Is It Better To Rent or Buy Plant Machinery?

by Mitov Mitrovski
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Acquiring equipment is one of the main investments when starting a business. Carrying out an analysis of the deadline and equipment needs are some of the aspects that every company in the construction industry should take into account when renting any type of machinery. For some experts in the field, the best thing is for the user to be clear about what they really need that equipment for, and knowing this, they can now choose the ideal machine for each project.

The important thing for someone who leases is to maximize the time of use and minimize the “dead” hours, as well as having the field or workplace ready to get the most out of it. That is, knowing the time for which they will lease the machinery to be able to schedule, maintenance, and shipping, in order to save costs for the company.

Currently, users who lease do not need to comply with a specific profile to be able to opt for this service; however, it must be ensured that the person in charge of using the equipment has the knowledge and capacity to operate it.

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Construction equipment is now easier to lease; However, contracts are established that stipulate the rental duration date, the type of equipment, the license plate, among others. In addition, this document contains closings such as not exceeding the use, that the operator has the license and that the insurance is covered by the renter.

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Before making purchases that can be much more expensive than the original price, consider the following variables that will help you decide if it is more profitable to buy or lease what you will need for your next job.

Expert recommendations:

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Duration of work: If this is going to last for more than a semester, before leasing, in terms of profitability, the most advisable thing is to buy the machinery.

Accounting reasons: Although the above variable is important, you cannot overlook your company’s accounting. There are consortia that are not interested in having assets; In this case, buying the machinery does not turn out to be the best option.

Maintenance required: Know that if you decide to buy, your company should be in charge of maintaining the machinery. This is why for many, the leasing or rental of equipment is preferable, but it all depends on the dynamics of their business.

Before making the decision to buy, consider the following:

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  • The project or work must have a duration of more than three years at least if not, it would be an unnecessary expense to acquire them.
  • You must have technicians or operators trained in modern concepts, especially if the heavy machinery purchased is of the latest generation.
  • You must have contacts and locate specialized workshops in heavy machinery maintenance.
  • You have to have your own place where you can store the machines once the project is finished, waiting for another one.

These are the factors that you should evaluate if we decide to lease:

  • If the duration of the work or project is short or less than one year, it is most convenient.
  • Always work with proven companies in the market like Lakeport Metalcraft Inc. This will give us more security when signing the lease.
  • Make sure that the company that owns the machines has a quality maintenance service.
  • Evaluate the state of conservation of the machinery and verify that it complies with international environmental conservation standards.

Perhaps the need for it is based on a short-term project and what makes the most sense is to pay only the expenses associated with a machinery rental contract. Choose a leasing company that will tailor the length of the contract and the rest to your needs, as cpslift.com does.

The size of the operation must also be evaluated. For example, a large company with significant construction or an infrastructure project may prepare an offer that allows for the actual purchase of new equipment and good utilization of it after that project.

Renting process

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All the equipment arrives at the request of the person, builder, or company that is in need of it. Accordingly, they review the capabilities and technical specifications of the equipment and make the corresponding offer. They normally offer up to three options of equipment available for rent.

How are payments made?

Payment terms must be in advance. You can leave a deposit of 50% or 100% of a month’s rent as a guarantee.

What are the requirements?

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Generally request documents such as a photocopy of the legal representative’s certificate, a Chamber of Commerce certificate, and a purchase or service order.

How is the delivery process?

The equipment is always delivered in our warehouse, but the transport is usually at the client’s expense; Almost always clients choose a renting company to do it, but it is an amount that is charged separately, as well as that of the operator.

Insured machinery

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There are companies in the market that do not offer insurance for their equipment, while others do. They happen more with those companies that rent concrete pumps than, in case of theft or some other accident, the respective policy is the one that is in charge of covering the damages caused.

Renting allows you to work with updates because you are guaranteed the constant renewal of your assets. When the rental contract ends, you can formalize a new one with new machinery. If you buy and want to renew, you will have to find a buyer, something that is not always easy.

In the case of rental, the lessee is responsible for maintenance or any of the expenses when the equipment has a fault caused by a problem that it had during the work.

Conclusion:

Apart from having to check availability and depending on the leasing company, we found very few drawbacks of renting machinery compared to buying. Unless it is a company that has these machines continuously working and their amortization is assured, we see rent as the most profitable alternative.

Therefore, it is important that you take all these points into account to, above all, make your company strong, solid and have sufficient cash flow management.

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