Should You Rent Or Buy Heavy Equipment?

When working on a big project, you’re required to make important decisions daily. One of the early decisions is whether to buy or rent the heavy equipment you’ll need. There isn’t a right or a wrong option, you just have to figure out what works for you.

At RECO Equipment, we know that in most industries, competition is high and one wrong decision can really affect the profits. To help you avoid that, we’ve compiled this informative guide so you can choose the right option for you. If you're looking for heavy equipment for rent or sale in eastern United States, visit one of our dealerships today.

Reasons to Buy

If you want to purchase heavy equipment, look into the lower interest rates, tax incentives, and monetary incentives that may be working in your favor. Some of these rules have made purchasing heavy equipment more affordable than it’s been before. Keep your budget in mind though because heavy equipment is quite expensive and you may need to consider your budget before purchasing any equipment.

A great advantage of buying heavy equipment is that once you own the tools and equipment, they are considered your assets in the balance sheets. Once you’re done with them or if you need to raise some money, you can then sell them. Think about the tax breaks you can get with it and how the cost is depreciated using a straight line or double declining balance.

Once you own your own heavy equipment, you can set your own pace and decide what to use and for how long. No more sticking to the timeline set by the renter. It’s true that expensive purchases can lower your ability to give your customers competitive prices, but you can make up for that by renting out your machines when you’re not using them. However, you’ll need to ensure the right insurances are in place before you do so.

If you’re going to use the same machines for a number of different projects, consider buying them. Equipment like loaders, diggers, backhoes, and generators can end up costing a lot if you rent them frequently. If you plan to use the heavy equipment for 22 consecutive days (or 176 hours for more than 8 months), you should buy it. If a piece of heavy equipment isn’t available often, buy it to reduce the time you spend waiting for it. After all, when it comes to business, waiting is wasting.

Reasons to Rent

If you’re new to this kind of work, or if you're unsure about how often you’ll use a particular machine, rent it before you even think of buying it. You’ll get more time to learn about the machine and it will let you calculate operating and maintenance costs to see if it fits your budget.

If you choose to rent heavy equipment instead of buying it, the cost of renting can be passed on to the customer as an indirect or overhead cost that came up during the process of working. Additionally, rental expenses are logged as business expenses and deducted annually. So if you don’t have the funds, renting can be a great option for you.

Keep in mind that buying heavy equipment comes with added costs like insurance and maintenance. If your budget can’t accommodate these add-on costs, rent the machines. Not only will this save you some expense, you may also be able to rent a machine that would have been way out of budget for you if you were considering buying.

When heavy equipment is moved from one site to the next, you need to have permits and cover transportation costs. You can avoid these by simply renting. If you rent, you’ll also not have to worry about where to store your expensive machines when they’re not in use. If there’s a great distance between your sites, you’ll save money by not having to fuel up your machines for the long ride.

If the piece of heavy equipment isn’t something you plan to use often, or you only need it for one project, rent it instead of buying it. If the project schedule is too short for you to recover the cost of the equipment, consider renting it. If there’s any issue with cash flow or with your credit rating, rent the equipment. For heavy equipment, a fleet services department is essential ─ if you don’t have one, then rent the machine.

We hope this guide brought you some clarity. If you need any additional help or if you want some quality heavy equipment, visit RECO Equipment at one of our locations located across the Midwest, Southeast, and New England. We have a vast inventory, as well as trained and friendly staff who’ll help you find the right equipment for your task.