Renting vs Buying and the Sharing Economy Boom

Buying for your business can be an expensive and risky game. While owning your own equipment may mean that you have consistent availability and convenience, large down-payments or high monthly payments can put a strain on your company’s bank account. And unless you’re using your purchases consistently the whole year round, you may be incurring unnecessary costs.

Most companies do not have the resources to buy expensive equipment outright, with, according to CostOwl, items such as your average excavator costing a minimum of $100,000, which means that owners will often be required to take out business loans, which invite headaches such as interest payments and account fees.[1] Not to mention there’s the issues surrounding storage, transportation, as well as repairs and general maintenance costs. With insurance costing on average $12,757 a year, and storage on average of $15,000 p/a, and factoring in general maintenance, it is estimated that the average annual cost of running a construction machine that is in use 10 hours a day, 6 days a week, can be as much as $294,165 per annum per machine.[2]

These expenses can add up quickly and can be a drain on your greatest resource: Time. As a business, time is your most important asset. Time is Money. You could be saving yourself valuable time from having to organise and navigate around these road blocks. Would your company be financially equipped to deal with a costly repair on machinery in time to complete a project? If the answer is yes, then perhaps purchasing your own equipment would be a viable option for you, but if your answer is no, you might want to consider renting.

Research from P2P lender RateSetter’s recent report titled the Sharing Economy Trust Index (SETI), states that 68% of Australians now spend and earn money through the sharing economy and “an estimated 10.8 million Australians are set to earn extra money from sharing economy services in the next 6 months, representing roughly 60% of the nation’s entire working population”.[3] Renting equipment for your business rather than buying, buoyed by the tech industry, has increased in popularity exponentially. More often than not, renting business equipment can prove to be a much more economical option, particularly for small business owners. Rental companies alleviate the issues of committing to large payments or finance loans, and take the weight off the shoulders of both the leaser and the leasee. And if you decide that buying is still the way to go, you can always try rental first, to make sure that what you’re getting is the right kit for you. It also means that if you do buy, or if already own equipment that is standing idle at certain times in the year, that that equipment could be paying for itself, or even earning you extra revenue.

Companies like Mobilise, a “first of its kind” in business to business property rental, provides cover for equipment hire, as well as general liability for owners, and complimentary for users, offering theft and damage cover up to $50,000, and general liability up to $20 million during the hire period. This means that you could save yourself a lot of time, worry and cash by simply renting your equipment through companies like Mobilise.5

With the shared economy business model growing explosively, and looking to increase further yet, (with “three quarters of Aussies intend[ing] to use a sharing service in the next six months”) buyers and renters alike are reaping the benefits sharing tools, equipment, even work space.[4] This rising communal attitude to business is a positive leap in the right direction and with the aforementioned encouraging outcomes attributed to leasing; it’s not difficult to see why. So whether you’re an owner or are in two minds about whether to buy for your business, give renting a try.

Companies like Mobilise, a “first of its kind” in business to business property rental, provides cover for equipment hire, as well as general liability for owners, and complimentary for users, offering theft and damage cover up to $50,000, and general liability up to $20 million during the hire period. This means that you could save yourself a lot of time, worry and cash by simply renting your equipment through companies like Mobilise: www.mobilise.com

[1] <http://www.costowl.com/b2b/excavator-new-cost.html>

[2] <http://www.freightmetrics.com.au/Calculators/MachineCalculator/tabid/366/Default.aspx>

[3]Sam Bloom, ‘2 in 3 Aussies use shared economy (Uber, eBay, Airbnb, and more)’ February 15, 2017

[4] Ibid