Renting Vs Buying Construction Equipment – How to Make a Decision

datablog-dozer.jpgIndia is expected to witness USD 1 trillion infrastructure investment as per the planning commission of India for the 12th Year Plan (2012-17). Typically, infrastructure development is the main growth driver for the construction equipment market (both new and used equipment).

As huge construction activities have been taking place in highways & roads, ports, railways, aviation, waterways, housing and commercial real estate sector, and this lead to the demand of construction equipment in the country.

By keeping their budget in mind, contractors invest in the equipment used for various types of project, here role come to decide which equipment to buy or rent to minimize the cost. Usually all contractors do not have every type of construction machine which used for different construction work. For example, equipment used for road construction may not be as effective as in other projects or may not be used for building construction, so buying such a costly construction equipment is not feasible option.

Various contractors and infrastructure companies are working or to begin work on various infrastructure projects so they may require equipment to start their projects.
So some of them may be planning to buy new equipment and some of them thinking to rent the CE, so here we will discuss how to take decision while buying or renting construction equipment and which is the viable option for their business perspective.

Benefits of Renting Equipment:

  • Renting construction equipment will reduce project cost for small projects for small players.
  • Contractors or companies can rent different equipment for different usage.
  • Renting give freedom to access all equipment.
  • After the project completion, no burden of maintenance and repairing of the machine, which save the maintenance and repairing cost.
  • These days, very frequently advanced technology is being introduced, in that situation old machines goes outdated, but one can rent any advanced machine whenever he/she can wish as per the requirement.
  • Renting the equipment save huge capital investment.
  • Heavy equipment requires enough space for storage, renting can eliminate the storage cost.
  • Renting the equipment gives freedom to developers or companies to try the equipment before buying it.
  • Renting save your transportation cost, for example a Mumbai based developer gets a project in Kolkata; developer is free to hire the equipment from a nearby location and save the cost of transportation.

Benefits of Buying Equipment:

  • Renting is a viable option for short term project, but buying is better than renting for longer projects, it will save the cost.
  • Some equipment in construction field which are multipurpose like excavators, forklifts, loaders, skid steers, cranes, trucks, etc., these can be used for various purposes, so renting these machines is not a wise decision.
  • When you own the equipment, it is available with you all time and can be used whenever needed, but to rent you have to depend on renting company, some time you may not get it when you needed the most and projects might get delayed.
  • Buying is the good option because rental price may go up suddenly due to rise of demand.

Hence, after looking at the benefits of both renting and buying (new and used) equipment, it will be prudent on the part of every equipment owner to consider both the options before taking a final call.

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