When it comes to heavy equipment, wondering whether to purchase or rent becomes a key issue. Maybe you need a specific type of equipment for a certain job, or you need new equipment for your business upstart, business growth, or a DIY project–either way, you must decide whether to buy or rent. No matter what your goals are, there are five primary considerations that factor into your decision to buy or rent.
- Financial stance. It’s important not to overlook your financial situation, so ask yourself, where do you stand financially? Purchasing quality equipment is an investment, but you need to ensure it is an investment you can afford. Break out those cost savings calculators and budget sheets, and don’t neglect this important part of your decision.
- Cost of ownership. Next, you’ll need to look at the costs of upkeep, government licensing, equipment delivery and insurance. All these things can become very expensive on heavy equipment, making it imperative that you account for all the associated costs. Additionally, expenses like gas will apply to both owners and renters. An important note for U.S. equipment owners: you may be able to avoid paying a capital gains tax when buying and/or selling equipment for your business.
- Duration of the project. Consider whether this is a one-time job, requiring a specialized piece of equipment, or if this is going to be a recurring job or project where a specific piece of heavy equipment is going to be necessary every time? For short term jobs, renting makes more sense. But for longer projects, owning is a better option as rental costs can quickly add up.
- Availability: 24/7. If the scope of a project alters in any way, it can cost your business a lot of money, and you may pay the price when dealing with rentals. An owned piece of equipment means availability is not an issue, and you can be flexible with schedule changes and time. With renting, you risk the rental company not having the piece of equipment you need to get the job done.
- Inventory Control. When you own the equipment, time is on your side. You ensure availability, even if the project runs longer than planned, and you can also control buying and selling equipment based on the company’s needs.
Ultimately, the decision to buy or rent is entirely dependent upon your company’s situation. Take the time necessary to fully evaluate all of the factors and analyze your business’s needs. The final decision will depend on how you can complete the work you’re performing in the most efficient and affordable manner possible, and with these factors in mind, you have all you need to make a well-informed decision.
Do you have any other things to consider before buying or renting? Share with us in the comments below!