make much fiscal sense.
Perhaps you’re a younger company, and simply can’t afford to buy heavy equipment. Same goes if you just want to put your capital towards something else.
Finally, you should also consider renting machinery if you suspect that an economic downturn is on its way. Renting as opposed to buying is just one of the many ways that you can protect and prepare your company from the consequences of a recession.
So, what should you look for in a heavy machine rental company?
They offer several financing options, and they make the insurance requirements associated with the rental incredibly clear. Their website is also easy to navigate, and they work to get the equipment to you as soon as is possible.
The Pros of Buying Heavy Equipment
Of course, especially if you work within the construction or contracting industries, you’ve likely considering buying your equipment as opposed to renting it.
Let’s quickly address the pros of making a larger investment, and determine the situations where buying may be the better financial move.
If you own your own equipment, you can use it anytime, anyplace. There are no restrictions on the types of construction sites, the weight of the loads, or even the type of terrain where you can use it. You also don’t have to go through the process of waiting for the piece of equipment you need to become available.
You can use it for as long as you’d like, without the risk of being charged for an extra day if the job runs a bit later than you’d expected.
This can save you money and ensure that you’re able to book more jobs.
This is because you already have the equipment on hand.
In some cases, you may also be able to justify buying heavy equipment because of the tax liabilities you can deduct. You should certainly consider buying equipment if you can afford to buy the machine in full, in cash, and up front. This is because you’ll bypass costly service fees and any interest associated with getting a loan.
The Cons of Buying Heavy Equipment
In some cases, renting machinery will still be the better option for you when compared to buying it outright.
It’s important to evaluate the downside of making a big purchase. Plus, it helps you to fully understand the potential expenses that come with it.
Keep in mind that you’ll need to pay for transportation, upkeep, storage, and repair jobs for your equipment. If you’ve spent most of your money buying the equipment, you likely won’t have much left over. So, if something goes wrong, you’re out of luck.
You may also not be able to make back much of your investment when you decide to sell the piece of equipment towards the end of its life. This is especially true if it becomes severely damaged.
Plus, there are no guarantees that the piece of machinery you’ve invested in will be the top model in the industry for years to come. There are also no guarantees that your construction company will remain profitable enough for you to pay off your interest on the equipment.
With the construction industry generally in decline, these are serious factors to consider.
In general, you should only get into buying construction equipment if you can afford to buy in full, or if you find lower rates of interest. You should also have such a need for the piece of equipment itself — at minimum, 3-5 times a week — that buying it is a true necessity.
Interested in Heavy Equipment Rental?
We hope that this post has helped you to better understand why, more often that not, opting for heavy equipment rental over buying heavy equipment is the right choice for your company.
Not only is renting an excellent financial choice, it also means you’ll have access to a variety of equipment — without having to worry about the upkeep and even the resale value of your equipment.
To connect with the top heavy machine hire companies, spend some time on our website.
Of course, we know that renting machinery is only a small part of your overall business plan and operating expenses. You still need to calculate things like payroll, insurance, raw materials, and much more.
It can be tough to keep it all straight!
When you’re looking for reliable, up-to-the-minute business advice, be sure to check out our blog to make sure you’re always two steps ahead of what’s coming next.