How To Decide Whether To Buy or Rent Construction Equipment

How To Decide Whether To Buy or Rent Construction Equipment

Many factors are involved when deciding whether to buy or rent construction equipment for your business. While each decision has different advantages and disadvantages, your choice could depend on your business size, needs, and financial situation. Consider the following circumstances before you make the decision to rent or buy.

Cost & Expenses

If you were to use rental construction machinery, this cost could be billed to you immediately or deducted from an annual business expense—purchasing the equipment is a capital expense that must go on your business taxes. The decision is easy if renting the same excavator for multiple projects surpasses the cost of buying the machine.

However, you must have the current capital to uphold the need to own the equipment. If you were to rent, maintenance and insurance costs would not be a factor for you. If you only plan on using the specific machine for one project, renting is viable because it will cost you less money in the long run.

Equipment Needs

How often do you plan on working with this equipment? Will you use it for a majority of your projects? You may use one machine daily, while another is only used a handful of times out of the year. Be mindful of this when deciding whether to rent or buy construction equipment because it won’t make sense to purchase a machine and lose money if you don’t use it frequently.

Another consideration is how flexible the machine is. Purchasing the equipment might be a good idea if it can perform more than one job function and is highly versatile in multiple settings. Determine if this machine will benefit your needs in the future. If it won’t, then rent it.

Project Length & Frequency

As mentioned above, if you only plan on using the equipment for a short-term job, you should consider renting to save money. However, owning the equipment will benefit you if you have several jobs requiring the same machine. In addition to owning the machine, you may be in the market for a new one and could receive a return on investment by reselling your old equipment.

Other factors that could affect your decision are the amount of space you have in your inventory, interest rates, and accessibility. Decide to rent or buy on a case-by-case basis, depending on the type of machine. You must make smart decisions for your business to further expand on projects and improve customer service.

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Published on September 03, 2022 11:51
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