Deciding When to Rent or When to Buy Your Cat® Equipment
It’s funny how the same dilemma can creep up when you’re planning to watch a movie at home and when you’re planning to expand your construction business: do you buy or do you rent?
You might be looking into expanding your fleet for any number of reasons. Maybe your primary workhorse just kicked the bucket. Maybe your business is expanding and your current fleet can’t handle it. Or perhaps your workflow would simply be a little smoother if your machines weren’t spending so much time under maintenance.
When you get to the point where you’re thinking about expanding your fleet, you’re going to face a question: is this a temporary need or a permanent one?
This can be an exceptionally difficult question to answer because you can’t see the future. And despite our best plans, something could go awry. In other words, it’s good to have options, and obtaining a new loader, dozer or excavator is no exception.
Considering Construction Equipment for Rent
You basically have two options when it comes to procuring new equipment. You can buy equipment, in which case you’re the whole owner and responsible for all facets of its operation, minus whatever the warranty covers. You can purchase new or used equipment, each of which has its own pros and cons.
Or you can rent your equipment. When you rent, some of the maintenance and service costs are defrayed. When you rent construction equipment in North Carolina from Gregory Poole Equipment Company, you’ll have no service costs. This means you’ll basically be paying for fuel in the tank.
But there are some drawbacks to renting, as well.
The simple fact of the matter is that renting a machine and buying a machine are both situational choices; one is not universally better than the other. But making the right choice at the right time will save your company money and could keep your business thriving.
When to Rent – The Obvious Cases
Sometimes the decision to rent can be relatively obvious. If you’re expecting short term growth – for example, if you have a big project that must be completed on a short timeline – but expect to return to slower levels afterwards, renting seems to be the smart move. You won’t be saddled with machines that sit idle or excessive payments that stack up during down time.
However, Cat equipment rental may be an appealing option in other situations as well. For example, maintenance can be an expensive part of running any business. If you have only a few vehicles, devoting a large percentage of your revenue to maintenance may not be wise. Renting your vehicles and taking care of the complimentary service that accompanies it may make more financial sense.
When to Rent – In More Depth
Additionally, it’s important to understand how renting affects the financials of your company. Yes, you’d rather be thinking about digging out that foundation than sorting out your red ink and your black ink. But a decision to rent or buy can have a direct impact on your financial flexibility down the road.
For example, maybe your business is experiencing an unusually fluid period of time. You have strong potential for growth, but you’re waiting for opportunities to solidify. In this case, renting may be the way to go because it grants you a certain amount of flexibility down the road. This flexibility can be hugely important because if those opportunities don’t pan out, you haven’t put yourself in an untenable situation. But if they do pan out, you’re ready to hit the ground running.
When to Rent at a Glance
These suggestions are by no means meant to illustrate every possible instance when renting might be the better choice. These examples do, however, illustrate that the decision to rent is not always cut and dry. It can be a complicated decision, especially if the decision to rent construction equipment is not your first instinct. There will always be a gray area.
It might be a good time to rent if:
- Your next project is bigger than usual
- You anticipate quick, but relatively short-lived, growth
- You want to be well positioned for growth, but want to have capital flexibility
- You don’t want to incur maintenance costs
- You’re unsure of the investment you want to make in your next machine
- You want to cut down on transportation costs
- You want to cut down on your taxes
Benefits of Renting
- Financial: When you rent, you’re protecting yourself from the bumps and shocks of the unexpected. Usually, you’ll know what your monthly expenditures will be with few surprises. If you need a dozer one month but an excavator the next, but you don’t have the finances to have both on board permanently, renting gives you the flexibility you need to get the job done. You may also receive reduced taxes when you rent because you don’t have to pay the tax of owning the vehicle.
- Service: When you find Cat equipment for rent from Gregory Poole Equipment Company, you’re getting service included. This means a drastic reduction in the basic maintenance you’ll have to perform on any of your Cat equipment. If you’re looking to rent construction equipment, you won’t get a better deal. And it can save you substantial maintenance costs.
- General Jobsite Flexibility: When you buy a machine, you better know you need it for a long time to come. That’s not necessarily the case when it comes to construction equipment for rent. Cat equipment for rent and rental plans give you the option of using a small track dozer one week and a heavy wheel dozer the next. This offers you flexibility in the jobs you take, especially if you’re a smaller company. Renting construction equipment also grants you flexibility in the transfer and movement of that equipment.
When to Buy – The Obvious Cases
In some cases, you’re ready for the long-term investment. You know you’re going to need a dozer or a loader, and you know you’re going to need it for the long haul. You’ve already got maintenance infrastructure in place and one more machine – or a replacement machine – is simply going to utilize that existing infrastructure. In this case, the decision to buy Cat equipment makes a lot of sense.
This decision will obviously depend on your business models and your jobsite needs. For example, for some businesses the decision to purchase a light loader or lift will be an easy one, due to the cost effectiveness of such a product.
