I would like to hear some oppinions as to weather it is better to own an older machine or rent for seldom used equipment. For example if you only need a machine say 100 hours a year would you rather own an older machine that is in good condition, and still cappable of the job, or rent one? Assuming that the lower maintaince cost for renting a machine would be offset by the lower owning cost of the older machine. So, if the cost was about the same (to rent vs own) and the production was about the same (newer rented machine vs older owned machine) would you rather rent or own?
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Fleet Management
- Thread starter ror76a
- Start date
If operating costs and production rates were the same, it would make little sense to rent. That's part of the attraction to renting, less capital invested. All things being equal however, it makes sense to own the machine and have it at your disposal, when you want it where you want it. In owning a machine your more likely to do smaller jobs with it where the expense of renting a machine would not be worthwhile.
surfer-joe
Senior Member
In some situations it may be about a wash. But consider these items;
OWNED MACHINE.
Insurance
Registration/license costs
Other fees (SME registration like in Colorado-Wyoming, air district
registration, etc.)
State reporting requirements (like air compressors, generators, in California)
Maintenance and upkeep (tires, batteries, etc)
Storage room & security
Transportation
Potential or actual lower production
Greater chances of break-down or other maintenance problems on job
Potential for vandalism or other damage
Potential for citations if your machines breaks and hurts someone, or collects DOT
citations for little items not caught in regular maintenance
Have to keep on the books or in the computer for auditing costs and value (more labor)
You won't have all of these with a rental, only some.
If you have an older unit that is a niche machine, that is, one that only does specialized work, and one that happens to be difficult or impossible for a rental outfit to supply in a timely manner, than you might want to consider keeping one around in good condition. That doesn't mean an old high-hour Cat D11 or 651.
You may or may not be surprised at how quickly unused machinery deteriorates. And, at how much work and money it really costs to keep them around if not being used regularly.
If you have a good cost accounting program that will show you exact profit/loss figures, a close study of that, plus some forward looking thought, will give you a pretty good idea of the direction you need to go.
I worked for a guy that also let sentimentality shade his judgment. "Oh, that was my first machine, or, that was the truck that ran over my first wife." If you are the owner, you can make the decision to keep or sell units like these. He kept them, and they cluttered up the yard and occasionally, I'd send one out on a job. The guys on the jobs didn't like the old things, were afraid to run them for fear of mucking them up and facing the bosses wrath, or they just flat wouldn't run them and went off and did without or rented anyway.
I'm sure you will get some other ideas and advice here.
Good Luck!
OWNED MACHINE.
Insurance
Registration/license costs
Other fees (SME registration like in Colorado-Wyoming, air district
registration, etc.)
State reporting requirements (like air compressors, generators, in California)
Maintenance and upkeep (tires, batteries, etc)
Storage room & security
Transportation
Potential or actual lower production
Greater chances of break-down or other maintenance problems on job
Potential for vandalism or other damage
Potential for citations if your machines breaks and hurts someone, or collects DOT
citations for little items not caught in regular maintenance
Have to keep on the books or in the computer for auditing costs and value (more labor)
You won't have all of these with a rental, only some.
If you have an older unit that is a niche machine, that is, one that only does specialized work, and one that happens to be difficult or impossible for a rental outfit to supply in a timely manner, than you might want to consider keeping one around in good condition. That doesn't mean an old high-hour Cat D11 or 651.
You may or may not be surprised at how quickly unused machinery deteriorates. And, at how much work and money it really costs to keep them around if not being used regularly.
If you have a good cost accounting program that will show you exact profit/loss figures, a close study of that, plus some forward looking thought, will give you a pretty good idea of the direction you need to go.
I worked for a guy that also let sentimentality shade his judgment. "Oh, that was my first machine, or, that was the truck that ran over my first wife." If you are the owner, you can make the decision to keep or sell units like these. He kept them, and they cluttered up the yard and occasionally, I'd send one out on a job. The guys on the jobs didn't like the old things, were afraid to run them for fear of mucking them up and facing the bosses wrath, or they just flat wouldn't run them and went off and did without or rented anyway.
