The Versatility of Renting Equipment

The Versatility of Renting Power Equipment

As a construction company owner, manager or fleet operator, you know that being versatile is a key factor in remaining competitive in today’s world. One of the main benefits of renting equipment is the versatility you’ll have with a rental arrangement.

Opportunities suddenly arise, and you need to pounce for profitability. Construction equipment renting gives you a leading advantage over your competitors who may be limited in the types of projects they can take on if they don't have access to the right equipment. Advantages of equipment rental include the versatility you’ll gain by instantly responding to sudden workplace demands and selecting machines ideally suited to your task.

Why Rent Equipment?

You have several options when acquiring equipment. Each method has its considerations, so you have to review the information and make a decision about what’s in your company’s best interest.

Renting your equipment can give you real and tangible versatility. Renting lets you obtain and operate specific machinery for a specific duration. You pay for only the time you use the equipment, and you can quickly swap it for a more suitable piece as job conditions change. If you find one machine that's particularly useful, you can extend your rental agreement and keep it over a longer term. That’s versatility at its best.

There are two important aspects to consider when determining whether to rent equipment. One is the usage frequency you demand of the machine. The other is how versatile you expect your equipment to be.

  1. Frequency refers to how often you’ll use a particular machine. Standard reasoning dictates that the more you operate your equipment, the more advantageous it is to purchase it and own it outright. Many successful companies prefer to buy their core-support machines because they find it increases their payback.
  2. Versatility is all about how many tasks you can accomplish. Consider the different locations you can put your machine to work on your job, and what your ongoing needs are. For example, a skid steer is one of the most versatile machines because of the wide terrain it operates on and the incredible amount of work tool attachments it can handle.

True versatility in the construction world means access to the vast stock of different machines available to work on specific jobs, at specific locations and at specific times. Renting your equipment gives you the profitable versatility of using one machine for the task duration and quickly replacing it as worksite demands evolve.

Versatility has a few alternate names. You can replace versatile with adaptable, changeable, all-purpose. Regardless of how you say it, versatility is all about being able to respond quickly to your business needs and doing so as economically and efficiently as possible. Renting your equipment can give you real and tangible versatility.

The Benefits of Renting Equipment

Renting equipment can give you a versatility advantage over other machinery acquisition options, and construction businesses are embracing heavy equipment rentals as an economical way to build their fleet. According to Construction Today, 25 years ago, construction companies owned over 95% of all equipment in America. That changed at the turn of the century. By 2003, the scale had tipped and rentals accounted for 54% of the market.

As we approach the first quarter of the 21st century, equipment rentals outweigh new and used machinery purchase transactions. However, this doesn't mean purchasing is not a viable option or choice for your business — it absolutely is. Purchasing equipment is still a popular and financially sound option for many businesses and can make the most sense for your operation.Renting equipment, in some cases, just allows companies to be more nimble, respond to opportunities quicker and improve their bottom line. Renting equipment can benefit you through greater flexibility and less financial commitment.

While one of the main advantages of equipment rental is versatility, there are numerous other benefits. You’re in business to make a profit, and money is your company’s lifeblood. Renting equipment can improve your profitability in many ways or deliver these other favorable benefits:

