To rent or to buy.
Whether you’re a contractor, farm owner, or simply toying with the idea of investing in some new equipment for your company – this can be a tricky question to answer.
The fact is, everyone’s situation is different. And depending on the kind of excavator you’re looking at, chances are their finance deals will be very different too.
With that in mind, here are some pointers on how to make the best decision for you.
How often will you use your excavator?
This should be the guiding question behind your decision.
Generally, if you expect long-term use, i.e every week, or ongoing use over more than one season, you should at the very least consider purchasing your excavator outright or finding the finance to pay it off over the long term. Renting equipment can get expensive – especially if you find your projects are dragging out. But a long-term investment like this can pay off quickly if you’re getting the right use out of it.
But knowing what the future holds – especially these days can be difficult.
Contractors may need an excavator one week full-time and then not again until months down the track. If you’re dealing with the uncertainty of when you’ll get the working hours in – you should stick to renting as a way of saving costs in the short term.
Calculate your maintenance and servicing costs
When you rent, you rarely have to even think about maintenance and servicing costs. This is the upside for anyone engaged in smaller projects that have a clear schedule and end date. You can return your equipment without having to pay for routine maintenance.
When you buy, it’s a different story.
You’ll want to be sure you understand every detail of all expected maintenance and servicing costs associated with your model and weigh up how these costs will affect your bottom line. If your company has an in-house servicing team then you are well placed for saving on maintenance costs, however, if you’re a contractor looking to buy, it’s good to strike up a relationship with a local servicing agency where you know your equipment will get the regular servicing they need.
When it comes to keeping your warranty, renting and purchasing could not be more different. When you rent – you won’t have to think about a warranty.
However, when you own an excavator, you should be aware that to keep its warranty intact you will need to get it serviced with genuine parts via a manufacturer-affiliated company.
One thing you don’t see is excavators driving to work. Whether you rent or buy – you should also factor in transport costs. This will depend on how you usually get your equipment delivered. Whether that’s with your own semi-trucks – or via a third party, in which case the costs are normally lower compared to the delivery costs set by any rental company.
If you’re renting, try and have as much control over the transportation as possible so you know you’re getting a fair price. If you’re buying – you will need to think more long-term about how you plan on transporting your excavator to and from the job site.
This is one of the most important things you need to consider – especially if you’re planning on buying. Housing your excavator in a dry, sheltered space in the off-season is recommended to keep your machine in top working condition.
Renting leaves you more room to move, as you’ll rarely have the machine for more than a month or two at a time.
Budget and finance
Anyone considering buying will usually be taking out a loan from a bank or other financial institution to finance the excavator. Your credit profile and other factors will influence what kind of deal you end up getting, but it’s good to be aware of this going in.
You will need a clear plan of how your excavator will be paying itself off, and in what ways.
Want the best of both worlds? Try rent-to-buy.
You might be thinking ok, I need an excavator, but it costs 60,000 and I can only front up 50,000.
With a rent-to-buy equipment scheme, you can put your excavator to work and pay weekly or monthly rent and then decide to buy it later for less than the original asking price. For example, you could rent it for a matter of months until you’ve essentially paid off the 10,000 you were short.
This is one of many finance deals you can investigate if the typical rent vs buy conundrum has you stuck in the mud. Plus you get to play around with the latest models and get a feel for them before you make your decision.
If you’re ready to start the conversation – or even have a closer look at the excavators for sale in your area, get in touch with your trusted dealer today.