When it comes to purchasing construction equipment like forklifts, trailers, trucks, excavators and wheel loaders, there are many things to keep in mind. The first thing to consider is how urgently you need the equipment? Secondly, you must consider the price and decide what method of acquisition makes most sense, leasing or purchasing. Although the process is often difficult and stressful, this article outlines specific strategies for making the right business decision when acquiring equipment.
Short term vs. Long Term Usage
An important consideration to make is how long the equipment will be put to use. Short term usage may mean you are only using the equipment for a few projects, or during specific seasons. Other pieces of equipment may be used in the long term, like excavators, which are necessary for every project.
If you are only using certain equipment for the short term, it may be a better idea to lease equipment. With leasing or renting, you will not have to worry about keeping unused equipment in storage and can avoid paying maintenance costs. Furthermore, construction companies aren’t financially committed to equipment, and can put money towards other business needs.
Although renting is still a good option for long-term usage, purchasing equipment may be best for your business. Knowing that you will use certain pieces of equipment for multiple projects, it is a good idea to keep it available at all times. Owning equipment however means having to schedule maintenance accordingly, and making sure that you have equipment available at all times. The next consideration you must make when purchasing equipment is whether to invest in brand new or used pieces.
New vs. Used Equipment
Depending on how you plan on using certain equipment, as well as what budget you are working with, buying used pieces is a good option. Used equipment is a good idea for smaller businesses on a tight budget or if you need a last minute replacement. Finding savings in equipment can help create efficiencies in other areas, and may allow you to hire more workers to get jobs done quicker.
For larger pieces that you will rely upon heavily, purchasing brand new equipment is the best option. When purchasing brand new construction equipment, make sure that it includes warranty coverage provided for by the manufacturer. Furthermore, by tracking depreciation, and keeping up with scheduled maintenance, businesses can profit from reselling used equipment as well.
Whether you are buying new or used equipment, it is essential to deal with reputable vendors and manufacturers. Forming good relationships with vendors will help you further down the line when you need to purchase more equipment, and can help work out deals if they realize you are a good customer.
All construction companies approach the equipment acquisition process differently, yet there are a number of other variables that are worth considering. Once you have figured out the specific use for equipment, you must also keep in mind budgets, taxes, transportation costs, storage, maintenance costs, resale value and deprecation. Having this checklist ready when purchasing equipment will guide the decision-making process, and will help construction companies to make the smartest, most profitable choice.