Mining contractors and construction companies often face the
dilemma of whether they should buy heavy equipment or rent it for their
projects. Although it may seem that purchasing new equipment is the best
choice, there are situations when renting is the most viable option. However,
jumping to any conclusion without carefully studying the situation can prove to
be a recipe for disaster.
Before you decide whether you should rent the heavy
equipment or buy it, keep in mind the following considerations before making
the final decision.
Length and Frequency
of Projects
The frequency and length of the projects play a very
important role in making this decision. If you are working on several projects,
or on a long term project, then buying is the best option to go with, because
the rental costs will continue to add up and turn into a huge sum.
On the other hand, if you are working on a short term
project, or need the equipment to perform a special, one-time task, then
renting will probably be a better choice.
Availability of Heavy
Equipment
If you own heavy equipment, you will enjoy the benefit of having
it available for use 24/7. Owning heavy equipment gives you an upper hand in
situations when there are unexpected changes in project schedules, or there is
an urgent project which you have to undertake at a moment’s notice. With
renting, there is a potential risk of the unavailability of the heavy equipment
when you need it.
Cost Factor
This is one of the most important considerations. Whether
you are renting or buying heavy equipment, there are certain costs associated
with each option. With ownership, there comes capital investment, operating,
maintenance, government licensing, insurance, and other similar costs.
Renting is generally a single cost, as you just have to pay
the rent to the owner for the timeframe you need the heavy equipment. However, you
must evaluate and compare several renters before you choose the right one based
on the condition, efficiency, and performance of the equipment and renting
fees.
Financial Situation
Depending on the financial situation of your company, you
can decide whether you can afford to buy new heavy equipment or renting is the
only option for you right now. Apart from this, you should also project the
cost of renting and buying over the coming months and years, and try to look
beyond your current financial situation to make an intelligent, well-grounded
decision.
Pros of Buying
·
24/7 equipment availability
·
Possible tax benefits
·
Less downtime
·
Higher
Flexibility
·
Cost-effective
in the long run
Pros of Renting
·
Access to a wider range of heavy equipment
·
Latest equipment
·
Lower initial investment
·
Insurance, maintenance and similar tasks are
handled by the owner.
By keeping all the factors and pros of each option in mind,
you can decide whether renting or buying heavy equipment is the right choice
for you.