New equipment gives you the latest technologies and operating features. Used equipment can stretch your budget.
But renting can actually give you the best of both worlds — you get relatively new equipment without having to make a long-term investment — and so may make the most sense in many cases.
Intelligently expanding your fleet gives you more flexibility in negotiating contract agreements. You can potentially take on bigger or more jobs and cover production needs during planned downtime for maintenance or rebuilds.
Renting attachments may make sense, too. Adding a specialized tool or a larger bucket to your arsenal allows you to work in more applications, without dropping big money on a whole machine.
Let’s take a look at 10 things to consider as you weigh renting versus buying:
1. Upfront costs
If your business doesn’t have a lot of immediate cash on hand to buy a machine, renting may be a better option. You’ll pay less initially for the rental and get to use the equipment as needed. Additionally, you can skip insurance premiums and maintenance costs when you rent.
Spend less money upfront and you’ll have more working capital to invest in your company's operations. You might want to hire more workers or rent even more equipment. You’ll have more options to do so since you won’t have capital tied up in purchased machinery.
2. Long- or short-term use
For consistent, long-term use of a machine, buying makes sense. But if you need the equipment for only a short time, say for six months or less to complete a specific part of a job, renting offers the lowest cost option. With flexible rental agreements, you can rent equipment for several weeks or months, then return it to free up cash for other needs.
3. Frequency of operation
Estimate the number of days you’ll use the equipment over a six-month period. Divide the days of use by 30 to calculate the percentage of use. If this value is below 40%, renting is the best option. If it is between 40% and 65%, consider other factors on this list to determine if you should rent or buy. If your use percentage is higher than 65%, buying is probably the best solution.
4. Try before you buy
Buying equipment is a big commitment. You can make sure you’re getting the right machine for your needs by renting it first. You’ll see how your crew adapts to using it and how well it suits your operations.
Renting lets you select from a variety of sizes and brands to find the perfect fit. During the rental period, be sure to get feedback from your crew to see which equipment works best for them. Also ask them for recommendations for optional equipment.
A try-before-you-buy approach helps you make the most informed decision before investing in new equipment. When you know that a particular machine model will work well on your jobsite, you can feel more confident that your purchase will be a smart investment.
5. Routine maintenance costs
Owning equipment comes with the added cost of having to make repairs and conduct regular maintenance. That’s no problem if your operation and budget allow it. Renting, on the other hand, gives you the benefit of well-maintained machines without the need to invest time, money or resources in routine maintenance. Maintenance costs are normally included in the rental payments.
6. Storage space
For purchased equipment, you need adequate storage to prevent damage when it’s not in use. With rented machinery, the rental company stores the equipment for you. Plus, you can get by with less land for your equipment yard. That can make a big difference where real estate is expensive.
7. Specialized equipment or attachments
Even if you have an extensive existing fleet, you may find a need for other machines or specialized attachments. Renting gives you access to all the options available from your rental store. For example, you may not have invested in snow removal equipment due to its seasonal use. Your rental company can get you what you need with just a phone call.
8. Latest technologies
As technology advances, heavy equipment becomes more efficient, more productive and easier to operate. Buying a new machine puts the latest technologies at your fingertips — but so does renting. You can try equipment with features such as Cat® Grade technologies, which help you get to grade faster and more accurately.
9. Long-distance projects
If you regularly work out of state or take on long-distance projects, you’ll incur high costs just transporting your equipment. Consider renting equipment from a local rental store to dramatically reduce those expenses.
10. Number of worksites
The logistics of getting the right equipment to the right places on time can be a challenge. One jobsite may lose valuable time while waiting for much-needed equipment to arrive from another site. Instead of transporting heavy equipment between jobsites, you may want to allocate some rental equipment to certain sites. That way, your crew always has the assets they need.
If you think renting equipment is right for you, learn more benefits in this article. You can also contact your nearest Cat Rental Store to discuss rental solutions for any job.