Rent or Buy? How to Make a Reasoned Choice
If you are looking for equipment for your construction or landscaping job then you face a number of choices. One of them is whether you should rent or buy the equipment you need.
The answer to that question is often the less-than-helpful “It depends.” Here are some factors you should consider when deciding whether to rent or buy:
How much capital do you have?
Buying outright is only an option if you have the needed capital to purchase the equipment or the credit to get a loan. Although rental payments are often higher than loan payments, there is no down payment involved.
How long do you need the equipment for and how much are you going to use it?
For equipment you use all the time on every job site, buying can make sense. For more specialized gear you only need rarely it can make more sense to rent. In some cases, you may need a piece of equipment once and then perhaps never again.
There are some tax breaks that can tip the math in favor of buying. Taxes, interest, insurance, repairs and depreciation are all tax deductible – although some of the tax breaks are only available if you buy the equipment new.
Maintenance can be extremely expensive and, especially for smaller companies, tie up resources that might be better used on your primary product. Rental companies will provide repairs, do maintenance. You may also be able to switch out a broken piece of equipment for a working one, reducing downtime and making it easier to meet deadlines.
Purchased equipment will drop in value over time. This means that any time you sell equipment, you do so at a loss. It is worth comparing that loss in value with the cost of renting equipment for the same period.
Is this the right equipment?
Sometimes it can be hard to tell exactly what piece of equipment you need for the task. In this case it can be much cheaper and easier to rent the equipment and then you can return it if it is not doing the job. Vandalia Rental will let you buy the equipment you are renting if you are happy with it.
Equipment has to go somewhere when it is not being used. If you have a small home base with limited storage space, renting can make more sense and can often work out cheaper than buying and then renting a storage location.
On a related note, moving equipment over a longer distance can be extremely costly. If you have a job that is out of your normal service area it can sometimes work out cheaper to rent the equipment you need than to move it from home. If the nature of your business is such that you often have to travel long distances between jobs, it is worth considering renting.
If your business is seasonal, then renting equipment and returning it at the end of the season can be useful. In some climates, construction and landscaping can only take place during the summer months. And storing equipment for the winter can be cost prohibitive.
For most companies, a combination of renting and purchasing equipment is the best solution, with equipment they use a lot being purchased and gear they need only infrequently rented. For individuals doing personal projects, rental is almost always the best solution. If you are looking to rent or buy construction equipment for your next project, then contact Vandalia Rental today. We provide rental equipment to everyone from small businesses to the government and we also sell used equipment, so if you realize you need the equipment you rented full time, we can talk about the options for you.