3 workers on jobsite looking at tablet - Ways to Save on Heavy Equipment
3 workers on jobsite looking at tablet - Ways to Save on Heavy Equipment

Ways to Save on Heavy Equipment

No matter the size of your business, it's important to stick with your budget to grow and expand operations. Your budget is also an important resource when you need to acquire heavy equipment as it can help influence the purchase process and lead you to seek savings opportunities.

We're making it easy for you by breaking down different ways your business can save money on heavy equipment. From renting to financing, there are tips and tricks to get the most out of every dollar you spend on acquiring heavy equipment, financing a rebuild, buying parts or paying for service.

Keep reading to learn more about the many ways to save on heavy equipment.

1. Buy the Right Equipment for the Job

Adding the biggest and most high-tech equipment to your business's lineup may be tempting. However, that's not always a good idea, and there are some important factors to consider before you buy.

A common mistake people make is acquiring the equipment they think they need rather than the equipment they actually need. It's best to evaluate your needs and conduct thorough research before purchasing equipment for your upcoming job. Be sure to review the following before committing to a piece of equipment:

  • Size: Consider the size of equipment you need that's suitable for your applications and helps maintain efficiency.
  • Versatility: Some heavy equipment enables you to use different attachments to put your machine to work in different applications, making it more versatile. It's beneficial to factor in versatility when making your decision, so your business gets the most out of your equipment by using it for many jobs and/or projects.
  • Budget: Determine your budget before choosing equipment as this will help to guide your decision-making process. It's important to know how much you can afford to ensure you find the highest quality options within your means, and without tying up all your capital.

2. Resell Equipment You Don't Need

When your needs change, your business can save by reselling your heavy equipment. Consider how the following contribute to the ownership costs of your current equipment:

  • Storage: Many factors go into the storage costs for heavy equipment. Consider the amount of space your equipment needs at your warehouse facility and the costs of keeping it secure and protected from theft.
  • Maintenance: It's recommended that your business have a preventative maintenance schedule for all of your equipment. Routine maintenance can help maximize the uptime of your equipment and prevent potential failures. However, the annual cost of servicing your equipment can add up.
  • Protection: Another factor that contributes to ownership costs for heavy equipment is keeping it protected. While there are many benefits to protecting your machines with insurance or beyond the standard warranty with an Equipment Protection Plan, those expenses can impact your cash flow.

To begin, evaluate your current equipment and consider machine usage compared with your volume of available work. If you don't use some equipment often, it might be best to sell it. Leasing and renting equipment are great alternatives to purchasing equipment if your needs call for a more temporary solution.

3. Rent or Lease Equipment for Temporary Needs

Purchasing equipment is a great long-term solution, but it's important to understand your options when you need equipment for a specific project or single use. Renting equipment is significantly cheaper than purchasing it and you don't have to worry about the ownership and preventative maintenance costs. Plus, renting equipment is a great way to test out the latest technology before you buy a machine.

Some financial benefits of renting or leasing equipment:

  • Lower upfront costs: When renting or leasing equipment, you can benefit from lower upfront costs as down payments aren't typically required*.
  • Maintenance: Generally, routine maintenance costs are included with your monthly payment since you don't own the machine.
  • Storage: When you buy heavy equipment, your business is responsible for storage solutions. By renting, your business doesn't have warehouse costs for machines that aren't being used. Instead, you can simply return your rented machine if it's no longer needed.
  • Depreciation: You can avoid equipment depreciation losses by choosing to rent or lease equipment.

*Subject to approval. Terms and conditions apply.

4. Maintain Your Equipment

Performing routine preventative maintenance can help you save time and money by being proactive about repairs and replacing damaged components. A Cat® Customer Value Agreement is the best way to lock in your maintenance costs. Contact your local Cat dealer to discuss your options.

The financial benefits of maintaining your equipment:

  • Extend operational life: By taking time to service and maintain your equipment, you can extend its working life and save money on replacements.
  • Increase productivity: When your equipment performs optimally, you can increase your output by working more effectively and efficiently.
  • Reduce downtime: By fixing problems as they arise, you can prevent major breakdowns that lead to valuable time and money lost due to downtime.
  • Get a higher resale value: Keeping up with regular maintenance helps ensure your equipment remains reliable and ready to work. Plus, routine maintenance can help impact the resale value of your equipment.

Maintaining your equipment is one of the best things you can do for your business financially. Regular inspections and maintenance allow your business to keep its equipment ready to work.

blog graphic

5. Monitor Financing Rates

When looking to save money, it's helpful to consider heavy equipment financing rates to ensure you get the best rate available. To put it simply, the higher the interest rate, the more you are paying for your equipment.

