Despite a continually improving economy, you may not be in a position to expand your fleet through a cash purchase or traditional financing methods. If you don’t have a consistent need to justify investing in heavy construction equipment, it may be beneficial to rent crawler or wheel excavators, wheel loaders and articulated dump trucks. Rental has served the needs of business owners through bear and bull markets, and this solution continues to provide the opportunity for ownership at project completion.
Equipment dealerships and rental stores have created rental fleets and supporting resources to provide contractors with solutions for short-term project needs. Rental arrangements allow access to the newest and most advanced models of equipment while significantly reducing operational costs and eliminating storage and maintenance requirements. Plus, there are clear benefits to utilizing the expertise of dealership staff members who are trained and well-versed on new Tier 4 technologies, as well as attachment connection systems, quick couplers and auxiliary hydraulics.
One of the greatest benefits of renting is the opportunity to learn more about a manufacturer and get comfortable operating less familiar machines to help determine if they’re a good fit for your applications. If you need a temporary addition to your fleet to accommodate certain projects, but still want the flexibility to pursue eventual ownership, consider these five reasons to rent for fleet expansion.
1. Short-Term Projects
Rental may be the best equipment option when taking on new projects that are shorter in duration. If a permanent purchase isn’t required or can’t be justified, rental equipment can supplement an existing fleet and provide a temporary solution without the additional responsibilities of ownership. Another key advantage of rental for short-term projects is that established rental rates help contractors budget equipment expenses for a particular project with greater accuracy.
2. Business Expansion
Rental equipment can help companies expand services to secure work that may have previously been subbed out. Likewise, a well-paired attachment or an additional dedicated excavator or wheel loader can stretch fleet resources and help make your operation scalable and adjustable to changing markets.
For example, if you’re an excavation contractor who only digs footings for commercial construction, you may be missing some profitable expansion opportunities. Renting an excavator with a clamp attachment would allow you to bid land-clearing jobs, and a hydraulic breaker can help you compete for demolition projects. In cold-weather climates, a wheel loader with a snow pusher can be the first step toward building a snow-removal niche to supplement your traditional construction business.
Rental provides an opportunity to access larger, smaller or more specialized equipment and attachments than an existing fleet may offer. As often happens, a larger excavator or wheel loader that is needed for a road-building project may be too large to maneuver effectively on a commercial building site. Attachment versatility for heavy equipment can provide the ability to adjust to changing markets and applications. When budgets are tight, it’s typically easier and more cost-effective to rent attachments to complete a special job or offer a niche service than to rent a separate machine.
Crawler and wheel excavators are ideal candidates for attachment integration, which can help owner/operators build a custom fit to complete projects far beyond just earthmoving. Attachment connection systems and auxiliary hydraulics allow many sizes of excavators to be extremely effective tool carriers for a wide variety of attachments. Wheel loader-specific attachments have also turned these heavy-duty machines into valuable assets for every season.
4. Maintained Machines
With a rental contract, your business can complete projects without the additional expense of servicing a machine beyond routine maintenance intervals. The cost savings can be especially beneficial in this age of emissions regulations. The majority of new equipment entering the market has been engineered with engine after-treatment systems designed to clean diesel engine exhaust and meet the EPA’s emission standards for interim Tier 4- and Tier 4-compliant engines. Rental fleet ages are dramatically low across the country, ranging from 12 to 48 months. Dealerships and reputable rental firms will only rent modern and efficient equipment to achieve greater customer productivity.
5. Purchase Option
A rental purchase option (RPO) can be structured to transfer a portion of the rental fee toward purchasing the machine. This may be a favorable option for businesses that have short-term needs that turn into long-term solutions. Although heavy wheel loaders and excavators can be rented for a shorter term than loan or lease alternatives, the trade-off is generally higher rental rates.
It is important to decide up front whether the eventual purchase of a machine is in your future. If so, you need to structure the RPO contract accordingly, or at a minimum start a dialogue with your sales or rental representative about something in the rental world known as the crossover point. You need to determine and monitor the crossover point at which you’ve built enough equity in a machine through a rental contract that you could effectively lower a rental payment by exercising an RPO.
Equipment rental has become one of the most accommodating options for businesses needing to expand fleets in a financially responsible manner regardless of economic conditions. The more you know about the multiple advantages of rental, the quicker you can make a sound decision that leaves the door open to future ownership that your business can sustain.