Depending upon your specialty in the area of construction, you are likely to have one or two pieces of heavy equipment that are used the most. If you are at a point where you need to replace this equipment, you will be faced with the choice of buying, leasing, or renting. For commonly used equipment, the best option is usually leasing the equipment. Here are a few reasons why this is true.
It frees up cash for your business
Having enough cash to see your project through to the end is an essential part of success in the construction business. Any time you buy your heavy equipment, you are committing a lot of cash. It is true that you can finance your purchase, but you will need a large down payment upfront. When you lease your equipment, you will still be making a monthly payment, but you won't need as much money to start your lease.
Some companies offer buying options
Some construction equipment leasing companies will offer a buy option in the leasing contract. This can be a good option if you realize that owning your equipment may be a good idea. Leasing gives you the chance to realize this, and when you exercise the buying option, you will be purchasing a used piece of equipment that you are familiar with. Although you will not be taking advantage of the latest technology, the machine you have been using may be good enough for the job.
It is cheaper than renting
Certainly, there is little commitment to renting over leasing, but renting is a better option for equipment that you don't use frequently. This is usually in the time frame of a few days. Renting is the most expensive option, so it doesn't make sense to rent your most commonly used heavy equipment.
With leasing, you can take advantage of new technology
There are technological improvements that occur in the design of new heavy equipment. This technology can make your business more productive. Any time you lease your equipment, once the lease is over, you can upgrade to a new model with better technology. When you buy equipment, you are making a long-term commitment unless you want to sell it early. But like most heavy equipment, it will likely be worth less than what you still owe the lender.
If you have a piece of heavy equipment that you use frequently, and you will be using it over a long period such as a year or more, you need to consider leasing it. You will take advantage of the latest technological features without making a commitment to buying the equipment. A lease will also save money on a large down payment and be cheaper than renting.
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