For all types of material-handling equipment, businesses often rely heavily on rental equipment in order to meet their needs – especially if those needs are unplanned or infrequent. A piece of rental equipment is usually seen as a ‘stop-gap’ measure in order to provide a specific need at a specific time, or a specific need that does not occur on a frequent basis. But what then happens when rental needs increase in frequency? Do you keep on renting, or should you go ahead and buy your own equipment?
How do you decide when the time has come to stop renting and to purchase a specific piece of material-handing equipment?
The answer is to carefully consider the key aspects of the rental and purchase option. If you do this, then you will be successful in making the right decision with regards to your business’ needs.
Renting or Buying — Which Is More Appropriate For You?
When it comes to material-handling equipment and your operational needs, there are two main issues that you need to consider. The first is how frequently you will need to use this particular piece of material-handling equipment, and how versatile the piece of equipment is likely to be.
With high frequency use and versatility, the answer is always to purchase, no matter how much the initial outlay will be. You will be saving money in the long run, because you’ll not have to shell out significant resources whenever you need to rent the equipment.
When It’s Time, It’s Time!
If your operational floor is likely to use the piece of material-handling equipment enough over its extended, functional life, then the case to make a purchase becomes something of a no-brainer. Also, over the long-term if the total cost of renting a piece of equipment outstretches the purchase and likely maintenance costs over the same period of time, then it makes perfect sense to go for the purchase option.
The only ‘awkward’ factor of this evaluation is that you are attempting to predict future events. It is therefore crucial that you plan carefully in estimating future patterns of usage. The worst thing you can do is over-estimate the use you will get out of a purchased piece of equipment and then see it sitting dormant in your warehouse, month after month.
Try Getting a Versatile Piece of Material-Handling Equipment
Versatility will also have a significant effect on the frequency of use. The more versatile a piece of material-handling equipment is, the more use you are likely to get out of it. You may also be able to specifically customize a piece of equipment so that your company can get the most out of it. Doing so will significantly increase a specific piece of equipment’s particular usefulness. Of course, if you attempt to customize a piece of rental equipment, the chances are the rental cowholsale distrubitormpany will not be very pleased about it!
Good for Emergency Situations
The only real reason for renting material-handling equipment rather than buying it would be to cover emergency situations that occur on a very infrequent basis. Purchasing equipment will always be the best option for equipment that’s low maintenance and is used regularly. Any piece of equipment that you use daily should be bought, rather than rented.
Renting or Buying – How to Make the Decision?
The easiest way to make a definite decision regarding renting or buying is a cost-comparison or risk-assessment approach. It’s practical business sense to establish your business on a risk basis. This will enable you to make the decision to purchase equipment rather than rent in situations where initial (or ongoing) cost is secondary to reducing risk. For example, you may find that your operators are using equipment in an inappropriate manner such as over-loading a forklift or a handcart.
How About the Cost?
Moving on to a cost comparison factor will help you decide to go for purchasing over renting equipment if other issues seem to point towards a balanced trade off. It is quite simple to compare the cost of renting a specific item of material-handling equipment as opposed to purchasing it. All you need to do is factor in the purchase cost of a piece of equipment, its expected lifespan, and associated maintenance costs over that lifespan. This can be compared to the number of rentals of the same piece of equipment per month or year, the monthly rental rate, and any additional costs such as charges for delivery and pickup.
Don’t forget to factor-in ownership costs as well, plus you should be able to recoup some of the initial purchase costs by selling the item of material-handling equipment before it reaches the end of its useful life.
The New vs. The Old and Used
Here at Douglas Equipment we most often recommend purchasing equipment over renting. When you purchase any kind of material-handling equipment, you will be receiving an item that is brand new. With rental equipment, you are likely to be receiving an item that’s been used multiple times, and that has been used at a large number of different locations and conditions. Although most rental companies do their best to keep the equipment they provide in good condition, you can never be one hundred percent certain that the items you receive will be one hundred percent operational.
At Douglas Equipment We Most Often Recommend Purchasing over Renting
With Douglas Equipment you can be assured that you’ll always receive the very best in equipment, and from only the best suppliers in the business including established names like Morse, Wesco and B & P Manufacturing, just to name a few. Whatever your specific material-handling needs are, we’re confident we can help.
If you would like to discuss any types of material-handling equipment we are able to provide for you, please reach out to our team today. You can call us toll free any time at 800-451-0030, or 305-888-3700 if you are in the Miami area. You can also use our online contact form if it’s more convenient.