It may sound odd and counter-intuitive at first, but there are many reasons which contribute to the fact that renting is better than buying. Construciton equipments are mostly large sized and quite expensive to purchase. Also, money is not the only factor which comes into play when comparing the odds with the even. There are other factors as well, and over a long period of time, the benefit achieved from such a big investment may not work out in favour. Let’s have a look at the reasons –
- No Maintenance – Construction equipment are technical apparatus and require maintenance from time to time. Self owned equipment needs to be regularly maintained, checked and kept functional. This is a recurring cost and requires investment of time, money and effort, regardless of using it. Renting dismisses this task.
- Tax and depreciated asset value: Purchasing large construction equipment will eventually start to wear-off in value due to time. With time, the expensive purchases will start to lose value and if it doesn’t continously contribute to productivity, it starts to become a liability. In case of renting, Taxes can be easily deducted at the time of payment processing as a regular business expense.
- Splitting capital: Purchases mean spending a lot of money of something, that might not always be needed or might not be continuously needed for your construction project. In comparison, if that were rented, it would save some additional money which could’ve worked as capital for a different purpose.
- Storage: One of the main hassle with large sized construction equipment is storing it safely for later use. When not in use, storing a equipment can incur more expense, which could easily be saved by renting.
- Intelligent spending: There are many specialised equipment, which can boost the project greatly, but is not needed for a long period of time. It is best to hire those type of equipment and not purchase them, as they are shortlived and do not yield sufficient productivity as per the investment on it. Through renting specialised equipment, many phases of the project can be boosted greatly, and still not carry much cost.
- Cut the transportation cost: Carrying and moving such large equipment is also a cumbersome job which requires a good amount of money every single time it. If there are multiple locations of your single or multi projects, then it is better to hire equipment from a much closer location of that project, rather than to move from your own project site to site.
- Get the latest technology: Maybe you had bought an equipment years ago, but can’t update it because of cost limitations. Renting will provide an effective way out, because rentals will always try to provide latest equipment with better technology which will contribute effectively to your project.
Apart from these, the duration and number of projects, the frequency of equipment use, a comparison betwee the renting cost and the purchasing cost of an equipment, inventory control, and the allocated budget should all be studied and examined thoroughly to get a very good estimate between two choices. When all these factors are weighed against each other, it will be easier to identify which option suits your project best – renting or buying.