  • Conserve crucial capital: Heavy equipment rental agreements require no up-front money. With machinery renting, there’s no need to tie up your valuable capital that can be put to other uses. Conserving cash is a critical business tactic, and renting equipment gives you some versatility with your working capital.
  • Increase borrowing capability: If you’re like most construction company owners or managers, you’ll have to finance most equipment you plan to purchase, and there is likely a limit to your borrowing capacity at the bank. Renting  equipment has less impact on your borrowing power and allows you to operate many different machines within your financial range.
  • Eliminate depreciation loss: Like cars, new machinery depreciates in value the moment you take possession. That’s part of the construction industry business, and tax reliefs exist to compensate for this. However, when you rent your equipment, depreciation isn’t your concern, and this adds to your financial adaptability.
  • Benefit from tax write-offs: When you buy new or used equipment, you’re limited to structured tax deductions regarding your machinery expenses. Depreciation and financing rates are based on amortization. With rental machinery, you can write off all your associated rental costs as a lump-sum business expense.
  • Maximize inventory levels: Renting equipment gives you increased control over your machinery inventory. Once you’re done with a machine, you simply call for it to be picked up. There’s no long-term inventory to be stored, maintained or paid for when it’s not operating.
  • Control set-up and tear-down costs: Normally, the time it takes to set up machinery at the start of a project and clean it up at the end has associated costs absorbed by the contractor. By renting equipment, it becomes the supplier's responsibility to get the equipment to the jobsite and take it away at the end of the rental agreement. All you need to do is get to work. This versatility also ensures you’re paying for the machine only while you actually need it.
  • Reduce maintenance costs: Every reputable rental company looks after all maintenance and repair issues with their inventory. This is an enormous advantage over assuming the risks and expenses associated with maintaining your own equipment. Not having to deal with the tools, parts and downtime associated with maintenance frees your staff and lets them spend more time on other value-added tasks.
  • End storage requirements: If you own machinery, you have to find a place to store it while it’s inactive. Big machines take up large spaces, and that can be hard to find unless you own a yard. Storage space costs money, and savvy managers offset this requirement to their rental supplier.
  • Increase access to technology: When you rent equipment, you’re assured of the most modern machines with the best and latest technological advancements. Leading heavy machinery suppliers like The Cat® Rental Store revolve their inventory after two successive models. Renting allows you to upgrade and take advantage of new technology.
  • Keep your jobsite safe: New machines are safe machines. Advanced technology offers better operator comfort in the cab and on the controls. Renting your equipment benefits everyone on your construction team, and increases their ability to get better efficiency and improved economy from your equipment.
  • Comply with government regulations: You must comply with government regulations. The Environmental Protection Agency (EPA) and other regulators like the Occupational Safety and Health Administration (OSHA) have stiff penalties for operating non-compliant equipment. However, non-compliance is not a concern when you source your equipment through rentals.
  • Get the right tools: Your Cat Rental Store offers you multiple alternatives for your equipment needs. You have the versatile choice from hundreds of machines from all configurations when you rent from The Cat Rental Store. This includes selecting a base machine and then equipping it with a wide range of work tool attachments.
  • Try before you buy: Renting equipment gives you an opportunity to test new equipment before you commit to purchasing it. This try-before-you-buy approach is an excellent way to experience new designs and advances in technology.
  • Increase business opportunities: Renting equipment increases your business opportunities. When you rent equipment from a reputable supplier like The Cat Rental Store, you have immediate access to virtually any machine or tool you’ll require for any job. By renting, you no longer have to turn down potentially profitable work because you don’t own the right equipment. You simply call 1-800-RENT-CAT and experienced professionals will line up the right machines to secure your new business opportunities.

Having immediate and continuous access to a massive machine inventory is crucial to bidding and winning new work. The Cat Rental Store has an extensive dealer network, providing you with a vast inventory to choose from. With The Cat Rental Store, you'll always have access to reliable, versatile equipment.

How Renting Equipment Opens Doors

When you rent equipment, you increase your company's versatility. With a simple and convenient phone call, you open the door to a huge stock of equipment that's stored and maintained for you.

Winning and profitably executing construction work is hard. You need to be versatile in your specialties and expertise — and spend time estimating, bidding and winning contracts. You also have to wear different hats as a people manager and a bill-payer. These are the skills you need to open doors to successful projects and profitable returns.

By partnering with The Cat Rental Store, you extend your ability to get things done. It’s outsourcing your equipment needs to specialists who have the inventory to support your work and make you money. You need an equipment supplier who gives you full support so you can confidently open doors to new projects, knowing you have the right machinery to complete your commitments efficiently.

Access and versatility can make a big impact on your project timelines and bottom lines. To be versatile, you need to have unlimited equipment access. Accessibility allows you to be adaptable in choosing the exact equipment piece you need for a precise job. That includes having access to that machinery precisely when you need it and for as long as necessary.

You get the perfect blend of versatility and accessibility when you source equipment from The Cat Rental Store. We have top-quality Cat heavy equipment as well as over 60 allied brands to give you a wide range of capabilities suited to every job. Renting equipment opens the door to new opportunities, and partnering with The Cat Rental Store ensures you get reliable, quality equipment every time.

Should You Rent Equipment?

Renting equipment gives you the most versatile options you can find. When you rent machinery, you have immediate access to every benefit you can get in the machinery market. You have the freedom to use the equipment for only the time you require and no more.

