Purchasing equipment for your business or project may seem straightforward at first glance. However, owning equipment comes with many hidden costs that add up over time. Renting equipment can eliminate many of these hidden costs and provide more value for your money in Brisbane. Let’s deep dive and learn more about the hidden costs of owning equipment. Then you can decide to go ahead with equipment hire in Brisbane and experience the benefits coming your way.
Maintenance and Repairs
Owning equipment means you are responsible for ongoing maintenance. You will need to focus on repairs or part replacements to keep it functioning. Proper maintenance is crucial for equipment lifespan. But it requires time and labour costs. For example, breakdowns and major repairs can drain budgets quickly. Renting transfers maintenance responsibilities to the rental company. Therefore, you will not have to deal with equipment maintenance expenses on your own.
Whenever you encounter an issue with the machinery you use, all you need to do is connect with the owning company. Then you can get a replacement for it. Or else, you can expect the equipment rental company to fix it within the shortest possible time. You will therefore be able to save both time and effort.
Depreciation
Equipment loses value over time through wear, tear, and age. This depreciation expense does not show as an actual cash cost but must be accounted for. While rented equipment depreciates for the rental company, renters avoid this hidden cost. If you don’t want to deal with the cost involving depreciation of machinery, you should consider equipment rental. During the cost-benefit analysis of equipment ownership, this is an important factor to keep in mind.
Storage Space
Equipment needs indoor or covered storage space when not in use. This required space costs money directly or through opportunity cost. You can call this equipment storage costs. Renting only requires storage while the equipment is on rent, saving space long-term. When you rent equipment, you don’t need to worry about storage space. You will only have to store equipment during the time you use them. The equipment rental company will deliver equipment to you when you start work. Once you complete the work, the equipment rental company will take them back. This is one of the most prominent equipment rental advantages.
Insurance
If you own equipment, you will need to insure it against damage, theft, and other losses. The equipment rental companies will usually insure their equipment. This will help you to overcome the cost of insurance. In other words, it will significantly reduce the total cost of ownership (TCO). Renters can also purchase loss damage waivers for added peace of mind. If you are trying to compare rental fees vs. purchase prices, you need to include the cost of insurance in your equation. Then you can see how much money you can save.
Opportunity Costs
You will have to spend a considerable amount of business capital to buy equipment. When you block money on equipment, you will not be able to invest it anywhere else. For short-term needs, the opportunity cost of ownership can outweigh the apparent savings compared to renting. This is also one of the equipment leasing benefits to keep in mind. The rent-to-own machinery options will help you to keep your capital available for other investments. To learn more about this, you can do calculations for capital expenditure vs. operational expenditure.
Obsolescence Risks
Owned equipment may become obsolete as technology advances. You will still have unused service years left. Renting avoids getting stuck with outdated equipment. Avoiding equipment obsolescence through renting is another prominent benefit to keep in mind. You will be able to get your hands on the latest available equipment. It will help you with reducing equipment downtime with rentals.
Taxes and Registration
Certain types of equipment may require registration and taxes if you own them. Rentals include these costs in the fees, avoiding more hidden costs of ownership. You can also experience flexibility and scalability in equipment rental. To get a better idea, you may do a comparison of the tax implications of owning vs. renting.
Low usage and disposal issues
Owned equipment that sits idle still incurs costs for maintenance, storage, insurance, and depreciation. Intermittent-use equipment has a much higher cost per hour if you own them. When equipment reaches the end of life, owners must pay disposal costs or auction sale preparation. The rental company will usually take care of retirement. Rental costs will include both delivery and pick-up fees.
As you can see, equipment rental is more beneficial than buying. If you are in Brisbane, you can contact ZKL Hire for your equipment rental needs. The flexibility and convenience of renting can allow you to focus your money on growing your business instead of tying up capital in equipment. Consider both the total cost of ownership and strategic financial benefits when deciding between buying and renting equipment.
