The Advantages and Disadvantages of Buying vs. Renting Construction Equipment
For a contracting business, work and profit are determined mainly by one thing: the equipment. Every trade requires its fair share of tools, and not unlike other industries, construction is similar. The main difference lies in the reliance on the machinery used and the cost associated with it. As the biggest outlay for most contractors, matching perhaps even labour costs, it’s easy to see why a dilemma exists between buying and renting equipment. The answer to this lies in what the situation calls for as well as being aware of the advantages and disadvantages of the options.
Also known as plant hire, renting construction equipment generally serves as an economical and frugal approach for the sensible contractor keen on minimising risk of high expenditure. This boasts a great deal of advantages such as only paying for the duration that the equipment is being used and being free from worries of storage, transportation and maintenance costs. The contracts available from companies like Plant Hire Chesterfield are usually flexible too, making them viable for a large variety of different projects. You’ll also be mitigating loss via depreciation and economic conditions, so it comes as no surprise how appealing this method is.
But it also comes with its share of disadvantages too. One con that stands out the most is that for long-term work, the rental costs can add up quickly and may prove to be much more expensive than purchasing the equipment. Availability can also be a problem, but this is usually remedied by ensuring that proper planning is done and equipment is rented ahead of time.
Even with the trend in renting, there are still a number of companies that opt to buy construction equipment as opposed to renting. You might think that with the high amount of expenditure needed to purchase the machinery, it would be a money pit that might break the budget. In the right situation however, it can prove to be a good option. For one thing, availability becomes a nonexistent issue since the equipment is at your disposal. You can choose when and where you want it to be utilised without any obligations. Your own workers will also have a better chance of mastering it because of this. The best part is that you won’t be paying for any rental fees at all, making it a decent long-term investment.
However, before buying it is important to set aside a large amount of money. Aside from the up-front costs, which will undoubtedly be high, be prepared to spend for maintenance, storage and transportation fees. Depreciation can also play a factor as time passes, and you may potentially incur losses when it comes time to sell.
The decision to purchase or rent generally depends on the consistency of operations as well as the budget available. There isn’t necessarily a right or wrong path to take, so long as the choice is determined by the needs of the business and its current capacity.