I'm sure you will get some other ideas and advice here.
Good Luck!
Electra_Glide
Senior Member
Steve,
I think you meant to say that "If operating costs and production rates were the same, it would make more sense to rent.", right?
I would agree. I rented my entire first year, and I could only take jobs where I could justify the cost of the rental inside the total job cost. I found that I had to pass on a few smaller jobs, or be willing to do them for free after paying the rental expense (which I wasn't).
Last year I went out and bought a new machine (Bobcat S175). It allowed me to take smaller jobs, and be more flexible in my scheduling. However, I've only put about 80 hrs. on it in the last year, and I'm now a slave to the payments. I love the flexibility it gives me when it comes to scheduling, but I'm still working for free, since all the money is going to make the payment. I went that route, becasue when I was looking, good low-hour machines were going for premium prices and I felt that for what I was going to have to spend, I might as well buy new.
In hindsight, I would have been fine with an older machine, since it is not getting used on a daily basis.
Thinkgs are getting to the point where I'm almost ready to put it up for sale...:crying
Joe
mflah87
Well-Known Member
It's all based on convienance, I have a few older loaders that I use just for snow. It's cheaper to do that than to go rent a loader for $3,000 a month. These machines are paid for. What machine are you wondering about?
In addition to the newer equipment that we use every day, I have an old grader, scraper, dragline, and roller that don't get used much, but they are handy to have around. Not much owning cost for most of them either, (the grader we bought about 15 years ago and I think I could still sell it for twice what we paid for it then, no major repairs yet either).
I also have an old loader and excavator that are handy to leave in the sand/shale pits if you need a load now and then, but when we are on a big haul we bring in a newer/bigger loader.
I have done a lot of smaller jobs with this equipment that if I had to rent, would have been done differently, or not by me at all.
It is intersting to hear how other people approch the subject though.
I also have an old loader and excavator that are handy to leave in the sand/shale pits if you need a load now and then, but when we are on a big haul we bring in a newer/bigger loader.
I have done a lot of smaller jobs with this equipment that if I had to rent, would have been done differently, or not by me at all.
It is intersting to hear how other people approch the subject though.
Orchard Ex
Super Moderator
It may depend on what type of equipment you are looking at and the availability of that equipment for rent. All the equipment magazines say that it is better to rent seldom used equipment and attachments. The reasons are similar to those already stated here plus they say "you get to use the latest equipment, well maintained" etc. etc.
That's all well and good if you have access to good rental outlets. I don't have any in my area. By good, I mean that they have access to machines or attachment that aren't "run of the mill" so to speak. I can only find the most basic equipment for rent. Around here if you want to rent a SSL your choice is a 763 with a tooth bucket or smooth bucket. Want a CTL, it's a T-250, maybe a TL-140. No brush grapple's, no Harley rake (had to drive 1.5 hr's each way to rent a Harley rake), you can theoretically rent an auger, but it usually out on "long term rental" so you can't really rent it. 6" Chipper, 25hp stump grinder, etc. anything bigger and you're out of luck. But they have man lifts out the wazoo...
E.g.- I wanted to rent a mini skid this spring to install a lawn in a limited access area, so I asked the rental yard "Do you have mini skids or mini ctl's?" They said "of course" and we had a long discussion about how versatile they are in tight areas with all those attachments available... I asked "so, do you have a Harley rake for it?" "No." they said. "What do you have that fits it?" "Well we have a toothed bucket and a smooth bucket." they said.... :Banghead :Banghead :Banghead
Be sure that you can rent what ever piece of equipment you think you will want.
