5 Factors to Determine If You Should Rent or Buy Your Equipment
Date published 18th June 2019
In Australia, the construction equipment rental market is expected to reach the $1 billion mark by 2023. This forecast is due to the continued growth of the construction industry and the government’s investment in infrastructure projects that aim to strengthen the country’s economy. The option to rent heavy machinery has become an attractive choice, especially for small to medium construction companies, because of its convenience, flexibility, and affordability.
However, there are still plenty of companies that choose to buy their equipment. This decision is mostly influenced by factors such as frequency of use and project lengths. Before you make your selection for your construction business, consider these essential factors.
i. Current and Future Financial Situation
The first and foremost factor that you should look at is your company’s current financial situation. Afterwards, look beyond the present and determine if you can cover the projected costs of the equipment. This is where you will have to compare the cost of ownership with the cost of renting. The former entails the initial payment and all the other costs related to maintenance, insurance, and licensing. The cost of renting, on the other hand, is more straightforward and ownership expenses are often covered by the plant hire companies with additional costs included in the initial contract.
ii. Frequency of Use
The frequency of use of the machinery will help you determine if it is better to rent or purchase your equipment. If the project is short term or even a one-off, then equipment for hire is the practical choice. However, your company handles long term projects on a regular basis then, it will be more cost-efficient to purchase your equipment.
iii. Fleet Management
Fleet management is concerned with the financing, maintenance, and overall control of your construction equipment. For these types of machinery, specialised skills and training are required to ensure that every aspect will be taken care of properly. This often results in additional expenses, particularly if you choose to purchase your equipment. Since most plant hire companies need to monitor their assets, they often include fleet management services in the rental contract.
iv. Transport and Storage Costs
Transportation and storage are necessities whether the equipment is bought or rented. However, they differ in terms of costs. When you choose to purchase your equipment, you have the responsibility to find the appropriate transportation and storage for it. In contrast, when you choose to rent your equipment, the company will often handle its transport to and from your site. Additionally, they will oversee its proper storage as it is in their best interest to do so. These services are included in the payment scheme to avoid any surprise costs.
v. Upgrades and System Updates
Construction equipment, much like any piece of machinery, will require upgrades and updates over time. These are to ensure that your operations meet industry standards and to help you keep competitive in the market. However, these upgrades can be expensive, especially when they are frequent. When you choose to purchase your equipment, all of these additional expenses will fall on your shoulders. When you choose to rent your equipment, you have the opportunity to take advantage of these upgrades without having to pay the full cost.
Plant and Equipment for Hire with RediPlant
RediPlant understands the different needs of the construction industry. For the last 20 years, we have worked to provide companies with reliable plant and equipment hire services. To cater to the varying needs, we have flexible payment plans that are adaptable to your company’s demands. We have a wide selection of world-class construction equipment that is regularly maintained and upgraded to meet industry standards. Our team will gladly work with you to find the ideal solution for the challenges you face.
For more information about our services, call us on 1300 851 871 or fill in our contact form here.