5 Questions to Ask When Deciding to Buy or Rent Equipment
Some business equipment requires a larger investment than others. Industrial equipment, in particular, can cost many thousands of dollars, professional maintenance, and possibly a licensed operator. This is why many companies find themselves debating whether to buy their own equipment or rent from a local provider. While it may seem that owning all your own gear is preferable, there are many business situations where it is more practical to rent equipment only when you need it to spare yourself long-term expenses.
Whether you need lifts, earth movers, compressors, or similar large-sized industrial equipment for certain jobs, you may be asking yourself if buying is worth the investment. To help clarify the answer, ask yourself these five questions instead. Your answers will make it clear whether it is more practical to make the long-term investment or work with a rental company to supply these pieces of equipment just in time for specific projects that require them.
1) How Often Will We Need It?
Often, the biggest determiner of whether you should buy or rent equipment is how frequently you will use that equipment. You might like to have your own earth mover, for example, to use on-demand. But you may realistically only need the equipment a few days out of each year.
If you have found yourself renting or borrowing this particular equipment regularly and using it several times a month, buying is likely to be your best option. However, if you use it rarely or only for specific projects, renting equipment can actually be more economical over time.
2) Do I Want to Pay for Maintenance?
When debating whether to buy or rent equipment, it’s all-too-easy to get wrapped up only in the initial costs. It’s likely you’ve only been comparing the purchasing cost (and loan amount) for buying versus the hourly cost of renting. But don’t forget that large complex pieces of machinery also require regular expert maintenance.
Maintenance is an additional cost in both supplies and time to keep the equipment in good condition between uses, clean and maintain it after use, and repair it should anything occur during a job. If the cost of maintenance on top of the purchasing cost seems too high, remember that rental companies handle maintenance behind the scenes and do not make that a part of your hourly rental cost.
3) Does Having the Latest Model Matter?
With some industrial equipment, the model from ten years ago is almost exactly the same as models produced this year. For others, having the latest model means better technology, safety features, and the prestige of having that shiny recently produced equipment with you on jobs with clients.
For the same reason executives lease the latest model of car instead of buying, it might matter to your business. You may want to have access to the latest models of equipment. If this is true, renting equipment is actually the better option because you will have access to their newest models every time you return to rent equipment. If you buy, you’ll be committing to one model no matter how long it takes to pay it off.
4) Will It Pay For Itself Before the Value Depreciates?
Speaking of long-term costs, ROI on industrial equipment does not always shake out the way we’d like it to. Equipment that sees a lot of heavy use also tends to depreciate in value and usefulness over the years. While the equipment may help your business to make money, how quickly can it effectively pay it’s own costs?
If the value depreciates too quickly, you will be unable to get your true money’s worth from the purchase. That’s actually why equipment rental is so common. The rental company makes sure they can earn the full value of the expensive equipment they source and provide by renting it to many customers throughout the year, making the most of local demand.
5) Does Rent Equipment Come with Value-Added Services?
Finally, don’t forget to calculate for additional services your rental company can provide that will save you costs and effort. Most rental companies, for example, will deliver your equipment to the work site fully fueled, maintained, and ready to go. This saves you the expense of at least the first tank of gas, maintenance, and even the diesel to deliver the large equipment to your work site and take it back when the job is done.
Your rental company may also offer additional services like setup and teardown, licensed operators, assistance if the equipment malfunctions, and package opportunities if you need more than one large piece of rental equipment for a single job.
Is buying or renting industrial equipment the right choice for your business’ needs? Only you can know that; hopefully these questions have helped you determine the answers based on your own unique circumstances. If you do choose to rent equipment, Vandalia Rental is here to help with all your industrial equipment needs. We are dedicated to providing extraordinary service, delivering equipment right to your work site and ensuring the job is done right the first time, every time. For more information about Vandalia equipment rental services, contact us today!