One of the biggest dilemmas that many contractors find themselves in is whether to purchase equipment up front or consider equipment hire. There are many factors to consider when making this decision. Cost is, of course, a major factor. But over and beyond cost, contactors also need to determine which option ends up providing the most return on day-to-day operations, overall efficiency, maintenance and upkeep and even storage.
Contactors of all sizes and industries should find it easier to make this decision when looking at the benefits offered by equipment hire. More often than not, this option ends up offering far more value in the long run, in costs and in time savings, productivity and many other areas too.
Is Equipment Hire More Effective Than Ownership?
What are some of the benefits of equipment rental, and how do these benefits help contractors in their daily operations? Let’s take a closer look…
- No maintenance and upkeep required. Equipment used on sites requires a great deal of upkeep in order to remain in good working order. When this equipment is rented rather than owned, the upkeep falls to the rental company rather than you as a contractor. Equipment often requires inspection and testing as well, which is another thing that is covered by a rental provider when hiring. Owning equipment on the other hand requires all maintenance, checks and testing to be done by the contactor – something that takes time and effort.
- No storage required. You may be surprised how often storage is not considered when buying equipment – especially in the case of large, bulky and heavy items that are not too easy to store. Not all equipment can be left out in the open, and in the case of very large and heavy equipment, special facilities may be required for safe storage. Not many contractors have the luxury of warehousing facilities or large premises that can easily store equipment, but equipment rental companies on the other hand do have this type of capacity.
- Easier transportation to site. Another logistical issue to consider is how your equipment will be transported to the project site. If it is smaller tools, this will not be too much of a headache. But in the case of heavy or large sized machinery or items, you will need to transport the item from storage to the site, and then back again. This will mean the need for a freight carrier or drivers, or special vehicles, depending on the type of gear being transported. When renting however, the provider takes care of transportation, making sure that the equipment arrives on site on time, and that it is returned again after use.
- Better use of time and labour. Time and labour costs are very often hidden costs that sneak up on contractors. Things like storage, transportation and maintenance are not always considered when deciding whether to purchase or hire various tools. All too often, contractors only think of the immediate costs involved. Labour and time are not thought of until they start to become an issue. Some contracting companies have even found that they have needed to set up an entire department that focuses exclusively on equipment fleet management. Renting on the other hand takes away almost all of these issues, leaving you with more time and more hands on deck.
- Better cash flow. Of course, the bottom line is affected in this decision, too. For large companies, it does not affect margins too much when purchasing new equipment. For smaller companies and private contractors however, these costs can often be a huge barrier to enter the trade. Not all gear is needed all the time – renting the things you need when you need them works out far more cheaply than purchasing an item that you will not need to use every day. In this way, you will have all the tools you need at any given time, without the hassle of storage and upkeep.
Ultimately, the decision can only be made by each individual contractor. Often, it will come down to which option works out best for specific needs of the contract. For most however, the decision to go with equipment hire ends up having far more value in both short and long term, making this decision well worth a proper consideration.