Deciding whether you should rent your capital equipment or buy it outright takes more than just a roll of the dice.
Working out the tax differences, understanding what equipment you need and then finding the right gear to buy can just add to the confusion when all you really need to do is run your operation.
There can be economic and convenience reasons to hiring or buying, and the final decision will ultimately come down to your own preference and business needs.
But it is worthy to note that there are two significant advantages to hiring that you just won’t get when you buy outright.
Today’s changing economic environment can take a business in all sorts of directions. One day you could have more work than you can handle; fast forward two years and you could find yourself struggling to secure the next contract.
Economic fluctuations are a sad fact of business life but there are ways you can reduce your exposure to the impacts.
When you hire your equipment, you can change the size of your fleet as your workload changes – in tough times, you can downsize and avoid the cost and hassle of disposing of items you bought outright but can no longer afford to keep; in boom times, you can add new machines and models to your line-up at a fraction of the cost of buying new.
In a rental agreement, the rental cost is fixed for the term of the agreement and typically includes equipment maintenance which can allow you to avoid the high costs of repair and replacement that you would incur with a wholly-owned fleet.
Fixed costs can also help you to more accurately plan your operating budgets and understand your business expenses, which can be a big advantage in a changing economy.
Some of the other advantages to hiring your equipment include:
The most important part of the “hire or buy” decision is to do your research beforehand, and apply it to your individual circumstances and needs. What works for your competitors might not work for you.
Once you’ve done your research, make sure you partner with a quality supplier to guide you through the final stages of your decision.
LiftRite Hire & Sales has an extensive range of materials handling equipment for hire including Manitou forklifts and rough terrain machines, Kalmar big lift trucks, Gehl skid steer and rubber track loaders, and Kubota mini-excavators.
Our hire specialists can tailor a rental agreement to suit your business needs and, in the rare event that your equipment breaks down, they can arrange repair or replacement to get you going and back on the job with minimal downtime.