Cost of Owning vs Renting vs Hauling equipment

[MG84]

Lets discuss the costs involved with lesser used equipment. For my business this would be a larger excavator (80-130 size), vibratory pad foot compactor, larger dozer, etc. These are things that I really could use, but maybe not justify owning, at least not right now. Something like the excavator may see 200hrs/yr, a compactor less than 100hrs. I'm not opposed to renting equipment, but when I have to rent and pay to haul it becomes less appealing, both scheduling and money wise. United Rentals is our closest large rental outfit and they charge $500 ea way for delivery inside of 20mi. There are some local trucking companies that haul at $175/hr. I currently have truck/trailer that can legally haul 17,000lbs, I could upgrade trailers and haul 20,000lbs but that'd be maxed out for my trucks (F700/IH 4700) given the mountainous terrain and bad roads we have here.The way I see it I have three options:

1. Rent the equipment and pay to have it hauled. Pros: No extra upkeep or overhead, new equipment, I don't have to worry about break downs or maintenance. Cons: Costly for short term rentals, long term rentals are cheaper but I can't move equipment between sites myself, so I'm paying for pickup/delivery, plus moving from site to site. Scheduling both a rental and hauling and my jobs can be a nightmare. They are usually delivering with a tandem axle semi and 45-48' trailer, and are unable/unwilling to access some of my sites.

2. Buy heavier truck/trailer, rent the equipment and haul it myself. Upgrading just trailers doesn't net me much, might have to buy a single axle semi and the shortest drop deck/ramp style flatbed I could find. Pros: Fits my schedule easier, can move long term rentals from site to site, still get new equipment without the overhead/maintenance. Possibly better access to difficult sites. Cons: Cost and overhead of another truck.

3. Buy used equipment and pay to have it hauled, in this example something like a 130 sized excavator for $50-70K. Pros: Still easier to schedule just hauling vs rent and haul, can use it as much as I want, owning will probably grow the business more. Cons: Cost and overhead of the machine, maintenance, etc. Still have to arrange trucking.

4. Buy the equipment and truck to haul it. Not really in the cards, I'd probably be looking at $100-150K for this option and right now that just doesn't pencil out.

Curious what everyone else does with lesser used equipment. I know there are several guys on here that rent a lot, others who own a large variety of older equipment, some who haul themselves and others that pay to haul everything. Just looking for different perspectives and how it pencils out for your business. Thanks in advance.

 

[Shimmy1]

I'm just going to pick one thing here.

Rent vs. buy on the excavator. You say 200 hours per year. What will be the determining factor is how much will you spend on rent. Just stabbing blindly in the dark, I'm going to guess your cost per hour is going to be considerably higher than normal, because you're not going to rent it straight through. You're going to rent it for a week here, a week there, maybe you reach the hour limit, chances are not. If you can rent for an average of $50 per hour, at 200 hours per year, you will technically come out ahead, but you will never have anything to show for it.

 

[Truck Shop]

$175 an hour=2.90 a mile--with fuel costs, license, insurance--that's in the park of reasonable.
No point in buying a single axle--short wheel base tandem. But one has to remember trucks in
the construction business are a necessary evil.

 

[MG84]

I'm just going to pick one thing here.

Rent vs. buy on the excavator. You say 200 hours per year. What will be the determining factor is how much will you spend on rent. Just stabbing blindly in the dark, I'm going to guess your cost per hour is going to be considerably higher than normal, because you're not going to rent it straight through. You're going to rent it for a week here, a week there, maybe you reach the hour limit, chances are not. If you can rent for an average of $50 per hour, at 200 hours per year, you will technically come out ahead, but you will never have anything to show for it.

Just as an example, here are our local rates at United Rentals for a Case CX130D excavator:
$753 / day
$2,107 / week
$5,247 / month

By the time you add rental insurance, tax and all their BS fees the actual cost is about 15-20% higher. Then add hauling.

