A BRIEF PRELUDE: While I’m not certified in construction or a construction expert in any way, in this section I’ll be giving my personal advice based on experience working as a freelance construction worker. I’ve also successfully remodeled my house so I’m able to give an outlook about construction from a “build your own” point of view. Feel free to give me your tips and thoughts in the comments.
The decision to purchase new heavy construction equipment is a big undertaking, and it’s understandable that you may be hesitating over whether to go new or used in this economy. Obviously, used equipment will cost you less, but is the cut in price worth it? Rented equipment is a safe bet for risky times, but sometimes a bigger purchase is worth the cost to avoid continually paying the rental fees.
Faced with all these options, it can be difficult to make a decision you’ll be happy with in both a practical and financial sense. Keep reading for the pros and cons of new and used equipment to guide your decision-making.
New Equipment: Paying a Premium for First Dibs
New equipment is nice; you get the most up to date models and the assurance that your machinery wasn’t mistreated by its former owner. The newest models are highly technologically advanced and state of the art, not to mention that newer machines are almost always more fuel efficient. Fuel alone can be a great money saver if it’s the difference between a new model that is more environmentally conscious than ever before and a five-year-old model that guzzles gas like no tomorrow.
However, new equipment comes with an expanded cost. You will, without a doubt, pay the highest price for new equipment, and often in a lump sum. Can your business handle that kind of expense right now? If not, maybe rental or used equipment is the way to go.
Rental Equipment: Low Risk, High Cost
The obvious advantage of rental equipment is you never have to make an all-at-once purchase—instead, you pay as you go. This is a great option for new or struggling businesses, which most likely do not have the capital to make a huge purchase. It provides a quick way to get off the ground.
However, renting is not a long-term solution. If you intend to keep the piece of equipment for a number of years, it’s probably best to start out renting for a few months, then making a purchase. Maybe, though, used equipment is the path you should consider.
Used Equipment: A Real Bargain
Although you’re obviously not getting a new machine, used equipment has the distinct advantage of prices being standardized and available amongst older models. This means you can comparison shop on used equipment before ever heading out to the dealership and starting to bargain. This level of predictability makes it a lot easier to consider your budget while making a purchase.
However, as mentioned before, older models can be thirsty for gas. You will also most likely endure more downtime for maintenance and repairs. If this doesn’t faze you, though, and you have the capital for it, buying used is the way to go.
The choice between new, rental and used construction equipment can be a tough one, since each situation has clear advantages and disadvantages. Whether you are filling your fleet or starting a new one, hopefully the pros and cons listed above will help make an informed decision.