47
JULY-AUGUST 2014
ACCESS, LIFT & HANDLERS
GUEST COMMENT
Rent vs. own
are using the equipment less than 60
percent of the time, renting is your
best option.
When taking into consideration the
overall cost of purchasing and owning
equipment, you’re at risk for higher costs
due to overall maintenance; repairs and
downtime cost money, transporting to a job
and government compliance are all additional
costs. This is why, if you are planning on
purchasing equipment, it’s important to take
into consideration new Tier 4 engines.
Tier 4 is already in government compliance
and can reduce fuel costs over a period of
time. But, something to keep in mind about
new Tier 4 engines is they cost more due
to engine design, build and installation,
government requirements, as well as fuel and
fluid costs. However, the new Tier 4 engines
use less fuel and take diesel, which overall
costs less.
So, how do you calculate whether or not
owning is the right decision for you? A simple
formula can be applied when considering the
purchase of construction equipment; the cost
of the equipment over the number of years
you will keep it. Essentially, you are paying
for every hour you have the equipment in your
possession, whether or not they are in use. If
you think your equipment will spend most of its
time sitting on a lot, then you should consider
renting.
Weighing costs
Renting equipment can be beneficial over
purchasing because you are eliminating many
financial risks associated with ownership. Not
only are you not responsible for maintenance
and costs associated with financing, but you
can also keep up with industry trends by
renting the latest technology, such as Tier 4.
And when renting equipment
from a rental company, costs
are usually lower because the
company purchases equipment
in bulk, allowing consumers
to rent at a lower rate. This
Steve Michaels
, vice president
of fleet operations at
Neff Rental, weighs in on
whether it’s smarter to rent
or own equipment with
Tier 4 engines.
is beneficial when a project requires specific
equipment because fleets are usually in stock.
Rental companies often have easy access to
what’s available online, and a consumer has
access to inventory through online stores.
This helps keep track of what’s in stock and
availability for your specific project. You can
rent in advance so you are guaranteed the
equipment at the time of your project.
We all know how hard it is to stay on
a budget. But when you’re dealing with
construction projects, many factors play a role
in purchasing and renting decisions. The best
bet is to sit down with your finance department
and weigh out the options. Remember, buying
is a great decision if you are going to be using
the equipment up to 60-65 percent of all
projects. But, if your equipment is going to sit
on a lot, you’re better off renting equipment as
needed. Also, by renting Tier 4 engines with
lower emissions, latest technology, and low
risk, you are able to pick and choose from the
rental fleet per project.
■
A John Deere
engine.
Tier 4 engine-
equipped machines can
be cheaper to rent than buy,
depending on utilization.
“Prior to renting or purchasing equipment, see if the
project scope calls for Tier 4 diesel engines to be
used. Tier 4 engines use Diesel Exhaust Fluid, which
costs less than fuel and decreases the overall costs
related to consumed fluids.”
Steve Michaels, vice president of fleet operations at Neff Rental
M
aking the right decision for your
business doesn’t come easy. With
ample research and crunching
numbers, we find that making the right
decision – that will ultimately save versus
waste time and money – can be tricky. So,
when it comes to construction equipment, do
you prefer renting or owning?
The trend over the past several years has
increasingly leaned toward renting construction
equipment. Especially during the recent
recession, many consumers found cost benefits
in renting versus owning. I’d like to dive in to
weigh out the cost benefits of each.
Project scope
Whether you are the distributer, rental agency
or contractor, there are many questions
you should ask yourself before renting or
purchasing any construction equipment. Things
to consider: What type of project, length of
time, cost of fuel, cost of maintenance, will
you utilize the equipment for later use, what is
the resale value when purchasing, etc. If you
