Cost of Owning vs Renting vs Hauling equipment

[MG84]

I'm not sure where you live but a tandem truck can be licensed at 52000 and still hook the trailer on this is assuming the dot in your area is well... you he the idea

Yes, same here. The truck is licensed at whatever you plan to gross, whether it is just the truck or truck + trailer. My thinking was the single axle is a good bit lighter than a tandem so that's more payload to still stay under 55K, but maybe tha'ts a backwards way to look at it.

Stay under 5000 miles per year and you are exempt from the federal heavy use tax. Or 7500 mile cap for farm use.

I did see that, not sure how many miles I'd put on it. I put about 10K last year on my single axle dump and probably will put close to that many on the IH flatbed.

MG84, I apologize for getting so far off topic. The questions you have posed are addressed by every small contractor when starting out. I rented all my equipment in the first years of business, and had the dealership deliver anything bigger than a skid steer. My thought at the time was that I could always have exactly the right equipment for the job, be more efficient, and look more professional showing up with newer equipment. If I had an issue with any of the equipment the dealership was there immediately to address it. That was in 2008 though, equipment availabilty was not an issue and the dealership would subsidize the hauling somewhat.

Since then we have moved to a point where we only rent various equipment two or three times a year, and typically for a relatively short duration. The biggest reason for the change is that availability became a real issue, especially in the last three years. Also, we were putting 500 or more hours per year on our primary equipment and the cost per hour of ownership became lower than the rental rate. Add in the convenience of having your machine right there ready to go has a lot of value, just hard to put a number to it.

In regard to hauling, trucks are just a necessary evil, especially for a contractor getting started. That said, for the size of equipment that you have I also believe that a dump truck with tag trailer is probably the best way to go. It will free up scheduling, allow you to go get your own aggregate and have it available when you need it rather than altering the job schedule around material delivery, and allow you to move to the next job at your convenience. That said, if you have a good relationship with another contractor or aggregate company that will haul your equipment for you, it probably makes more sense to invest in the equipment first. It will become clear when you need to invest in a truck.

I wound up buying our transport before equipment. The reason was that it became difficult to have our rented equipment hauled from one jobsite to another. We typically use nothing smaller than a 200 size excavator, paying rent on one for a day or two and the loss of revenue while awaiting transport didn't settle well with me.

A lot will have to do with what you have available in your area as far as companies to transport your equipment.

Lots of good points and similar to my way of thinking. I've been in business 17yrs now, but have just been growing the business very slowly, mostly with cash. I tend to mull things over for quite awhile before I make a big purchase or change to the way I do things. That being said, I think previously I had just been way too conservative with my purchases. I'd buy an older piece of equipment, fix it up, and it'd pay for itself in just a couple months of work. I realized while that is a good/quick ROI, I could buy new or newer equipment and the payback would be a little longer, but the operating experience is so much better and little to no down time. This year I bought a new CTL and almost new 35 mini excavator, and the productivity boost has been huge. The one area I'm still lacking in is equipment for clearing land/stumping, hence looking to add another larger excavator. The ol Case backhoe gets it done, but not quickly.

 

[CM1995]

One thing about renting:
Cat and the big players do not have weekend hours, and I can get a machine on Friday morning and return it Monday for a 1 day rental. I don't know if United does the same thing or not, but I can get the 8 hobbs hours in that way on Fri~Sat.

Our Rental Store does or does for us. My guys rented a telehandler to put together a bank safe on their property we took down on a demo a couple of years ago. They dropped it off Friday afternoon and picked it up Monday morning and only charged 8 hrs rent.

 

[MG84]

Go out and rent an 85 Deere while you are renting things, OP. it might take a drive to go get it, but you can haul it yourself and you'll probably like it.
I know the TB290 is closer, but I would audition all the players.
One thing about renting:
Cat and the big players do not have weekend hours, and I can get a machine on Friday morning and return it Monday for a 1 day rental. I don't know if United does the same thing or not, but I can get the 8 hobbs hours in that way on Fri~Sat.

