When thinking about adding a new piece of construction equipment to your fleet, you are likely wondering if this is an affordable purchase or if it’s something you’re better off renting. Your bottom line will be affected by making big-ticket purchases such as heavy construction equipment, so it is crucial to consider this decision carefully.
To help with this decision, here is a guide on the options to weigh when choosing between buying vs. renting construction equipment:
Think About Your Construction Equipment Needs
Generally speaking, if you do not use a piece of construction equipment more than 60 to 70 percent of the time, renting is the better option. If your operation rate surpasses that threshold, you may want to consider purchasing or leasing the equipment instead. It’s important to consider your future workload and plans for growth because renting a machine will eventually be more expensive than buying it.
You should also review the cost consequences if you are unable to obtain the appropriate equipment available immediately. If your service trucks cannot perform a field repair without generator power, essentially idling and delaying the job schedule, it makes sense to rent your equipment. Also, if the construction equipment is immediately available for rent, this will be a cost-effective option.
Renting also allows you to test new equipment and make comparisons before putting down the money to buy a machine. You’ll make informed decisions when upgrading to new technology, and you can bid more competitively for a job since the equipment will increase productivity, reduce fuel costs, and enhance overall quality. Renting is a cost-effective way to test equipment and estimate the efficiencies it will bring to your business as opposed to purchasing.
Factor in Tax Incentives or Capital Expenditures
Financial and bookkeeping factors will also affect your decision to buy or rent. You can bill rental expenses back to the customer or deduct them as a business expense to save on costs.
However, if you purchase equipment, it is a capital expense that you will need to treat accordingly during tax season.
Review Interest Rates
Groff Tractor offers business owners affordable financing to make buying the equipment more attractive. They can also provide zero percent financing over a specific period and on equipment purchases in certain sizes.
Consider Depreciation or Resale Value
Aside from the cost-comparison of buying or renting equipment, it’s vital to research different brands and models available. Some machines, like CASE Construction Equipment, retain their value more effectively than others in the same category, making them more profitable when you sell them in the future.
If you prefer cycling in new equipment over a certain period, choosing a suitable machine based on annual depreciation and performance may impact your decision. Researching used equipment is always an option as well.
Additionally, there are more expenses involved when purchasing equipment. Maintenance costs should be included in your budget when purchasing – maintenance is not your responsibility when renting.
Rent Heavy Construction Equipment at Groff Tractor
Depending on your situation, renting may end up as the best option. In this case, you will need a reputable rental company like Groff Tractor to source your equipment. Regardless if you choose to rent or purchase your machine, carefully evaluating these factors will help you make the most cost-effective decision.
Groff Tractor and Equipment is one of the most trusted heavy equipment dealers in Pennsylvania. We can help you get the job done, large or small, with our wide range of heavy construction equipment. Contact us today for sales, rental, and other services!