I try to rent by the week or month when I can, either for a big job or have several small jobs lined up that I can use the machine on. In the later case I'd have to move it from site to site also. If it's less than a week rental it just isn't worth the hassle, I'll just muddle through with my smaller equipment. Also, since I generally work by myself I almost never hit the hour limit, which does make my cost higher.

 

[CM1995]

We move our small stuff like CTL's, mini, trench rollers and small support items. If the job is close to our yard I'll move the small dozers and roller with our L9000. Trackhoe moves are hired out exclusively.

The jobs we do last at least 2 weeks and usually a month or more so it makes financial sense to hire out the heavy moves. The smaller stuff is easily moved with our pickups so that's a no brainer.

I think it depends on your business model and the customer base you work for. If you only have the occasional job for a 130 sized machine it's better to rent. Own what you use all the time and rent the ancillary.

On the flip side we use to rent mini-ex's from time to time until we bought a used 305. Now we use it all the time. Sometimes buying a piece of iron opens up things opportunities you didn't have before.

 

[MG84]

$175 an hour=2.90 a mile--with fuel costs, license, insurance--that's in the park of reasonable.
No point in buying a single axle--short wheel base tandem. But one has to remember trucks in
the construction business are a necessary evil.

Yes, a short tandem with walking beam rear suspension and full lock up would be perfect for what I want, but hard to come by around here and $$$. I also would need a very short trailer, 39' is the shortest I can find, 35' would be better. My thinking with a single axle was I could possibly stay under the 55000lb heavy use tax, and still have the capacity to haul a 120-130 size excavator, it'd be close though. Might have issues with rear axle weight on the tractor and/or traction issues.

 

[Truck Shop]

Might have issues with rear axle weight on the tractor and/or traction issues.

That's the concern, can be found just takes time, if you have it.

 

[Acoals]

I hate renting.

 

[MG84]

We move our small stuff like CTL's, mini, trench rollers and small support items. If the job is close to our yard I'll move the small dozers and roller with our L9000. Trackhoe moves are hired out exclusively.

The jobs we do last at least 2 weeks and usually a month or more so it makes financial sense to hire out the heavy moves. The smaller stuff is easily moved with our pickups so that's a no brainer.

Time on the job site is the part I'm trying to figure out. Sometimes the quick in and out jobs with big equipment can be big money, but renting/paying to haul kind of eliminates those.

I currently can haul everything I own from the mini ex/ctl up to the dozer and backhoe. The next step up in equipment size is where things get difficult around here.

 

[Oxbow]

$175 an hour=2.90 a mile--with fuel costs, license, insurance--that's in the park of reasonable.
No point in buying a single axle--short wheel base tandem. But one has to remember trucks in
the construction business are a necessary evil.

Drive 10 miles and load, drive 10 miles and unload, drive 10 miles back to shop. That will take at least 2 hours, probably more. At $175 per hour that's $11.67 per mile. Many have a 3 hour minimum as well.

One needs to add that in to the job whether or not they hire it done or do it themselves.

 

[Georgia Iron]

Option 3 is what I did. I bought the machine, then the trailer to move it. Pay a tandem dump by the hour to move it using your trailer, should save about $25.00 per hour since they don't charge you for the trailer. Dumps are the most common, cheapest and the best to use to move the machine.

The bigger machines will bring bigger work and once you find you need the bigger truck get it. The truck issue hit me when I could not get someone to move my machine when I needed it on the job. So along comes the older truck. You dont loose any money moving the machines in and out even paying because I charge to deliver equipment.

I dont make money off the truck, it is just for moving my machines. I dont want to earn a dump truck rate, I want the specialized total job rate. I have no problem dropping the insurance and letting it sit till work is rolling.

Lots of nice excavators around right now in the 30s, i got a 20 ton eager beaver for 5K, and off to the races.

I loose money tring to rent equipment, it takes too long to go rent it...

 

[MG84]

Drive 10 miles and load, drive 10 miles and unload, drive 10 miles back to shop. That will take at least 2 hours, probably more. At $175 per hour that's $11.67 per mile. Many have a 3 hour minimum as well.

One needs to add that in to the job whether or not they hire it done or do it themselves.

