When To Buy or Rent Heavy Equipment

The choice between purchasing versus renting heavy equipment it is not one to take lightly. There are a lot of important factors to consider and what will work for one company definitely will not work for the other. Let’s take a look at both propositions and see how they’re best suited.

RENTING HEAVY EQUIPMENT

Initially, renting heavy equipment seems like the no-brainer solution. You only have to pay for the period of time you have the equipment, and maintenance costs are included as part of the rental agreement. Renting also makes a lot of financial and logistical sense when you need a specialised piece of hardware for a short period of time. After all, there’s no sense buying one piece of machinery if you only need it for a few weeks, even if you plan on reselling it down the track. Renting also gives you the flexibility to access the latest equipment quickly.

However, there are downsides to renting that need to be considered. Unforseen delays in your project can result in extended rental times, blowing budgets out considerably. If you rent for a considerable period of time, you may well have been better off by purchasing your own equipment for sale later.

PURCHASING HEAVY EQUIPMENT

While the outlay for buying heavy equipment may be considerable, there are definite advantages. For example, owning a machine outright, especially a multi-use one such as a forklift or excavator gives you the freedom and flexibility of knowing you always have the right tool on hand at a moment’s notice.

On the other hand, purchasing means you are also responsible for maintenance, insurance and other incidental costs that come with owning your own equipment. Take the time to see what these will be and plan accordingly. Also, buying specialist equipment you may not need all the time should be considered carefully.

OPEX V CAPEX

Of course, your decision will ultimately be influenced by the type of expenditure your company is comfortable with. Opex, or operation expenditure, is the day-to-day costs of doing business, and a company with a healthy opex balance is well suited to rent equipment. Capex, on the other hand, relates to capital expenditure and describes the company’s ability to purchase new equipment for long term gains. No matter which way you decide, the rule still applies: it’s always a good idea to keep your accountant happy.

Resolute Equipment has a wide range of heavy mining equipment for sale, along with the right parts and attachments for your next job. Contact us today to find out more about how purchasing machinery can work for you.