Kubota, Takeuchi, Deere and Case are my choices for excavators in that size class, all have dealers fairly close, some better than others. Cat is out of my price range, new or used. As far as rentals go, United rents the Tak 8 ton, Case dealer rents their 8 ton but is 1.5hrs away, Cat has a rental store about an hour away, may rent from them but don't plan to buy. No place to rent the Kubota that size, not sure about the Deere yet. If I do buy one it'll probably be used, they are $130K+ new from what I've seen. I don't have enough work for one to justify that kind of expense.

Which brings me to the other part of this equation, my business is not entirely dirt work, I also build barns, fencing, and do some masonry work. Every year is different of how the work is made up, some years there are a lot of big excavating/land clearing projects and I put hundreds of hours on my bigger equipment, other years the skid steer/mini ex gets the bulk of the hours. Doesn't matter to me either way, it all pays good and I like the variety, mostly boils down to what my customers need. With that all being said, I need to evaluate how much I'll really use a piece of equipment and when renting vs owning makes sense. Yall have given me some good direction so far, this is a good discussion.

 

[Georgia Iron]

Correction on my posts, I said pintle and I ment to say gooseneck neck. The dump pulls with a bumper pull pintle and the f450 uses a either a goose neck or pintle. F450 is good for a 10 ton pintle and 15 ton goose neck.

One thing I forgot to mention about using the goose neck is the weight is up further in the air, way more tippy than a low slung skid steer type trailer. But better weight distribution on the rear truck axle.

 

[skyking1]

Glad it is working out.
My work is a niche where I really need a 35 rather than anything bigger. Most times if I can do it with the bigger machine that is what I would bring.
I don't know about your work, but I could see an 8 ton just parking the 5 ton, and eventually replacing it.

 

[Georgia Iron]

Glad it is working out.
My work is a niche where I really need a 35 rather than anything bigger. Most times if I can do it with the bigger machine that is what I would bring.
I don't know about your work, but I could see an 8 ton just parking the 5 ton, and eventually replacing it.

I wish my 5 ton sat up 1' taller for more frame ground clearance, had the ability to raise or lower a track based on grade and had 6 ft more reach. I could really knock out some concrete slabs then.

I would bite the bullet and buy a new machine.

Case could call it the Footasuar! Do you think they will hire me for product development?

 

[skyking1]

I wish my 5 ton sat up 1' taller for more frame ground clearance, had the ability to raise or lower a track based on grade and had 6 ft more reach. I could really knock out some concrete slabs then.

I would bite the bullet and buy a new machine.

Case could call it the Footasuar! Do you think they will hire me for product development?

Remember that guy with the wacker that he totally customized for small logging? What a shame it burned up in a forest fire. It raised up level on any grade.

 

[CM1995]

Kubota, Takeuchi, Deere and Case are my choices for excavators in that size class, all have dealers fairly close, some better than others. Cat is out of my price range, new or used.

We have all the major brands here within a 20-30 mile radius, Cat and Kommie have multiple locations. Cat, Komatsu, Deere, Volvo and Kobelco are all very competitive on pricing new equipment. Cowin has Case, Volvo, Hitachi and Kobelco. Kubota is more of a hobby farmer dealer not a construction dealer so their higher pricing reflects their clientele. Bobcat here..well I won't go there.

Anyway it's interesting how pricing varies regionally on new equipment.

 

[skyking1]

I was not personally impressed by the case 37 rental I have used a couple of times. It was just OK.

 

[MG84]

Glad it is working out.
My work is a niche where I really need a 35 rather than anything bigger. Most times if I can do it with the bigger machine that is what I would bring.
I don't know about your work, but I could see an 8 ton just parking the 5 ton, and eventually replacing it.

I might have misspoken somewhere in this thread but I don't own a 5 ton, I have a U35-4 Kubota (8500lbs), and a Case 480E backhoe. I have frequently rented 6-ton machines in the past, in fact put about 65hrs on a TB260 rental last year. A 6-ton is not quite a replacement for the backhoe, doesn't have the reach or bucket size, but it's close.

