SHOULD I HIRE OR BUY CONSTRUCTION EQUIPMENT?
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The decision about hiring versus buying needs to be based on a range of factors, like how soon the machine is needed and how often it’s going to be used.
When to rent
Renting from a machinery hire business can be a simple option to quickly get a machine up and running in your business, particularly if you will only use the machine occasionally or for a short while.
It’s also a great choice for businesses entering new sectors of the market, or for operators who have projects far from their main site, where the transport of machinery can be managed by the rental agency. It can also be a good alternative for customers who need updated equipment to secure new contracts, but may not have the cash flow to buy a new machine outright.
Other benefits of renting include a lower initial outlay and lower risk to business operators who are not certain they have a steady stream of work ahead.
In general, renting from a hire company can be an ideal option for short to medium term, one off or remotely located projects.
When to buy
For businesses that need flexibility about when and where they use their equipment, or those that anticipate using their machines for a longer period, buying outright can be a good choice.
Buying a piece of equipment outright does give you control. It can also add up to a lower lifetime cost compared to renting even though the initial cost is greater, and it means you’ll have an asset to sell or trade when you’re ready to upgrade. Buying brand new also means you can choose the exact specifications you need and be sure you have access to the very latest models and features.
Ownership does come with the responsibility to manage repairs and maintenance but this is not a barrier for many customers.
Lots of larger businesses have their own workshops and those who don’t can get excellent support from a good dealership. Just as it’s important to consider the support you get when you rent, it’s worth looking at the after sales support you’ll get when you buy.
Making the choice
Deciding whether to hire or buy is a serious business decision, with both choices coming with tax and cash flow implications, so get advice about the best way to proceed.
It’s worth talking to a financial adviser or accountant before you finalise a purchase or sign a rental agreement. Depending which approach you take to your business accounts, one option might have bigger benefits in terms of business cash flow or tax deductions.
Ultimately, what helps you succeed in your business is getting the right machine, however you choose to procure it. If you choose a proven brand and work with a trusted supply partner, you’ll be in a good position.