![]() ![]() ![]() The big advantage of owing your own equipment is that it’s available to you 24/7 – “if you own it, you control it”, as the saying goes. And a multi-purpose piece of equipment (loaders, excavators, skid steers, forklifts, trucks etc.) that can be used for various projects is a great asset on any jobsite. If you’re working on a long project, or if you’ve got several jobs on the horizon, then buying probably makes better sense given that rental costs add up quickly the longer a job goes on. The risk, of course, is that if the machine isn’t being used for the entire time it’s rented due to changes in the project schedule or unforeseen hold ups, then you’re spending money on a machine that’s sitting and waiting, not making you money. If it’s a short-term job, or you need a specialized piece of equipment for a one-off job, then renting may make more sense. Of all the things to consider, project length or the frequency of jobs on the calendar could be the deciding factor in whether you rent or buy equipment. Learn about 1031 Like-Kind Exchanges here. equipment owners: you may be able to avoid paying capital gains tax when you sell and buy equipment for your business. Talk to your financial advisor about the possible tax implications (or advantages) of buying or renting equipment for your business. Roughly, one-third or more of your total expenses will be for the cost of fuel. You will probably have to pay to transport the equipment to and from the rental store as well, over and over.įuel is a cost that is common to both owning and renting and needs to be considered for both. Renting is generally an inclusive cost, but given that a rental company has to turn a profit, you should consider that your rental fees will include the purchase price and the cost of ownership, both marked up. With ownership comes maintenance and operating costs, insurance and other fees such as government licensing, and those costs obviously vary from machine to machine. It’s also important to estimate the cost of equipment ownership versus the cost of renting equipment. Finance your equipment purchase – give your company some extra financial breathing room by financing your equipment purchases and keeping your capital to run your business with low financing rates, your payments could even be lower than rental payments.Buy good quality used equipment – when you rent, you are often paying for the newest equipment with the latest technology purchasing well-maintained used equipment can be cheaper than buying new equipment and may be more cost-effective than renting over the long term.You can reduce the initial financial impact of buying a piece of equipment in many different ways: And don’t forget: when you own, you can see a return on your investment when you sell. Although buying may be a larger one-time financial outlay, the cost of renting can add up quickly, and over a long period of time can end up costing you more – especially if the equipment isn’t being used for the entire rental period. This seems like the most obvious factor to consider – do you currently have the capital to buy or is renting a better option for now? But you should look beyond your current situation and project your costs over several months or years. Here’s an overview of some of the things you should bear in mind before deciding when to buy and when to rent equipment. Certainly, initial cost is a major factor in the decision process, but it’s not the only one – there are several things to consider when it’s time to gear up – usage, availability and more. With pros and cons to both renting and buying, it pays to evaluate your company’s current situation and capabilities (financial and otherwise), your future plans, and carefully consider which method of acquiring equipment will be most advantageous to your business – and which is also simply going to make your life easier. So how do you decide when to buy equipment and trucks and when to rent what you need? Maybe you’ve got some big contracts coming down the pipe, you’re growing or expanding your company’s capabilities, or you just need to replace your current heavy equipment. You’ve decided it’s time you need some heavy equipment or trucks.
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