The construction industry is highly competitive; it’s not unusual to see dozens of contractors bidding to win a single contract. Because of this, many contractors are forced to lower their bids and decrease operating costs.
One of the biggest costs contractors face is heavy equipment ownership. Believe it or not, the true cost of heavy equipment isn’t the upfront cost; rather, the hidden costs of owning and maintaining the equipment are the true money pits. Before you make the decision to buy equipment you may not need, consider these lesser-known, but significant costs of ownership.
That’s right, simply because you own the equipment doesn’t mean you have the space to store it. First, the lot you choose for storage has to be secure. That means barbed wire, fencing, and perhaps even security cameras. Once you have that taken care of, you need to ensure that storing the equipment there doesn’t violate any local ordinances. Many localities put weight, parking, and noise limitations within their jurisdictions.
Obviously, you can’t drive heavy construction equipment on the road just like a normal car. You’ll need the towing equipment and licenses to drive them. Think about this, many states have road patrol officers responsible for exclusively monitoring commercial vehicles on the road and the fines for breaking any rules are usually much higher than those of a normal vehicle.
This term may sound familiar from your days in economics class, but it’s not some abstract idea. The money you spend on heavy equipment and ownership is a sunk cost. That means you can never spend that money on something else that may yield a greater return, such as hiring more employees or advertising. Before you make the decision to purchase, ask yourself if it’s truly the best way to spend that money.
Other Hidden Costs
These a just a few of the hidden costs of ownership. When you purchase heavy equipment, you also have to consider insurance, maintenance and repair, depreciation, scrapping old equipment, safety precautions, and more. Thankfully, there’s an alternative.
Renting / Leasing Equipment Saves You Money Every Day
By now, you may be thinking, “Yeah that’s great and all, but I need the equipment to get my jobs done.” Of course you do, but owning isn’t the only option. Consider renting instead. By renting, you eliminate nearly all the normal costs of ownership, making the process much more affordable.
While common logic says that renting is more expensive, that isn’t the case when it comes to expensive heavy equipment. If you’re considering renting equipment, you obviously don’t use it every day but on a project by project basis. However, if you buy it (knowing that you are not going to use it every day, or even every week for that matter), you’re actually losing money considering the fact that you probably might not have enough consecutive projects to use it every single day thus justifying the ownership cost of it. That means there will necessarily be times when you’re paying for a sophisticated machine to be sitting there, doing nothing. When you rent, you only pay when you absolutely need it to complete the job. Even if the daily cost of renting is slightly higher than owning, you’ll easily save money in the long run.
Norton Equipment Rental
Ditch the burden, stress, and costs of ownership and rent that heavy equipment that you need sporadically from Norton Equipment Rental and get the job done at a fraction of the cost. Norton Equipment Rental offers great rates on lifts, excavators, backhoes, skid steers, paving equipment, and more. We also offer flexible rental terms ranging from a few hours to months at a time. Give equipment rental a try and your bank account will thank you for that!