Renting vs Owning Construction Equipment
Building, maintaining and enhancing an inventory of work related equipment is costly, risky and often times frustrating. Few can tell you this better than those owning and operating construction companies. The quality and diversity of your inventory determines not only the type of work you can do but also the time frame in which the work can successfully be completed. The traditional way of approaching this topic is for company owners to maintain their own inventory catered to their specialties, this method, however, does come with some major draw backs. An alternative option that comes into play and has been becoming more popular is renting the equipment needed. There are several factors to take into consideration when determining whether or not renting vs owning
construction equipment is the right route to go:
- financial flexibility when renting vs owning construction equipment
- maintaining equipment compliance
- operating cost vs rental cost
Financial Flexibility When Renting vs Owning Construction Equipment
Big machinery, like that which is common at construction sites around the world, is quite expensive so much so that is is necessary for companies to either leverage an existing line of credit or secure a loan/lease. This is often times risky as it not only ties up cash flow but can also effect future borrowing. With the current state of affairs there is no way to guarantee work years or even months out which contributes to the risk level. Although there may be an immediate need for equipment there is no way to guarantee the same type of work once the immediate project wraps up which means you could be stuck making up payments on a piece of equipment that is sitting idle. Shelling out large amounts of money for a piece of equipment which could end up going unused for months at a time is a very real concern for these companies and certainly one of the more important considerations when determining whether renting vs owning construction equipment makes more sense. Although renting the same equipment may seem short-sighted it is a way to avoid tying up large amounts of cash as well as avoiding equipment sitting idle.
Maintaining equipment compliance
Although this is a smaller part of much larger maintenance requirements it is one that renting construction equipment can directly address and the first factor to look and when deciding whether renting vs owning construction equipment makes more sense. With any large scale construction project there are environmental regulations that come in to play. With the government monitoring compliance of regulations that get tighter and tighter each year there is the very real concern of heavy fines being placed for violations caused by human error and faulty equipment. Covering every aspect of a piece of equipment including coolant, batteries, tires and even storage staying on top of the ever evolving list of regulations can in itself be a full time job. As we already mentioned a single violation can incur large fines which would then be attributed to the operating cost of the equipment that caused the violation. As regulations become tighter older equipment becomes less and less relevant as they don’t have the requirements to keep up with these enhanced regulations. That said, having more current models of specific pieces of equipment is a preemptive method to avoid the fines that come with a violation of one of the many environmental regulations. As mentioned above outright purchasing pieces of equipment may not always be possible for many reasons and that is where renting vs owning construction equipment comes into play. Rental companies cycle their inventory regularly to ensure their offerings are as up to date as possible thus attracting clients. With this comes the opportunity for a construction company to stay up to date with their inventory without having to constantly purchase newer and newer models. Equipment rental companies stay up to date with rules and regulations to ensure they themselves aren’t responsible for violating environmental regulations taking more concern off the plate of the construction company owner.
Operating cost vs rental cost
When deciding between renting vs owning construction equipment the biggest influencer boils down to cost. Operating cost vs rental cost to be more specific. As we’ve already shown construction equipment is expensive to purchase and with the larger equipment unrealistic to purchase without some type of credit or loan. Having said that the operating cost of a piece of equipment, especially the larger ones, doesn’t end with the purchase. Maintenance is regularly required, especially after vigorous usage on a job site, storage is required either a large yard or a warehouse space to keep the equipment from being stolen, additionally fuel cost and the like add to the overall operating cost. On top of that if something were to happen to the machine, such as a breakdown or issue that requires specialty knowledge to correct job down-time and the cost of the specialty labor to fix the machine both go towards the operating cost. With all of these in play its easy to see how a necessary piece of equipment can quite easily and quickly become a money-pit that can not only delay a job but can cut into the profit of the work. However, with rental equipment some of the concerns around operating cost are addressed. Of course no rental company is going to pay for your fuel, they will however be able cover insurance and in the case of a broken piece of equipment most rental companies can provide a replacement which will drastically cut down on the job-site downtime. We also mentioned previously that rental companies regularly cycle their inventory which cuts down on the loss of profit through equipment deterioration which is one of the major highlights of renting vs owning construction equipment.
Contact us to Hear More Benefits of Renting vs Owning Construction Equipment
As you can see there are quite a few benefits to renting vs owning construction equipment. It is best to evaluate each situation rather than using one solution or the other for everything. In fact the best solution is often a combination of owning and renting as some pieces of equipment can be used across many different types of jobs where as some are for very specific situations. As a equipment rental company serving the Chicago and North-west Indiana areas we at Aide Rental take pride in the ability to offer a very diverse inventory of equipment to an array of companies and especially those working in the construction realm. We strive to find the best options for our clients and love our repeat clients. For more information on how to best leverage rental equipment for construction purposes please contact us at 708-756-4020 for our Chicago location or 219-838-4300 for our Indiana location. To find specific pieces of equipment or to find more information about renting vs owning construction equipment visit our website http://www.indianaequipmentrental.com/.