That's all well and good if you have access to good rental outlets. I don't have any in my area. By good, I mean that they have access to machines or attachment that aren't "run of the mill" so to speak. I can only find the most basic equipment for rent. Around here if you want to rent a SSL your choice is a 763 with a tooth bucket or smooth bucket. Want a CTL, it's a T-250, maybe a TL-140. No brush grapple's, no Harley rake (had to drive 1.5 hr's each way to rent a Harley rake), you can theoretically rent an auger, but it usually out on "long term rental" so you can't really rent it. 6" Chipper, 25hp stump grinder, etc. anything bigger and you're out of luck. But they have man lifts out the wazoo...
E.g.- I wanted to rent a mini skid this spring to install a lawn in a limited access area, so I asked the rental yard "Do you have mini skids or mini ctl's?" They said "of course" and we had a long discussion about how versatile they are in tight areas with all those attachments available... I asked "so, do you have a Harley rake for it?" "No." they said. "What do you have that fits it?" "Well we have a toothed bucket and a smooth bucket." they said.... :Banghead :Banghead :Banghead
Be sure that you can rent what ever piece of equipment you think you will want.
I didn't communicate my thoughts completely. In ror76a's original scenario, he states that all costs are the same. My thoughts were if that were truly the case, then there would not be much cause to rent. The reason people rent is the machine does not cost as much to operate on an occasional basis. I guess my point is that renting is less expensive for occasional work.
The other side is the convenience factor as has been mentioned, and that goes along with my second point. When I rent a machine, I work as quickly as possible to do the work I need to with that machine to keep the rental cost as low as possible. If I had the machine at my disposal through ownership, I'd find other work to do with it as the job progressed which would save labor.
One advantage to owning that hasn't been mentioned is the time involved with picking up and returning a machine to the rental center. This played a big part in my decision to purchase. Also machine availability had become an issue with me. Basically I had to schedule my work around the rental center and I don't like surrendering that control.
The other side is the convenience factor as has been mentioned, and that goes along with my second point. When I rent a machine, I work as quickly as possible to do the work I need to with that machine to keep the rental cost as low as possible. If I had the machine at my disposal through ownership, I'd find other work to do with it as the job progressed which would save labor.
One advantage to owning that hasn't been mentioned is the time involved with picking up and returning a machine to the rental center. This played a big part in my decision to purchase. Also machine availability had become an issue with me. Basically I had to schedule my work around the rental center and I don't like surrendering that control.
Squizzy246B
Administrator
Yep, that about nails it for me. If a rental was always available and delivered to site I'd jump at the opportunity...problem is it rarely works that way. Just getting a 16 or 20 tonne excavator can be a major hassle.
It can also be a bit "if you build it they will come" when it comes to owning a machine. When you have it and people get to know...then often the work will follow....thats not good business planning though
An older machine that owes you nothing is excellent....no monthly repayments YaHoo! ...but it still needs to be worked out properly.
Countryboy
Senior Member
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- Georgia
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Welcome to HEF ror76a! :drinkup
surfer-joe
Senior Member
Orchard Ex, explain "Harley Rake" please. It must be a local term.
Countryboy
Senior Member
- Joined
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- Georgia
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greywynd
Well-Known Member
I think a lot of this would also depend on your situation in other ways. If you're a small operation, with you doing your own maintenance in the off season, then you would have time to pull that piece in the shop and go over it each winter as needed. However, all of the shop time could be considered 'extra overhead' that you wouldn't have to deal with if renting instead. One may also be a better advantage tax wise than the other, again, depends on your situation.
Or, like mentioned earlier, if it's a spare machine or second machine, sometimes it can be useful to have around. A snow contractor might have an older skid around for loading sand/salt into smaller truck spreaders, leaving the new(er) or larger machines for pushing snow.
Mark
Or, like mentioned earlier, if it's a spare machine or second machine, sometimes it can be useful to have around. A snow contractor might have an older skid around for loading sand/salt into smaller truck spreaders, leaving the new(er) or larger machines for pushing snow.
Mark