I too need a small machine for a lot of my work, the U35 mini is perfect for most small jobs, I just don't like how heavy it is vs the narrow tracks. It's noticeably more ground pressure than my CTL and really does a number on lawns. There are times I wish I had something even smaller like a 1.7-2.5T machine. I have also thought about buying a 6-ton, but it seems too close in size to what I already have, it would be easy to haul though. My thought process was have two machines with a big enough size difference to compliment each other in the variety of work they do. 1.7t+6t, 3.5t+6t, or 3.5t+8t I'm not sure what's the most versatile for what I do.

 

[MG84]

I was not personally impressed by the case 37 rental I have used a couple of times. It was just OK.

Only reason I'm considering a Case the in the larger machines is they are made by Sumitomo, not Hyudai like the smaller minis.

 

[MG84]

We have all the major brands here within a 20-30 mile radius, Cat and Kommie have multiple locations. Cat, Komatsu, Deere, Volvo and Kobelco are all very competitive on pricing new equipment. Cowin has Case, Volvo, Hitachi and Kobelco. Kubota is more of a hobby farmer dealer not a construction dealer so their higher pricing reflects their clientele. Bobcat here..well I won't go there.

Anyway it's interesting how pricing varies regionally on new equipment.

We do have a Komatsu dealer about 45min away, but I've never had any dealings with their equipment before.

 

[skyking1]

I'd rip some 3/4 used ply and put it under the tracks of the mini when you have a sensitive job. The job can pay for some plywood when the alternative is expensive restoration.

 

[MG84]

While we are on the topic of renting, has anyone else noticed the huge number of private individuals renting out their equipment on Marketplace and Craigslist? It's usually a mini excavator, CTL, dump trailer or the like, often brand new. Makes me wonder if this is stuff people bought and have trouble making the payments on so they try to rent it, or are they actually trying to run a rental business out of their house? Either way seems risky for both parties involved. Anyone here do this, or rent from them?

 

[CM1995]

While we are on the topic of renting, has anyone else noticed the huge number of private individuals renting out their equipment on Marketplace and Craigslist? It's usually a mini excavator, CTL, dump trailer or the like, often brand new. Makes me wonder if this is stuff people bought and have trouble making the payments on so they try to rent it, or are they actually trying to run a rental business out of their house? Either way seems risky for both parties involved. Anyone here do this, or rent from them?

Sounds like a complete cluster.

 

[BC Placer gold]

While we are on the topic of renting, has anyone else noticed the huge number of private individuals renting out their equipment on Marketplace and Craigslist? It's usually a mini excavator, CTL, dump trailer or the like, often brand new. Makes me wonder if this is stuff people bought and have trouble making the payments on so they try to rent it, or are they actually trying to run a rental business out of their house? Either way seems risky for both parties involved. Anyone here do this, or rent from them?

With the previous low interest rates starting noticing brand new mini excavators (primarily) on ‘acreages’….after initial use now sitting largely unused. Personal use only; likely can’t afford payments IMO.

 

[MG84]

Sounds like a complete cluster.

That's my thoughts too, but someone must be renting it or they wouldn't keep doing it.

With the previous low interest rates starting noticing brand new mini excavators (primarily) on ‘acreages’….after initial use now sitting largely unused. Personal use only; likely can’t afford payments IMO.

I think we may start to see a lot of low hour used equipment for sale at good prices soon. A lot of it was bought during covid, using 'free' money as a down payment, when they had nothing better to do, now reality is starting to set in.


Are other people noticing this around the country or is a regional thing? If you search for "excavator" on Marketplace 40% of the ads are for someone trying to rent out their mini excavator or skid steer.

 

[MG84]

I also wonder if it's also one of these youtube get rich quick business ideas that everyone wants to try? Around here its also dump trailer rental/service delivering tiny quantities of gravel, and those small roll off dumpsters you can pull behind a pickup.

 

[skyking1]

I have seen small overhead rental guys for many years now. One guy is Bobcat Bob, and he has no storefront, he just delivers bobcats and minis.

 

[crane operator]

Similar to a air b n b, they are trying to have other people pay for their hobby excavator or skid loader.

The big thing in my area is selling lake cabins in a development to individual owners. Buy the lake house, they (the developers) rent it out for you (for a fee). You block out what week you want in the summer- and all the other vacationers are paying for your lake cabin. There's been a bunch built here in the last two years.