When the intensity of the work is high in a construction project, it requires a quality work which has to be timely completed. Depending upon the complexity of the project, the need for the construction equipment arises. Although construction equipment is an essential part of any construction process; be it mining, earthmoving, excavation or digging of the earth, one has to keep in consideration all the factors to hire or buy the equipment.

What are the factors to consider?

• A piece of equipment contributes to the quality and timely completion of a project, mulling over the complexity of the project.

• The equipment has to compensate for the shortfall of the skilled and efficient workforce to timely complete the project.

• The utility and economic contribution of the equipment will justify the investment made in the equipment.

• By the project, rationalise the quantity of the equipment.

The construction equipment is used for :

• Digging

• Trenching

• Material handling

• Lowering the human resources; and

• Steady completion of a project

• Duration of the project

Speculate the time; your project will take to settle on a plan of action of whether to buy or hire the equipment. A construction project might complete in years to come, or in the next couple of weeks. Nobody will invest in buying an equipment for a project that will be wrapped up in the coming week. What will he do of the equipment after that? Spending a considerable amount to let the machine get rusted is not the right kind of investment to make. However, choosing to hire equipment for a long-term project is also not going to be a wise decision.

Make a note of the time span to resolute the dilemma of whether to buy or hire the equipment.

Cost of project

Some might think that to hire equipment will be better than buying it, while some might think otherwise. But who is right? Both are good at their places, while you decide to mark your spot in either of the groups.

Rented equipment needs no maintenance or insurance cost, but owning the machine will increase your expenditure with the same. Since the borrowed equipment are already used enough, you can not rely on the condition of the machine because of the depreciated quality of it. However, due to the change in technology every now-and-then, your possessed equipment has a shorter lifespan than the one you will take on rent.

When you hire a piece of equipment, you will be provided with tax benefits, which you will be devoid of with your machinery. The most important thing to look at is the total cost of both the cases.

The formula to calculate the total rental cost is rental rate multiplied by rental period, after adding the delivery charges.

The formula to calculate the total ownership cost is adding the delivery, maintenance, and insurance cost to the purchasing cost of the machine, and subtracting the resale value.

Calculate and inspect on all the factors to stay firm with your decision.

Here’s a table to show you the significant difference between both the equipment:

Availability of equipment matters

The theory of demand and supply affects the availability of machines to be rented. You will not always be provided with the machine you require to complete your project at the exact moment. While the benefits of hiring equipment are more than owning one, you cannot be sure of the availability of the needed equipment. Weeks can turn into months, while you wait for the required equipment. Sometimes the demand for equipment which has to be in the right condition to be used is moderately higher than its supply in the market.

Here is a sample calculation of the equipment :

                      
The expense booked in a lease is more than buying the equipment therefore big profitable companies prefers lease because tax benefits are more on a lease.