This ensures you’re only paying for use time, not leaving money on the table with idle time. By renting equipment, you can plan an efficient production schedule that's customizable with a flexible rental agreement. This allows you to control time and labor costs, turning your next project into a profitable one.

If you're considering renting your next equipment, you have a few important metrics to factor in to ensure the right financial move. According to an article from Construction Business Owner, a rule-of-thumb is that you need to operate machinery 60% to 70% of the time to justify ownership. If you have an excavation or paving company, then it's likely worthwhile to invest in owning your core machines. If your operating rate is below the two-thirds threshold, then it might make more sense to rent. Assessing the time spent using your machinery and knowing your numbers is why renting might make the most sense for multi-service contractors who pride themselves on delivering and managing a range of needed services.

Both ownership and renting come at a cost. It’s up to you to decide what's best, and fortunately, there are sources that can help with calculating the cost of equipment ownership vs. long-term rentals. By using equipment cost formulas, you can determine which option makes sense for your financial position. If you're weighing the costs, here are some factors to take into account:

  • Equipment usage rate: You'll want to estimate how much you intend to use a particular piece of equipment. Forecasting accurate use is an educated guess unless you have secured fixed-rate contracts. Most construction companies don’t use their machinery every day for 8 hours each day. The industry-standard calculation is 22 days of 176 hours per month which works out to 64%. According to industry rules-of-thumb, usage above 65% indicates buying is more cost-effective than renting. Usage below 65% suggests an increased financial risk with owning. Any rate below 40% clearly tells that renting is the preferred option.
  • Total lifetime costs: With renting, you don't need to be concerned with the possibility that a piece of equipment's total lifetime cost might be more than what you'll earn back in resale value. That's because total ownership costs include servicing, storing, insuring and supporting administrative costs. You won't be shocked by any “hidden” costs that start to accumulate. With a rental model, you’ll know exactly what your rental costs will be, and you'll never be surprised by your final bill.
  • Financial flexibility: When you don't have a huge lump sum available to make an upfront purchase, renting is the safer, easier and more financially forgiving option. While it's possible to get a loan, one of the biggest reasons why renting has become so popular is to prevent taking on more debt. Since credit lending rules have tightened so stringently over the years, it's one reason why construction business owners sometimes prefer to rent than borrow funds to own. With rental contracts, you usually have financial flexibility that's interest-free.
  • Maintenance and downtime: A true versatility benefit with rental equipment is your lack of maintenance and downtime loss. Leading rental companies monitor your maintenance schedule and act on it before you experience expensive downtime. Rental companies will also supply you with substitute machinery during service and repair periods. There's no need to keep a technician on-call or incur costly work stoppages. If you ever experienced a period of unexpected downtime, you know how valuable it is to have a reliable rental company take care of maintenance issues for you.
  • Rental company buying power: Because large rental companies like The Cat Rental Store have massive buying and holding power, this capital saving gets passed on to you. Rental suppliers amortize their costs over the equipment’s life span, and this is a cost-saving benefit you’ll greatly appreciate. It gets passed on to you in the form of updated technology, top-end maintenance approaches and the ongoing reinvestment into new, cutting-edge models. With their buying power, top equipment rental dealers can offer their customers more value-added services and training programs.
  • Expanding services: If you have your sights set on expanding your contracting services, then renting equipment can help you achieve this goal. As projects demand greater flexibility, you can keep up with your customers' needs. By partnering with leading rental suppliers like The Cat Rental Store, you'll have the opportunity to deliver more services and build new clientele with limited risk and controlled costs.

Renting Equipment From The Cat® Rental Store

There’s more to being versatile than forecasting costs and crunching numbers. As an experienced construction owner or manager, you know an opportunity when you see it. Renting is a more versatile option for short-term and sudden equipment requirements that can eventually translate into long-term contracts. Renting gives you the flexibility to respond, get the job done and gain rewards from your risk.

The Cat Rental Store helps you maintain versatility in your work sites. Cat brand equipment leads the industry in technological innovation with versatile options ranging from earthmovers to power generators. We also carry an extensive line of equipment attachments. Thanks to The Cat Rental Store's nationwide distribution network, you'll never be without the right tools for the job.

To increase your working versatility and prosper on your jobs, partner with The Cat Rental Store for all your equipment needs. Find your local Cat Rental Store or call us today at 1-800-RENT-CAT.

 

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