Equipment rental has been on the rise in recent years, and this trend is expected to continue in the foreseeable future. The American Rental Association (ARA) forecasts a 9.2-percent increase for construction and industrial equipment rental in 2012 and an 8.9-percent increase in 2013. All signs indicate that construction professionals are seeing the benefits of using rental solutions to maximize efficiency, reduce costs and increase profitability.
Owning equipment can be restricting for construction professionals, particularly in today’s economy. Regardless of how an equipment purchase is financed, it limits the amount of cash available for other business purposes, affecting balance sheets and future borrowing potential. Conserving capital has its advantages.
Many companies will opt to own equipment that they know they will use frequently and for a long period of time. However, companies that do so should also consider total ownership cost. If the organization is not prepared to maintain the equipment efficiently, high hours of utilization can result in high maintenance costs that may not have been considered at the time of purchase.
Of course, if equipment isn’t used frequently enough, the return on the capital investment will take years to recover. Another trap is utilizing a purchased piece of equipment to make do rather than having the exact piece of equipment you need for the job. Renting can provide you with the right piece of equipment at the right time to increase efficiency and speed.
Insurance costs should also be considered. When new equipment is added to a fleet, insurance costs for the organization rise. Along with simply adding to the assets that must be insured, newer equipment is at a higher risk for theft, which causes premiums to rise.
Storage costs are another consideration. These costs increase when businesses buy new equipment. With renting, such overhead is diminished.
Additionally, when construction professionals rent equipment, they have access to the latest technology available in the market, as rental companies replace their core construction fleets frequently to ensure that they adhere to the latest standards. Rented construction equipment is also typically equipped with the latest safety features.
Rental companies do not only carry the latest equipment; they also carry a wide variety of products, enhancing fleet flexibility. It’s not an easy job to predict when projects will be awarded and how multiple project schedules will mesh when managing a construction business. Supplementing a core fleet with rental is an optimal way to grow the number of projects and capture new business while conserving capital.
Rental professionals provide helpful tips and information along with securing the right tools for the job. They also give instruction for safe operating procedures and can equip construction professionals with the necessary personal protective gear to help keep everyone on the project safe.