Do you have some big projects rolling down the pipe? Are you making big plans for growing your company's capabilities? With all these questions in mind, it is clear that you will need to associate with trucks or heavy equipment. What's the criterion of deciding on when to purchase such equipment or when to rent?
You want an economic option that will cut down on costs as much as possible but still offer the best results for your company. Therefore, it is better to conduct a critical evaluation of the capabilities and current situation of your company, as well as future plans.
Check out the following critical factors to guide you on whether to rent or purchase heavy equipment for your construction company's excavation project.
Identify Your Specific Construction Equipment Demands
Identify a specific threshold limit rate for your construction project in order to determine whether you will rent or buy the equipment needed. For instance, if the equipment will be needed to conduct 70 to 80 percent of the construction work, it would make sense to purchase the equipment rather than leasing or renting. You may also need to focus on your company's future needs. If leasing the heavy machines and trucks costs much more than owning it over the course of future projects, then it's time to purchase the equipment.
Consider Capital Expenditures and Tax Incentives Imposed
There are various bookkeeping and financial factors that must be considered before you decide on whether to hire or purchase the equipment. There are cases where rental expenses may be unexpectedly billed back to you and deductions made annually as part of your business expenses. When you purchase the heavy equipment, a capital expense that is treated as tax is incurred. However, with time, those capital costs are omitted as the value of the machine depreciates over the years. Owning the equipment will eventually pay off when it comes to tax time.
Understand Your Storage Options and Routine Management
Heavy equipment and trucks require a well though-out plan when it comes to storage and maintenance. You may not have to worry about where to store and how to service the trucks. The lessor in this case owns the equipment and deals with some of the headaches.
A critical analysis of all the factors mentioned above based on your company's current and future needs should help you come up with the best option.