On the other hand, sometimes you need a machine for a long-term job and you have the money on hand or you have financing available. In these cases, buying is the easiest, and most obvious, way to go. Your business can handle it, and you’re in a good position to buy Cat equipment.
When to Buy – In More Depth
There’s some definite nuance to this decision, especially considering the financial side of such a purchase. After all, whether it’s financed or paid for up front, a piece of heavy machinery is an investment; it’s a physical asset. Sometimes this can be a positive aspect from a financial point of view.
Additionally, owning a machine means that, although you’re responsible for every aspect of it, you can also do whatever you want with it. This includes branding the machine or using the machine for parts to repair other equipment. We recommend buying used if this is part of your plan.
Likewise, if you buy construction equipment in North Carolina and suddenly get a job in New Mexico, there’s nothing to stop you from crossing state lines, assuming, of course, that you’ve filed the necessary paperwork.
There’s a certain amount of freedom involved when you decide to purchase a machine. And many business owners believe that freedom is worth all of the responsibility that comes with it. Renters have to cater to a wide audience, so if your job is on the unique side – which then requires a unique machine – you may not find that machine particularly easy to locate in rental inventories.
Another great time to buy construction equipment is when a machine you already have has called it quits. Replacing an old machine with a new one is smart because you know there’s steady demand for whatever that machine does and you’re swapping the high maintenance costs of an old machine for the low service costs of a new machine. This makes a lot of financial sense.
When to Buy at a Glance
There are some concrete advantages when you buy Cat equipment. But at the end of the day, it comes down to your financial position and your business’ future needs. Accurately anticipating these needs will ensure best results.
Buying might be your best option if:
- You need to customize your equipment
- You’re replacing an expired piece of equipment
- You’re relatively certain about your ongoing need for this piece of equipment
- You’re looking to invest in a long term solution
- You have capital you’re looking to invest
- Your business has a need for solid assets
Benefits of Buying
- Security: Buying is a great way to ensure financial security. Purchasing a Cat machine gives you an asset. This asset that will make you more productive. You can also leverage to improve your profitability down the road. In many cases, purchasing construction equipment for sale can give you some solid footing for years to come.
- Replacement: In the construction business, it pays to keep your fleet at full strength, so when one of your machines reaches the end of its lifespan, purchasing a Cat machine makes a lot of sense. This allows you to keep your fleet at full strength and, at least in the short term, lower your overall maintenance and fuel costs.
- Branding: Purchasing a new dozer or front loader allows you to take total control of the vehicle. This means you can paint and mark the decal to fit your branding needs. It also means you have total freedom to treat and augment the vehicle any way you see fit. For example, if you need to make modifications to the vehicle to achieve a particular purpose, purchasing may be the best way to go.
How to Make the Choice Between Renting and Buying
With benefits to both renting and buying, it can be difficult to decide which direction is best for your company. This may be especially true if you’re not entirely certain about your future needs. The construction business, after all, can be a volatile industry. It’s important to emphasize that there is no one right way to proceed. Renting is not inherently better than buying, and buying is not inherently better than renting.
The beauty of this system is that you have options. If you decide to buy construction equipment in North Carolina at Gregory Poole Equipment Company, you can rest assured that you’ll receive the help of excellent technical expertise and a product support plan. In other words, Gregory Poole helps you protect your investment.
The decision to rent or buy comes down to your long-term plans. If you’re uncertain whether you’ll need the equipment in the long term, renting will be your best option. But it’s important to keep in mind that this is often the nature of the construction business. Sometimes, you can’t be certain of work until contracts are signed, but you still need to show your capacity to accomplish a given project. Renting equipment gives you that capacity.
It also allows you to be flexible in terms of completing a project on a given timeline. More equipment means a faster pace. At the same time, renting equipment can become cost prohibitive on a longer timeline. And when that’s the case, it simply makes more sense to purchase the equipment. Doings so gives you security and certainty when it comes to monthly payments, interest payments and maintenance costs.
Gregory Poole Can Help You Get the Equipment You Need
If you’re looking to rent construction equipment in North Carolina, buy construction equipment in North Carolina, or you simply have no idea what your business needs, we can help.
Gregory Poole Equipment Company has over 60 years of history assisting a variety of companies with these types of decisions. We know what it takes to get going, and we know what it takes to keep you going.
And that’s one of the primary benefits you receive when you choose Gregory Poole. We offer a wide variety of high-end, durable equipment, including a big selection of Cat machines, for purchase and for rent.
Whether you’re looking for a long-term investment in a purchased Cat machine or looking for the flexibility you get from a rented piece of equipment, Gregory Poole has a robust product support system to ensure your machine will get the job done.
There are advantages to buying and advantages to renting. We want to help you make the right move for your business. So if you’re interested in operating a new piece of Cat machinery, get started today. Contact Gregory Poole Equipment Company or request a quote .