Getting Heavy Equipment ???  Rent, Lease or Buy

Contractors and machine owners have multiple options at the time to add some new machines to their operations. Some of the most common options for companies looking to acquire machinery are renting, leasing or buying. Many factors must be weighted by the buyer in order to choose the best option. Cost, Cash flow, hour of expected work, maintenance costs, warranty, parts availability are just some factors that must be evaluated.

There are benefits and costs to any purchase decision. Understanding of your operations is key for the correct purchase decision.

Buying Heavy Equipment

If your company anticipates the use of the machine for the long run, then buying may be the best option. Usually contractor considering ownership of the machines, expect to use the machines for an extended time in different projects. Choosing the buying option the contractor must be consider that there will be maintenance costs involved reducing the cash flow of the company and having some downtime. Although the owner is responsible for the ongoing maintenance, owner may take advantage of asset depreciation to recover some of the costs.

Renting Heavy Equipment

Renting is the best option when the contractor anticipates a piece of equipment will be only used for a short period of time. There are some drawbacks of renting such as machines availability, condition of the machine rented among others. However, contractors with small fleets see renting as the best option when they need to use a machine for a short period of time or for an specific job decreasing the operation costs of the company.

Leasing Heavy Equipment

Leasing heavy equipment may be an excellent alternative for contractors with established business operations and good relationships with banks and financing companies. Usually leasing offers a lower monthly payment than rental and loan payments with little down payment. Although it may be beneficial for the cash flow of the company, the equity on the company build up at slower rate. This extended build up of equity add to the total cost of ownership if you ultimately purchase the machine. Lessee must also consider maintenance and repair costs since he is responsible for these expenses. Leasing allows to keep your fleet updated with modern equipment that ultimately is reflected in less maintenance and expenses costs adding profits to the operation.

These 3 options bring some benefits and some drawbacks. Knowing your operations will help you to make the best decision by reducing operation costs and increasing profits.

At fleestworld.com, we help contractors and machine operators to reduce maintenance costs by offering high quality spare parts at competitive costs. At fleetsworld.com you can find parts for Heavy Equipment from brands such as Caterpillar, Komatsu, John Deere, Case, Hitachi and more. Engine, Transmission, Undercarriage parts, driveline, drive train, Hydraulic systems and more.

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