Few construction projects can be completed without using some form of heavy machinery. With that in mind, there’s always the difficult decision to either rent or buy the required equipment. For many business owners, deciding between buying and renting comes down to several factors.
When you’re considering whether or not you should invest in that mini digger for sale that you saw online, it’s important to compare the benefits of purchasing to the convenience of renting. To help you with this process, our team of experts has compiled a user-friendly guideline.
To Rent or To Buy—How the Benefits Compare
Both renting and buying construction equipment have their particular sets of benefits. A quick look at the details will make your decision process easier.
Top Benefits of Renting Equipment
Renting equipment has become very popular among Australian construction companies. This can be anything from smaller tools such as jackhammers to much larger equipment pieces such as diggers. Here are a few of the top reasons why many project managers prefer to rent.
Minimises Unnecessary Purchases
Renting enables business owners to rent only what they need when they need it. For instance, purchasing a particular machine or power tool for one job means the unit will be in storage for a while, instead of helping you make money.
No Additional Storage Costs
Many construction companies don’t have very large office or storage spaces as they usually work from their current job sites. Investing in machinery means the company will have to pay for storage—such as garage space—as well as the security of that premises. Renting eliminates the need for this.
Minimal Maintenance Costs
Opting for the rental option means that the business won’t be responsible for routine maintenance and repair costs. Maintenance can amount to a considerable sum if the company has several machines and vehicles, so reducing that expense is very good news for your budget.
No Need to Deal With Depreciation
As with most other vehicles, the value of construction equipment reduces over time. You may sell it at some stage, but don’t expect to get back what you’ve paid. Of course, rental equipment also depreciates, but that affects the rental company’s books, not the construction company’s.
Access to a Wider Variety of Machines and Tools
Since not all construction jobs are the same, you’ll require different machines to get work done for all projects over the course of a few months. To buy all these various machines will require a large amount of capital. Renting enables you to use a wide range of machines, with the latest technology, without spending so much money.
Business owners who aren’t sure if a particular machine is worth the purchase cost have the option to try it out first through rental services. This allows the business owner or project manager to observe the machine’s functionality and potential value before opting to invest in one.
Enables Startups to Have Access to Bigger Jobs
Many startups may be restricted from taking on certain jobs because they don’t have the necessary equipment. However, with a rental option, any company—big or small—has access to the machines and tools required for the project.
Top Benefits of Purchasing Construction Equipment
It’s not uncommon for some construction companies to prefer owning their vehicles and machines. This is especially beneficial if they use particular machines often. Here’s a list of a few of the other purchasing benefits.
Cost-Effective Over the Long-Term
While heavy machinery usually has higher upfront costs, it’s cost-effective in the long run, especially if the machine is used often. Renting a machine used regularly means you’re paying service fees on a regular basis, which can add up to a lot of money. Why not rather spend it on a piece of equipment you can call your own?
Owning a particular machine is an investment because the company can use, rent, trade, or even sell the unit at any time. The business owner can sell a machine that’s not used that often to finance another aspect of the company, so even if your business activities change, such an asset can still be of value to you.
It makes sense for construction companies to rent in the town the project is in, especially since many machines require additional trucks or trailers to transport them. However, the machine required may be unavailable at the time your company needs it. Your own machine is available whenever you need it!
Ideal for Long Term Projects
Purchasing a machine is more convenient and cost-effective if the company is taking on a long-term project. Ownership enables the company to have more flexible utilisation of the machine.
Potential Tax Benefits
Opting to invest in a mini loader for sale may also provide the company with tax benefits that aren’t always available through renting. In many instances, companies can deduct equipment depreciation and loan interest from their annual tax.
Whether a company chooses to rent or buy depends entirely on the types of projects the company takes on as well as your available budget. It’s important to consider all options of both scenarios before making the final decision. Use our benefits summary to make the smart choice!