Deciding if your organization would benefit more from owning or renting a machine is a key factor in selecting the right heavy equipment for construction and maintenance operations. Does it make sense to invest and purchase a new machine or should you rent your equipment? At Amaco, we offer both purchasing and rental options, but we understand that there is no one-size fits all approach to heavy machinery. We’ve prepared a guide to help you make an informed decision.
Is the Machine Core to Your Business?
If the machine is integral to your business, then buying often makes the most sense. Owning equipment gives you the greatest degree of control as to when, where, and how you use it. Routinely using a machine also means that you won’t need to continually train staff to operate and familiarize themselves with machinery. On the other hand, if it’s not core to your company, then you may be better off renting or even subcontracting the project or the specialized areas of the project to a team that already has the proper equipment. This way, you won’t lose time and money training your staff to use a machine they will only operate occasionally.
Is the Machine Reliable?
Whether you’re renting or buying, you’ll want to ensure your machine is reliable. When purchasing a new machine, you’ll have the peace of mind of a manufacturer’s warranty should a problem occur. However, any machine wears over time, and you may also require outside support for upkeep and maintenance which can cause downtime disruption. Used machines are a good way to save money, and suppliers may offer inspections and product support for their used equipment, but older equipment may be outdated and can reduce your productivity.
If you decide to rent your equipment, be sure you know the answers to the following:
- Has the machine been thoroughly inspected and deemed to be in good working condition?
- Who is responsible for maintaining the equipment during the rental?
- What and how are you liable in the event that the machine is damaged during the rental?
It’s also important to keep in mind that the more specialized the machine is, the more difficult it is to find a unit to rent. Ensure you check with suppliers on availability and lead times for equipment to acquire or rent to avoid getting caught without a machine when you need it most.
What Are the Costs?
On average, the capital cost to buy a unit makes up roughly 50 percent of the total cost you will incur in owning a piece of machinery over the course of its life. Additional costs include:
- Shipping, transportation, and set up expenses
- Fees for additional modifications or extras
- Ownership costs
- Training and Operation costs
- Maintenance costs
If your machine is core to your business, then these costs are an investment that will ultimately increase productivity and increase the capacity for you to take on new projects. You can also resell your machine when it’s no longer a core asset.
The monthly rental cost is typically 4-5% of the purchase price, so rental costs can add up quickly over time. However, rentals can often be written off entirely against the job you rented the equipment for, whereas a purchased unit is depreciated on a sliding scale.
Checking with your accountant is a good idea to determine what the most cost-effective solution is for your specific circumstances.
Also, if you are down to selecting a few machines to select for a long-term purchase, then renting both can allow you and your personnel more time to evaluate the machines and differentiate between features and operational characteristics.
Whether you’re renting or buying equipment, it’s important for you to consider all these factors in order to make the best purchasing decision. For more information on choosing the right heavy equipment solution, read our full guide.
Amaco is Ontario’s heavy equipment specialist and has helped municipalities, contractors, and owner-operators across the province find the right machine solutions for them. Contact us today to discuss your needs!