Want to add new heavy equipment in your inventory? Knowing how to add and pay for equipment can be challenging as you prepare for the busy oil field services, construction, and forestry seasons. The equipment you require this fall and winter may not be the same as what you need the following season or even the next job. Here are some things to consider before purchasing your next piece of heavy equipment.
1. How long will you use the equipment for?
Whether you need to add trucks and flat beds for short hauling contracts or replace mini excavators that you want to use for the next five years, knowing how long you intend to use the equipment will help you choose the best purchase option.
2. What are your leasing and financing options?
Sometimes you don’t know how long you’ll need the equipment because you’re not sure when or what the next task will be. If you are unsure, you can inquire about terms that provide for flexibility, such as trade-up programs. Some organizations offer trade-ups, leasing and financing options, allowing you to shift from one piece of equipment to the next. You can do so without incurring significant penalties if the next asset is roughly the same price as your present lease.
3. Should you need a short-term rental or lease?
You could consider renting to “try out” a unit for a few months and see if it works well for the project at hand or to avoid obligations until additional work becomes available. Short-term equipment rentals allow you to walk away from the equipment with month-to-month payments, but they can result in substantially larger payments and little (or no) equity in the asset. A lease provides lower monthly payments and equity, but most corporations limit your flexibility once you sign the lease agreement.
Conclusion
A typical rental might cost two to four times more than a lease. A $4,000 monthly equipment rental for six months is $24,000 in payments, and in most circumstances, purchasing the asset does not result in significant equity growth. That same asset might be leased for less than $2,000 per month, allowing you to spend the same or less than $24,000 over the course of a year.
If you are ready to buy an equipment and need equipment financing in Abbotsford, rely on Sandhu & Sran Leasing & Financing. We also specialize at truck loans and commercial leasing in Abbotsford to help you expand your inventory without having to pay a hefty amount upfront. For more details, give us a call today.