Heavy Equipment

Construction Equipment

Construction equipment is very expensive and operates in an environment that requires major support in the areas of maintenance, repairs, and parts. The historical pattern of construction equipment acquisition in the construction industry has been for the contractor to purchase and own the equipment. But many contractors are coming to the realization that construction equipment is a very costly aspect of the construction business that requires careful management and consideration.

Contractors with a steady flow of construction projects within a limited geographic area still find it more economical to buy and manage their own construction equipment. But other contractors who may not have such a steady stream of projects or have geographically disparate projects have found renting or leasing construction equipment preferable to ownership. Construction equipment management now requires that the contractor treat his equipment as an independent profit center and carefully evaluate every aspect of equipment acquisition.

Although the direct cost of construction equipment rental can be substantially higher than the cost of either leasing or ownership, rental can have its advantages. For example, it can be an advantageous way in which to keep the work progressing when there is an equipment breakdown on the job or to meet specialty job requirements. Rental can be very efficient for low-percentage utilization and for short-term or peak seasonal use.

Construction equipment rentals may also be considered for the purpose of evaluating machines for eventual purchase or to fill in for units that are being repaired. Construction equipment is not rented for a guaranteed period and can be returned at any time. Rental can be a valuable option when the job site is far removed geographically from the contractor's other operations, or for providing specialized items.

Construction equipment maintenance and repair are the responsibility of the dealer or rental yard. Rental can conserve company capital and give a better ratio of assets to liabilities. Many equipment centers now specialize in the rental of construction equipment. Rental rates normally vary with the length of time a unit is needed, with the short-term rates being higher. It is often possible to arrange rental with an option to purchase.

There are advantages and disadvantages to all three types of construction equipment acquisition and ultimately the decision the purchase, rent, or lease is dependent upon the specific circumstances and objectives of the construction concern making the decision. One thing is for sure though, construction projects can't be completed without construction equipment so the machinery will have to be acquired in some manner before the project can begin.

Considering that generally booming nature of the construction industry and the amount of money involved in the construction equipment business, more entities are throwing their hats into the ring and that can only be good as that means more choices when it comes to construction equipment acquisition.