Some contractors buy the heavy equipment they need at the job site, others rent the heavy equipment they need. Contractors know there are opportunities in renting construction equipment as opposed to buying it. Others see the benefits of buying heavy equipment.
Regardless of what you do as a company, buy or rent your heavy equipment, you need to determine what is going to work best for you. The real answer lies in determining your specific needs for each project. Strut Hanger Pro, your source for duct hangers and custom brackets, offers considerations when deciding whether to rent or buy heavy equipment.
Low Utilization
An underused dump truck is an asset that is going to cost you money when you aren’t using it. Industry experts report that if a projected utilization rate exceeds 65 percent, then buying said piece of equipment is recommended. If the utilization rate is expected to be under 40 percent, then it makes better sense to rent the equipment.
Lost Opportunities
Heavy equipment is quite expensive. You have to ask yourself if buying heavy equipment will cause you to lose out on other opportunities. For example, if you miss an opportunity to upgrade an outdated communications system or a great marketing opportunity because you spent too much money on equipment, you might want to rethink your decision.
Renting heavy equipment will free up capital you can utilize in other ways. So sometimes this makes good business sense.
Repairs and Maintenance Costs
When you own heavy equipment, they come with maintenance and repair costs. It would be really nice if that $100,000 dump truck ran perfectly for the next 20 years, but that isn’t going to happen. So when considering whether to rent or buy, don’t forget to factor in maintenance and repair costs. It might make the difference in your decision to rent or buy.
You also want to take into consideration other costs associated with owning heavy equipment. For example, equipment not properly stored can develop performance issues. You don’t want your expensive equipment parked outside exposed to the elements. So you need to factor in storage costs. Depending on the size of the equipment, this can be rather expensive.
Logistics is another consideration. The cost of moving heavy equipment from one job site to another could add up real fast and be a problem. Again, it is something you need to think about when making the decision to rent or own.
Depreciation
When you own a piece of heavy equipment, it will depreciate over time. This will make it hard to recover the cost of your investment. If depreciation is something you would rather avoid, then renting equipment makes sense.
Quality Used Equipment
You might have the opportunity to buy quality used equipment at a great price. If an opportunity presents itself, buying equipment is a great investment. Purchasing well-maintained used equipment can be much cheaper than buying new equipment and may even be more cost-effective than renting equipment for the long-term.
Strut Hanger Pros wants you to know that you can save time and money when you utilize our custom brackets and hangers. Call us for details.