Equipment Rental vs. Equipment Purchases: When to Buy
Acquiring lift equipment is a major decision that requires careful consideration, in part because there are multiple good options for doing so. For example, equipment rental is a viable and low-cost option for many businesses looking to add to their job capabilities. However, for other businesses, or for certain types of equipment, buying the machinery outright makes the most sense. While the pros and cons of each option must be considered before a business commits to a course of action, here are a few reasons for buying lift equipment instead of pursuing equipment rental.
Consider buying lift equipment if your usage ratio exceeds 60 percent.
Often, equipment rental makes the most sense if businesses are using the equipment less than 60 percent of the time. It is at that level of usage that the costs of renting are less than the costs of ownership of a piece of equipment. If your usage ratio exceeds 60 percent (and especially if it exceeds 65 percent), you may want to consider purchasing construction equipment.
Though the costs of ownership will include long-term expenses (i.e. Maintenance, repairs, transportation, and storage), at that high rate of usage, you will still likely pay less over the long term than if you rented the same piece of equipment. Just make sure that your usage will remain at or above 60 percent long term, rather than being a response to a temporary spike in certain types of jobs. That way, you will avoid any lulls in usage that would make owning a piece of equipment too expensive to justify.
Invest in the purchase of versatile lift equipment.
Certain types of lift equipment can be used across many different types of jobs, unlike more specialized pieces of machinery that only do one or two specific tasks. Examples of versatile machinery include excavators, forklifts, and loaders. These pieces of equipment often make smart investments because they can be used in many different capacities in many different types of projects.
As a result, you are far more likely to get the type of frequent usage out of them that you need to make the costs of ownership worthwhile. These versatile pieces of equipment are also much less likely to sit idle during certain project slumps, because while one type of project may slow down, chances are you will still be able to utilize these pieces of machinery in your other projects.
Invest in lift equipment if you can handle their maintenance and repairs.
Fleet management can be a difficult aspect of equipment ownership for some businesses to handle. Some companies even choose to create separate branches or divisions dedicated to keeping their construction equipment safely stored, transported, maintained and repaired, due to its complexity and time consuming nature.
As a result, if you lack the time and resources to effectively maintain your fleet, you may be better off choosing equipment rental. However, if you can handle the maintenance and repair of your equipment, purchasing the machinery might be a viable option.
One way to make buying equipment possible is to use a dealer who offers maintenance and repair packages for their equipment. For example, if you are in the market for a new forklift in Oklahoma, consult with forklift dealers in Oklahoma who offer maintenance contracts and skilled technicians who can repair the equipment when needed.
By purchasing equipment from such a forklift service provider (or a service provider for whatever type of machinery you need), you can be more confident in your ability to manage the maintenance and repair of the machinery over the long term. Just make sure that the storage and transportation aspects of your fleet management are also well in hand, in order to ensure that you can effectively manage every aspect of owning your own equipment.
Consider the flexibility of owning lift equipment.
Flexibility can be a valuable resource when taking on projects or dealing with emergencies. Having immediate access to the equipment you need can make the difference between landing a contract and losing it, between dealing effectively with a project emergency and losing time and money, and between finishing a job on time and missing a deadline.
Usually, you can quickly obtain the equipment you need through equipment rental. However, owning your own equipment guarantees the availability of this machinery when you need it, and allows you to move it where necessary at a moment’s notice. For this reason, you may wish to consider buying your construction equipment rather than renting it if flexibility and immediate access are of primary importance to you.
Buy instead of rent once you are sure you need the equipment.
One of the most fundamental rules when it comes to purchasing equipment (Besides making sure you have the resources to pay for it) is making sure the equipment you purchase will meet your needs. Otherwise, you are unlikely to get the level of usage and the return on investment necessary to make the expenditure worth it.
As a result, it is a good idea to wait until you are sure you need the equipment to purchase it. Often, this can mean using equipment rental options to test out pieces of machinery you think you might want to buy. Once you have used the equipment in some of your projects and are convinced that it will meet your needs, you can go ahead and purchase it with the confidence that it will serve your needs well.
Purchasing instead of renting lift equipment can be the right choice for many businesses. It often depends upon the type of machinery being purchased, the financial situation of the company buying the equipment, and the needs of the business. If you are using equipment frequently, need a versatile piece of equipment, can handle maintenance and repairs, want flexibility, and know you the equipment meets your needs, it may make sense in buy instead of rent.
However, if you find that used or rental equipment are preferable for your circumstances, we can also meet your needs here at Darr. From buying new to buying used to renting, we provide high quality equipment and access to comprehensive maintenance and repair services to keep your fleet up and running over the long term.