Benefits Of Renting Construction Equipment
For decades, contractors have asked whether it’s better to rent or buy construction equipment. While the answer depends on multiple factors, including the company’s financial situation and a project’s specific requirements, the following list of benefits in favor of renting equipment are worth exploring for contractors across all industries. This includes contractors strategically seeking to build fleets that combine rented, leased, and owned equipment.
1. Avoid Initial Purchase Costs
Buying new or used equipment involves major capital expense up front, which affects the company’s bottom line until the company sells the equipment. Renting eliminates this cost and enables greater flexibility to allocate funds elsewhere.
2. Eliminate Maintenance & Repair Costs
Owning equipment requires maintaining and repairing it, ensuring compliance, and other responsibilities. Renting places these tasks on the rental company. With our large team of technical and field service employees, each of whom receive 80 hours of annual training, Power Motive Corporation provides maintenance onsite with the same support services we provide customers who purchase and operate new equipment.
3. Remain Flexible
A certain amount of unpredictability exists within any market. Compared to owning equipment, renting can better position companies to adjust to fluctuations in demand and other potential disruptors in the construction market.
4. Acquire Specialty Equipment Easily
Whether you’re tackling a project your current equipment can’t handle, or expanding your business into a niche market, renting enables you to acquire specialty equipment quickly and easily that you might not otherwise use full-time. This lets you get the equipment you need without making a huge investment.
5. Reduce Storage Concerns
Owning equipment means storing it where the weather and other external elements won’t hasten its depreciation. When renting, storage and its associated costs remain the rental company’s concern.
6. Alleviate Transportation Worries
Many rental companies deliver and pick up rented equipment to and from jobsites, saving contractors valuable time that might otherwise be spent transporting their own equipment among locations. Further, contractors working long distances from their home base can typically save money by renting equipment locally vs. transporting their own.
7. Try Before You Buy
Most rental companies rent on a daily, weekly, or monthly basis, something that lets contractors interested in buying a particular machine or attachment test it in the field first. Power Motive Corporation offers rent-to-purchase options for its equipment which consists of one of the largest rental fleets in the region.
8. Obtain Replacements Quickly
Renting adds a layer of convenience and insurance because it’s usually easy to quickly replace rented equipment in the event of a breakdown or if the contractor finds the equipment’s performance unsatisfactory for the job.
9. Get Current Equipment
Rental fleets typically include a large pool of modern equipment using the latest technologies, including emissions-compliant machinery. Such equipment can potentially bolster a contractor’s bidding power and enhance productivity and profits. Power Motive Corporation offers a full line of current production rental machines that serve more than a dozen industries.
10. Avoid Depreciation Issues
Unlike owned equipment that steadily depreciates over time but still requires maintenance and repairs to ensure a return on investment when selling it, renting eliminates this long-term financial commitment. Moreover, immediately deducting rental fees as a business expense may be possible.
Do The Math
Common advice suggests applying the 40%-60% utilization rule when deciding between renting or buying construction equipment. Namely, if you’ll need the equipment less than 40% of the time, rent it. If you’ll need it more than 60%, buy it. If the rate falls in the middle, renting or leasing may be best. Whatever the decision, Power Motive Corporation has invested heavily in its inventory of construction, mining, aggregate, compaction, utility, forestry, and other equipment types and can meet your specific renting or buying needs.
Pros & Cons Of Renting Construction Equipment
Avoid major upfront expenses
Save on maintenance, repair, and storage costs
Easily acquire current and specialty equipment
Improve bonding capability and therefore your balance sheet
Worry-free equipment rental protection via JT Bates Protection Program
No return on initial investment
Buying can be less expensive long-term
Equipment not readily available 24/7