Advantages vs. Disadvantages of Renting Trucks and Equipment Rather than Buying
Trucking and excavating businesses can be very profitable, but there are a lot of major decisions to make when you own such a business. One critical decision to make is how to best structure your business to ensure success. Here, you need to decide if you should be renting trucks and equipment or buying them. But does it have to be such a hassle? It doesn’t, as long as you can effectively weigh the decision by looking at both sides of the divide.
Continue reading to familiarize yourself with the advantages and disadvantages of renting trucks and equipment or buying them.
Advantages of Renting Trucks and Equipment
- Reduced Fixed Costs: Think about it, when you rent equipment, you don’t have to deal with pesky costs such as storage charges when you aren’t working. Other fixed costs that you also won’t deal with include insurance and maintenance of the equipment or trucks. Bills won’t pile up on your business when you do or don’t have work, and this keeps you in the black.
- Manageable Breakdown Stress: There’s stress when equipment breaks down, but when you are renting, the stress is manageable as you only need to call the renting company. The renter will bring you a different truck or equipment when there are mechanical failures, and they also have to pay the towing fees.
- Flexibility: Renting equipment gives you a lot of flexibility as you can flex your large fleet depending on a project – and even bid for bigger jobs. You can easily return the equipment once the project is done. The idea is to rent the equipment for the exact amount of time you’ll need to complete the project.
Disadvantages of Renting
- Can be costly: The biggest disadvantage of renting equipment is that it can turn out to be costly in the end, especially if you are using it for a short time.
- Time Consuming: It takes up a lot of time before drivers and operators get used to new equipment – time that should have been spent working.
Advantages of Owning
- Branding: The most obvious advantage of owning your equipment is branding. You can brand the equipment with your company colors and logos to help with your marketing strategy. Additionally, you can also add your phone numbers to help potential clients reach you easily.
With this kind of branding, the company gets great exposure at no extra cost.
- Flexibility on Last Minutes Jobs: When you have last-minute jobs, you are better served with your equipment. Most of these types of jobs often pay better as they are on short notice, and you can’t rely on renting companies to bring the equipment in such a short time.
The flexibility of having your equipment allows you to take jobs on the go – big or small since you have the right tools at hand. Also, a rental makes no economic sense since their equipment is normally cheap when you hire for a long-term job.
- You Know Your Equipment: Knowing your equipment means you can handle jobs on the fly quite easily and effectively. You know all the quirks about them. When you have a rental, you and your drivers have to familiarize themselves with the equipment. Then, you have to go through the same learning process again when you hire equipment from a different rental next time. Knowing your trucks and equipment ensures that there are fewer mistakes and accidents since they are like an extension of your body.
Disadvantages of Owning
- Costly Training: There’s a lot of time and cost that is incurred to train workers on new machines.
- Extra Costs: Other costs that have to be incurred when you own equipment include storage, transportation, and repairs.
While owning or renting trucks and equipment has its advantages depending on where you stand, there’s no rule that you can’t mix both. Owning some pieces and supplementing them with a few rented at the right time will lead to downside protection and profits. The business remains afloat when you mix both, even if work dries up.