Yeah the cost per mile is going to be a lot around here. Last job I did was 18mi from the house, takes 45min to get there in the pickup, over an hour hauling my equipment with the bigger truck.

I sometimes wonder how easy this job would be in the midwest, flat ground, easy hauling, digging in garden dirt lol. But I digress...

 

[MG84]

Option 3 is what I did. I bought the machine, then the trailer to move it. Pay a tandem dump by the hour to move it using your trailer, should save about $25.00 per hour since they don't charge you for the trailer. Dumps are the most common, cheapest and the best to use to move the machine.

The bigger machines will bring bigger work and once you find you need the bigger truck get it. The truck issue hit me when I could not get someone to move my machine when I needed it on the job. So along comes the older truck. You dont loose any money moving the machines in and out even paying because I charge to deliver equipment.

I dont make money off the truck, it is just for moving my machines. I dont want to earn a dump truck rate, I want the specialized total job rate. I have no problem dropping the insurance and letting it sit till work is rolling.

Lots of nice excavators around right now in the 30s, i got a 20 ton eager beaver for 5K, and off to the races.

I loose money tring to rent equipment, it takes too long to go rent it...

I've thought about buying a 20T air brake trailer to use with my single axles, would give me the ability to haul an 8 ton excavator now, and upgrade trucks later if need be. Problem is a 20T trailer is spendy and way overkill for my day to day tasks.

I hear you on the trucks though, everybody and their brother hauls dirt and gravel cheap around here. That's why I have never felt the need for a tandem dump, and was thinking about going straight to a small semi.

 

[Georgia Iron]

I've thought about buying a 20T air brake trailer to use with my single axles, would give me the ability to haul an 8 ton excavator now, and upgrade trucks later if need be. Problem is a 20T trailer is spendy and way overkill for my day to day tasks.

I hear you on the trucks though, everybody and their brother hauls dirt and gravel cheap around here. That's why I have never felt the need for a tandem dump, and was thinking about going straight to a small semi.

You have no need for a small semi. A dump truck can work on your jobs a semi will sit and watch you..

When you demo or pullout stumps you can charge to haul them off.

 

[CM1995]

I hate renting.

Yeah me too.

It's been a while since we rented a piece of iron.

 

[MG84]

You have no need for a small semi. A dump truck can work on your jobs a semi will sit and watch you..

When you demo or pullout stumps you can charge to haul them off.

That's part of what I'm trying to decide. I have two single axle dump trucks already and there are plenty of tandem dumps to hire for cheap. I can buy a decent semi tractor and new drop deck equipment trailer cheaper than a tandem dump and new 20t pintle trailer. Also cheaper to insure and can haul a lot more weight, but access isn't as good, IDK...

 

[BC Placer gold]

I hate renting.

Same….

 

[JBGASH]

I hate renting for the shear hassle of having to hopefully get done what is needed on a timeline and get the rented item back before time rolls to the next day. The whole process can be time consuming and the rental items break down a lot as well. Normal procedure for me, after 1 or 2 renting events - I soon own the item, and have never regretted buying anything yet. Once well equipped it helped open doors / opportunities for me over and over.

 

[Georgia Iron]

That's part of what I'm trying to decide. I have two single axle dump trucks already and there are plenty of tandem dumps to hire for cheap. I can buy a decent semi tractor and new drop deck equipment trailer cheaper than a tandem dump and new 20t pintle trailer. Also cheaper to insure and can haul a lot more weight, but access isn't as good, IDK...

For what it is worth I know someone that used a 20 ton trailer and an F750 to move his 953 for years. Not legal but he did it. 953 and 20 ton will weigh about 42,000 lbs.

What is unbelievable is my f450 is legally rated to pull a 15 ton pintle trailer. What BS.

 

[MG84]

Seems like a lot of people dislike renting, I don't really like it myself but I have made a lot of money with rented equipment in the past. I also now own most of the types of equipment I've rented in the past. If nothing else it's a good barometer as to what is worth buying based on how often you rent it.