Masonry Magazine November 2005 Page. 26
Buy, Lease or Rent
Of course, renting has its disadvantages as well. Although renting frees up capital to be used in other ways, your business does not build equity on the equipment. Also, some argue that, unlike owned equipment, rental equipment is not configured and ready for your crew's use at a moment's notice.
Crunching the Numbers
To better illustrate the various factors and advantages of renting or buying, it helps to look at the numbers.
For example, in the case of a new skid steer, let's figure the average purchase price to be $19,500. Then add taxes, insurance and interest on any loans necessary for the purchase. Next, consider ongoing regular maintenance - for a skid steer, this can include drive chains, pivot points, other moving parts, brake oil, filters, tires and more. Many manufacturers recommend maintenance every 40-50 hours of operation. Finally, include storage, a truck and trailer, a driver and other travel expenditures.
Assuming a conservative equipment usage life of five years, the cost comes to about $10,000 a year for owning that skid steer.
Although renting frees up capital to be used in other ways, your business does not build equity on the equipment.
Now compare these figures to some typical renting scenarios. For most jobs that require a skid steer, most users do need it at the project site for more than seven to 10 days.
Based on standard rental rates, you can order the exact skidsteer you need and have it delivered right to your site for about $500 a week. Even if you need the machine longer and it ends up costing $1,000, renting is still more economical if the equipment isn't needed very often.
"It's just not cost-effective [for us] to own," says Barry Reeck, general superintendent of Weis Builders Construction Company of Minneapolis, Minn., whose company has been renting equipment for 20 years. "Our rental company provides us with the equipment we need, when we need it - near-new, well-serviced equipment."
Reeck adds, "It's a big benefit to us."
Finally, the decision to buy, lease or rent carries many variables. One type of equipment and the variables that exist may lead you to choose one option, while another piece of equipment and its variables may lead you to choose another even within the same company, same timeframe and for the same job.
So the next time you need equipment, make some phone calls and evaluate the available options. It could make a big difference on your bottom line.
Clay Allen is director of communications for RSC Equipment Rental, headquartered in Scottsdale, Ariz. He can be reached at (480) 905-3300 or clay.allen@rscrental.com.