Should you buy or rent construction equipment?

When it comes to knowing if you should buy or rent construction equipment, it’s important to consider not only what you can afford, but also what technology you need, how much space you have available, and the amount of time you’ll need the equipment.

What to Consider Before Deciding if You Should Buy or Rent Construction Equipment

What can you afford?

The price tag will always be one of the top considerations when making any kind of purchase. With rental equipment, the upfront cost is on the lower side since you’ll only be paying for the time you need it. Not to mention, most rentals can be fully deductible as a business expense. While on the other hand, purchasing equipment is a long-term investment, and may make sense depending on how long you know you’ll need it.

It may help to figure out your ROI before making this big of a decision.

What technology does the project require?

Renting construction equipment will give you the opportunity to test out some of the more advanced technology that’s been coming out these recent years. Whether it’s features that improve equipment ease of use, integrated grade control, or even the ability to swivel the operator’s console a full 360 degrees, you’ll be able to test these advanced features out and see how they improve your operations.

How much space do you have available?

Before you decide to buy, make sure you actually have the space for the equipment. This can come as a surprise cost (and logistical nightmare) if you make a purchase and then realize you won’t be able to squeeze that excavator in after all.

How long will you be using it?

Keep in mind how long you are planning on using the equipment. A year or less? Probably a good idea to go ahead and rent. Longer than a year may mean it actually would be a good investment.

Figure Out Your Construction Equipment Utilization Rate

One way that makes the decision easier, is to simplify it into an equation and find your construction equipment utilization rate.

Utilization Rate = (Estimated Operating Hours / Available Hours) x 100

The estimated operating hours is how many hours you think the machine will be running this year. Then you divide that by available hours, which is the total workable hours in your business year. Then you multiply that by 100.

If your utilization rate is above 65%, that usually means it’s a good idea to purchase the equipment. If your utilization rate is below 65%, it will probably be a better idea just renting.

Keep Your Equipment Running by Sourcing Parts through YellowIronParts

Whether you decide to buy or rent construction equipment, you can always trust YellowIronParts to find the part you need to keep it running. YellowIronParts works with heavy equipment and parts vendors near you that are ready to get you what you need. Start shopping on YellowIronParts today.