You'll want to monitor interest rates, which can vary depending on the following:

  • Creditworthiness
  • Cash flow
  • Equipment type
  • Condition
  • Experience
  • Down payment amount

Loan terms are also important. It's essential to choose a term based on what you can afford. Loan terms can range from one year to a few years, depending on the type of equipment. Monitoring financing rates is essential because doing so makes it possible for your business to improve expense planning and preserve capital.

blog graphic

Special Finance Offers on Heavy Equipment

In general, heavy equipment interest rates can vary from as low as 8% to as high as 30%. However, limited-time promotions can help decrease the rate at which you are financing equipment. Special offers are typically offered to qualified customers for:

  • Select new and used Cat equipment
  • Rebuild financing with Cat Financial
  • Parts, services and attachments

View current special offers and contact your local Cat dealer to find out more.

Benefits of Equipment Financing

The following are some of the monetary advantages of equipment financing:

  • Accessing capital: Having an equipment loan allows your business to free up working capital that you can reinvest into your business for various needs, from marketing to equipment repairs.
  • Freeing other lines of credit: By choosing to finance your equipment through the manufacturer instead of a bank, you can free up this line of credit in case you need it for other business purposes.
  • Increasing financial flexibility: Equipment financing makes it possible to avoid big upfront payments and manage your monthly costs.
  • Saving on tax payments: In some cases, businesses that finance their equipment can deduct the costs from their taxes. Consult your accountant or tax expert to learn more.

How Cat Financial Can Help

When you choose Cat® equipment, you have access to flexibility. At Cat Financial, we understand your business and the industries you work in, and our financial solutions are developed specifically for Cat customers. When your business is facing unexpected challenges, you can count on our team to support you and offer the flexibility you need to keep moving forward.

Explore the following ways Cat can help you save money and make the most of every dollar spent:

Buy Cat Certified Used Equipment

Not all preowned equipment is the same and Cat Certified Used equipment is a great alternative when you need reliable equipment for less than the price of a new machine. For equipment to qualify for Cat Certified Used status, each machine must undergo a rigorous 140-point inspection. Here are the key advantages of buying Cat Certified Used equipment:

  • Great Selection: Browse a wide selection of used inventory so you can find the right equipment you need for the job.
  • Genuine Cat Parts: Any replacements identified during inspections are replaced with genuine Cat parts, which are backed by the standard Caterpillar warranty.
  • Latest technology: Cat Certified Used equipment is equipped with the latest upgrades in fuel efficiency, safety and operator comfort using many of the same features that roll out from the factory today
  • Warranty: Cat Certified Used equipment is backed by a Caterpillar warranty which helps protect more than 70 different powertrain and hydraulic system components.
  • Service Documentation: Every machine is provided with a comprehensive service report, so there are no surprise repairs you’ll need to make.
  • Stable Market Value: Generally, Cat Certified Used equipment retains its value over time.

Take Advantage of Tax Benefits

There are tax benefits when leasing and buying used heavy equipment. It's important to familiarize yourself with how to minimize your tax payments and write off as many of your expenses as you can. We also recommend that you consult your accountant or tax professional to find out what tax benefits you qualify for.

  • Leasing heavy equipment allows you to get equipment in exchange for a monthly fee over a set period of time without the additional expense of ownership. In some cases, your business can make the most of lease payments by writing them off on taxes as a business expense. Generally, this can help lower your overall tax responsibility and save money.
  • Buying used equipment can also offer tax benefits. As your used equipment depreciates in value, you can receive a tax write-off for this loss and minimize the taxes you owe.

Add a Cat® Customer Value Agreement (CVA) by Cat Financial

When running a business that relies on heavy equipment to get the work done, it's essential to take all the risks into consideration and protect your company. An Equipment Protection Plan (EPP) for your machines is beneficial to protect your investments. An EPP can provide the following:

  • Coverage beyond your standard machine warranty
  • Multiple coverage options to fit your budget
  • Repairs and service from factory-trained technicians

You can transfer the EPP when you sell your machine in the same region you obtained the plan.

Protect Your Investment with Physical Damage Insurance

You can also protect your investment by insuring your equipment. With physical damage insurance, you can help make sure you're protected from total or partial losses and the costs to rent replacement equipment. This coverage can help protect your equipment from unpredictable events including:

  • Vandalism
  • Theft
  • Collisions
  • Fire
  • Floods
blog graphic

Earn Rewards With Your Cat Card

The Cat Card is another way you can save on heavy equipment. It's convenient and account holders get access to exclusive offers, earn Cat Card Rewards on qualifying purchases* and enjoy no annual fee. You can use it at any participating Cat dealer or Cat Rental Store to pay for:

  • Parts
  • Engines
  • Work tools
  • Attachments
  • Services
  • Repairs
  • Rebuilds
  • Rental equipment

*Get Details

Avoid Late Fees with Auto Pay

When you enroll in autopay through MyCatFinancial, your business can make payments on your card automatically for your convenience and peace of mind. Plus, you won't have to worry about late fees because your payments will be made on time every month.

You can also use MyCatFinancial to:

  • Access important data about all your machines.
  • Benefit from special financing and extended protection offers.
  • Get assistance whenever you need it.

Learn More About Saving Money When You Choose Cat Equipment

Are you interested in learning more about heavy equipment financing for Cat equipment? 

Request more information today!

Contact a dealer
blog graphic
blog graphic