As you manage your construction, at one point or another, you realize that construction equipment requires a significant investment, and you need to mindful of the type of equipment you invest in.
As your projects and client list grow, you’ll eventually need more equipment like cranes, forklifts, jackhammers, and excavators. But, beyond the types of equipment, you’ll need to keep your firm well-equipped to address different client needs and determine the most suitable method of paying for your machines.
By now, you’re probably accustomed to buying, renting, and leasing to offset the costs of ownership or minimize the inconvenience of using pieces of equipment on borrowed time. While all three acquisition routes have their respective pros and cons, you will likely consider the rent-to-own equipment option sooner or later.
Which Method is Better?
Often, when purchasing managers and decision-makers jump into the idea of going for Rent-to-Own (RTO )options, they focus on the fact that they can pay for equipment while using them on the job. A portion of the rental fee can be applied to the purchase of the machine.If you ultimately need to finance the equipment, this approach may help lower the total purchase price.
By opting to lease equipment, you have the advantage of accessing the newest and most advanced machines without a significant investment. Of course, as you approach your term, you can choose to return the equipment, renew your lease agreement or purchase it.
Renting equipment as you need allows more flexibility, although rental rates are typically higher than leasing, and the equipment you need might not always be available when you need it.
Benefits of Leasing
If you want to maximize a possible rent-to-own opportunity, you’ll want to consider the benefits of buying or leasing during the acquisition process. For many, a purchase isn’t practical. On the other hand, leasing construction equipment is an affordable approach due to the flexibility it offers.
Here are a few of the key benefits of leasing construction equipment:
- Leasing helps you improve cash flow – no large lump sum investment required.
- Leasing offers the most technologically advanced machines instead of settling for what you can afford (while opening up the opportunity to get a new model every few years or so).
- Leasing helps avoid depreciation.
- Leasing minimizes the risk of downtime associated with using older equipment
When it comes to acquiring equipment for your construction firm, a rent-to-own option with a lease may be the route that is most flexible and affordable.Groff Tractor is a top supplier of construction machinery and compact utility equipment in Pennsylvania. Our team can help you make informed decisions about the equipment you need and how to invest in it. Get in touch with us today to see how we can help!