If you have decided that your business needs some trucks or heavy equipment, you have two choices: you can purchase the items outright or rent them. There are pros and cons to each of these options, which can make it difficult to determine which option is best for you.
To make a decision that is viable for your business, be sure to consider the following factors.
Long Term vs. Short Term Costs
Renting heavy equipment can seem like a great deal up front. You only have to pay a fraction of the cost of the machine you need. However, take time to think about how long you will have to use it. Chances are, if the job is going to last for more than a few weeks, the cost is going to become excessive.
For example, if it costs $450 to rent a backhoe per week and you have a job that will last six weeks, you will pay more than $2,700. Chances are this would be a significant dent in the cost of a new piece of equipment. Also, if you are going to use the equipment again in the future, you will have to continue paying this weekly fee. In this situation, buying outright makes more sense.
How the Equipment will be Used
While the goal is likely not going to be to tear up the equipment being used, what if something happens? If you own the equipment, you will be responsible for having it fixed.
However, if you are renting, and have purchased the optional insurance, you don't have to pay any type of fee. The owner will cover the costs of the damage, which may help you save several thousands of dollars.
Maintenance and Care
It is important to remember that if you purchase the equipment you will be responsible for all the maintenance and care of the item. If it breaks down, you have to pay to have it fixed. On the other hand, if you rent a piece of equipment, the owner will likely take care of all repairs and maintenance. This reduces the cost of your business.
Taking some time to think about the factors here will help a business determine if they want to rent or purchase equipment they need to do a job. In many cases, renting first will let the person see if it is the item they want and need. When this is done, they will be able to make an educated decision if they want to purchase it down the road.