Construction Equipment Rental Vs Purchasing

Is construction equipment rental replacing construction equipment purchases? According to recent data from construction equipment rental companies and dealers, the construction equipment rental market is growing rapidly. So there's a new contender in the competition for construction equipment dollars. The majority of the money used to go to banks and credit unions that specialize in construction equipment loans but an increasingly larger piece of the pie is now going to construction equipment rental companies.

It's estimated that nearly $600 billion was spent on production assets with just over a quarter of it going to construction equipment rental companies. And less than five person of construction equipment is currently rented. As interest rates are rising, forecasters predict growth in the construction equipment rental market.

One construction equipment rental company with more than 30 years experience is seeing continuing growth in construction equipment leases which make up about 40 percent of nearly $400 million in leases. Some construction companies like the personal service and flexible leases construction equipment rental companies can offer based on their needs and cash flow.

Construction equipment manufacturers are not blind to the change in the construction equipment rental market and are fighting aggressively to attract more of the construction equipment rental spending in their direction. They're doing their best to offer better terms than the companies that specialize in construction equipment rental and they can offer newer construction equipment to boot.

The manufactures are noticing that construction equipment leasing moves inventory faster and that always good for business. Case increased its construction equipment leases by over 50% in one year and is expecting to offer a special program especially for used construction equipment rental.

Construction companies say leasing provides them with better equipment for the same monthly payment. With the same monthly payment on new construction equipment, they'd have to settle for construction equipment not quite as good so there's more bang for the buck in electing to forego purchasing in favor of construction equipment rental.

Dealer benefit from construction equipment rental too. The dealers receive payment in full from the leasing company while the construction equipment rental firm is responsible for collecting payments from their clients so the dealers don't have to worry about it.

Dealers also find that construction equipment rental helps them move their inventory more quickly by being able to offer more affordable and flexible payment schedules to customers. And since ownership is not transferred under a lease, if customers fall behind on their payments, dealers can take back the equipment without any legal hassles over ownership.

Construction companies aren't so concerned about ownership anymore. They're more interested in completing construction projects as quickly as possible so they can move on to the next one and if construction equipment rental allows them to accomplish that objective, they'll take it.