Heavy Equipment

Construction Equipment Leasing

Construction equipment leasing is a common and widely used means of acquiring equipment for terms of one year or longer and has several potential financial advantages for the contractor. Construction equipment leasing is a useful step between renting and buying. This form of financing is considered an operating expense, not a liability, as with a commercial bank loan.

Construction equipment leasing can improve a contractor's working capital position by avoiding having funds tied up in fixed assets. Thus, contractors can use construction equipment leasing to acquire equipment without adversely affecting their budgets. Construction equipment leasing can require no initial cash outlay because it can provide complete financing of the equipment.

Certain tax advantages are possible with construction equipment leasing, and options can be added as necessary to meet a given contractor's needs. Under certain circumstances, lease payments compare favorably with ownership costs. Many construction equipment leases provide that, at the expiration of the lease period, the contractor has a purchase option if there is a continuing need for the machine and if it is worth the additional payment. Construction equipment leasing agreements normally extend for periods of one year or more, whereas renting is for shorter terms.

Purchase of new or used construction equipment is the most common method of acquiring units that receive substantial usage in the contractor's field operations. The purchase of construction equipment is a major management decision and is one deserving of careful study. Considerations such as present and future need, cost, unit size and capacity, and model reliability are important aspects of selection.

A major aspect of the decision is how the acquisition is to be financed. When purchasing equipment, the contractor is well advised to investigate the source of that equipment. Construction equipment obtained from full-service, factory-authorized distributors usually costs more but can offer added value to the customer in the crucial areas of service and parts, support, product warranties, purchase options, and manufacturer/distributor financing plans.

When purchasing construction equipment, contractors are increasingly looking at used construction equipment which offers many advantages over new equipment. Obviously, the biggest consideration is cost and used equipment costs less. And if the construction equipment is bought locally the transportation charges will be minimal too.

On the other hand, construction equipment leasing is being offered by an increasing number of dealers and manufacturers who are offering fantastic terms in an effort not to let the business get away. Current market forces are providing more choices for consumers looking for construction equipment.

Still another option to construction equipment leasing is to purchase through an auction. Even eBay has a special category devoted to buying and selling construction equipment. This makes it extremely simple for buyers to check and see what type of used construction equipment is available on the market but do your due diligence before you buy construction equipment on the Internet. Be certain you are afforded the opportunity to inspect and test the equipment before parting with your money.