Should You Buy or Rent Construction Equipment for Your Business?
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If you’re a contractor, the quality of your work depends on the quality of the construction equipment you use.
But even if you have the best equipment on the market, you’ll still have a choice to make: should you buy the equipment or rent it?
There are pros and cons to both methods. Here’s what you should know to make the best decision for your business!
Advantages of Buying Heavy Machines
The most obvious advantage of buying your equipment is that it’s yours.
You have total control over when you’re using it, how you’re using it, and why you’re using it. If you’re leasing equipment, you may have to base the length of the lease around what the provider allows. Basically, you have to work around their guidelines which leaves you in less control of a crucial part of your work.
But when you own the equipment outright, you don’t have to worry about finding a contract that will suit your needs. You will have access to the equipment you own 24/7. So if you have a need for constant use, buying will almost always be your best choice!
Lower Cost in the Long Run
Renting is fine for short periods of time, but it may not be ideal if you need the equipment indefinitely. Although you have the higher upfront investment when you’re buying your equipment, it usually ends up being more affordable compared to renting in the long term. Often, renting costs you three times more than buying!
Because the equipment is yours, you also have the option of selling it someday to make back some of the costs. Of course, you will still most likely take a loss on the equipment, but you’ll have nothing to gain from renting.
Even with the higher upfront cost, if you’re working with the right machinery provider, they should offer financing plans that fit your needs. Depending on your financial situation, you may also be able to take out a loan to help you.
Speaking of loans—if you end up needing a business loan for any reason, you can often use your equipment as collateral. In this way, buying your machinery can actually open up doors for your business and accelerate growth.
The needs of your business may change. If the equipment you’ve bought suddenly becomes obsolete for some reason, you will still have the option of selling it or renting it out to others. This is an advantage over renting.
If you’re renting and suddenly the equipment you have is no longer serving you, you will usually have to continue paying for it until you’ve fulfilled the obligations of your contract.
Another perk to equipment ownership is the ability to customize the equipment with your branding through wraps and graphics. This way, your equipment becomes a mobile advertisement for your business which can give you a return on investment.
There also may be ways to customize the functions of certain pieces of equipment if they no longer serve your needs the way they previously did.
Advantages of Heavy Machine Rentals
Lower Upfront Investment
While equipment is essential and expensive, the upfront cost of choosing to buy construction equipment can be astronomical. Until the day comes when you might sell that equipment, your capital is tied up in that investment. Not being able to use that money in other areas could harm your business if unexpected costs arise or you have an especially hard year.
Renting also allows you to experience tax breaks. When you purchase your equipment, you usually owe taxes at a depreciated rate over time. On the other hand, rental expenses are usually deductible. This can definitely help your business’s budget!
When you choose to rent, you are making less of a commitment with the equipment upfront. If you’re a bit of a commitment-phobe especially when it comes to your business’s finite capital, this is great news. Renting comes with limited risk and allows you to test out a piece of equipment.
If after renting you decide that the equipment is right for you, you can always purchase it. On the other hand, if you realize the equipment is not the right fit and you realize you’d rather invest in a different piece of equipment, you won’t lose as much as you would if you had purchased it right away.
Lower Cost for Overhead
Storing heavy-duty equipment can be a real headache in some situations. You have to ensure you have plenty of overhead which costs more money. Whether you need short-term or long-term storage and transportation, the cost adds up. If you’re renting your equipment, you won’t have to deal with these logistics as the provider will usually handle them for you.
Choose Based on Frequency of Use
One important thing to consider when choosing whether you will lease or buy equipment is how frequently you will use the equipment. If you’re just needing equipment for a short-term job or maybe long-term but not on a regular basis, you should maybe opt for a heavy machine rental.
That being said, there is another option if you want to buy construction equipment but you don’t end up using it frequently. You can rent it out when you aren’t using it. This way, you still have control over the equipment but you’re actually making money off of it. Of course, there are also logistics to work out with this option when it comes to scheduling, but if you’ve weighed all the pros and cons, it can be a great option!
Buy Construction Equipment Based on Your Business’s Needs
With all of this in mind, you should be able to make an informed decision on whether to rent or buy the next time your business is in need of heavy-duty equipment. For best-in-class equipment you can rely on, purchase from Machinery Partner! We offer realistic financing plans that protect your bottom line. Because we sell directly from the manufacturer, most of our equipment is already 25% cheaper than a new machine purchased from a dealer.
You can check out our complete range of machinery and compare our screeners for topsoil which are among our most popular products. If you have any questions, you can always get in touch with us and we will be happy to help. We want to make sure that you buy the construction equipment that’s best for your needs!
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