There are around 3,642 construction equipment rental businesses in this country, and these companies serve a vital role.
Construction companies turn to these businesses when they need to rent construction equipment for projects. However, you might wonder if it’s better to rent or purchase construction equipment when you need it.
Depending on your needs, the answer varies.
Keep reading this guide to learn about the differences, as this can help you decide which route to take.
Frequency of Use
Construction companies often need heavy equipment for their jobs, regardless of the size of the job.
But you might consider how often you’ll need the equipment before deciding whether to buy construction equipment or rent it. In other words, how often will you use the equipment?
If you need it for every job, buying it is probably the best option. However, you might consider renting it if you’ll only use it periodically.
After all, you’ll need a place to store the equipment if you buy it, and it might sit around for months at a time if you rarely need it.
Upfront and Ongoing Costs
Secondly, you might want to monitor your construction project costs carefully to avoid overspending. If this is the case, it might be helpful to consider the upfront and ongoing costs of renting vs. buying equipment.
Buying equipment might require a significant down payment. Then, you can finance the rest and pay it off through monthly payments. As a result, you’ll invest a lot of money into the equipment.
Renting equipment is also costly. However, it’s a one-time fee per use. Therefore, you won’t spend as much by renting heavy machinery.
Next, you might consider the tax write-offs with both options.
First, you can depreciate the equipment when you own it and write off its expenses. Therefore, you’ll receive significant tax write-offs. However, you can write off the costs of heavy machinery rental if you decide to rent it.
So you’ll still receive tax write-offs with renting equipment. However, you’ll have more tax write-offs when buying machinery. On the flip side, you’ll also have higher expenses.
Finally, you might consider the maintenance you must complete with renting vs. buying.
You won’t be responsible for the maintenance of rented equipment. You also won’t have to deal with the transportation of the machines.
However, you will be responsible for all the maintenance if you buy construction equipment. You’ll also have to handle the equipment transportation yourself, which might require investing in a trailer.
Additionally, you might need to invest in tracking the equipment for safety purposes and other reasons. You can learn more about fleet tracking here. Considering these factors can help you determine whether to buy or rent.
Should You Buy or Rent Construction Equipment?
After reading this, you’ll know how to determine if you should buy or rent construction equipment for your business. You can consider this information to make an informed decision for your company.
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