If you work in construction or landscaping, excavators are essential equipment. These versatile machines can handle everything from creating holes for backyard swimming pools to digging foundations for large commercial buildings.
When it’s time to add another excavator to your fleet or replace an aging machine, you’ll need to decide whether buying or renting is the better solution for your business.
Understanding the Cost Breakdown
For most companies, price is one of the most important factors when deciding whether to rent or buy an excavator. Your current financial situation will play a significant role when acquiring equipment.
So, how much does it cost to rent an excavator? This expense can be minimal compared to buying. You won’t have to make a down payment, which frees up business capital and avoids the need to make a long-term commitment. Most rental companies offer daily, weekly, and monthly programs, and you can decide which option works best for your budget and needs.
Factors that can impact the cost to rent an excavator include:
- Make, model, and year
- Rental period
- Excavator rates per hour
- Machine pickup or delivery
- Operator training, if needed
When you purchase an excavator, you benefit from having access to the equipment whenever you need it. However, purchasing equipment requires a substantial upfront investment, especially if you’re not trading in another machine.
These variables can determine how much you pay to buy heavy machinery:
- Make, model, and year
- Local market demand
- Technological features
When Is the Right Time to Rent or Purchase an Excavator?
Why do you need to add another machine to your fleet? Assessing your project goals can help you make a financially sound decision.
Renting an Excavator
Renting can be the best solution if you only need the machine for a temporary job or there’s a sudden demand in your company’s project load. In other words, you can stay on schedule without making a long-term financial commitment. For example, you may need to rent a mini or small excavator to complete a specific project for a new client.
Consider how long you’ll need the equipment so you can determine the rental costs — the longer you need to rent the equipment, the higher the rates will be.
Buying an Excavator
Purchasing an excavator can provide the best results if you need a machine to complete several jobs over a long period of time. Buying could also be more cost-effective over an extended time frame, especially if the equipment will be a core part of your fleet.
Depreciation is a key factor to consider when purchasing an excavator. Depending on the machine type, an excavator’s value could decrease substantially after only a few years. One way to combat depreciation while still owning the machine is to purchase a used model — just ensure you choose a quality option to get the best possible return on investment.
Maintenance Cost Analysis: Renting vs. Owning an Excavator
Considering the costs to maintain an excavator can be a driving factor in whether you decide to rent or buy.
An advantage of renting is that the equipment provider is almost always responsible for maintaining the equipment. The renter typically doesn’t pay for maintenance and repairs, which can result in substantial savings over time. Ultimately, renting allows you to enjoy a completely worry-free experience.
If you invest in an excavator, it’s up to you to keep it in top condition. Depending on how often you use the equipment, you may need to address signs of wear and tear frequently, which can add up.
Considerations for Financial Flexibility and Tax Implications
Your business’s cash flow situation can affect your choice to rent or buy an excavator. Ultimately, renting often has a more positive impact on cash flow than buying because it helps conserve a company’s financial capital.
In terms of tax benefits, you could be able to deduct the purchase price under Section 179 of the IRS tax code when you buy a machine. Your state may also have favorable tax laws and incentives, so it can be helpful to consult a professional to see whether your business qualifies for these benefits.
Reducing Liability and Risks: How Do Renting and Buying Compare?
Operating excavators and other heavy equipment poses liability risks, especially if an accident that causes an injury occurs.
Risk Assessment: Renting an Excavator
When you rent an excavator, the equipment provider will likely have some liability insurance to protect its interests while you’re using the machine. However, this coverage will have limits and may not extend fully to the renter. It’s important to consult with a commercial insurance agent to see if you need additional coverage to fill the gaps.
Many rental companies offer rental protection plans that can fill the void for renters, providing peace of mind. These programs often enable you to pay little or nothing for repair costs resulting from covered damages, and there’s no need to file a claim with an insurance company. They also typically offer theft protection.
Risk Assessment: Buying an Excavator
If you decide to purchase an excavator, it’s up to you to invest in liability insurance. You’ll likely need to buy a general liability insurance policy — if you don’t already have one — and possibly an umbrella plan that provides excess coverage over the basic policy.
Contact Herc Rentals for Quality Excavator Rentals
Overall, the decision whether to purchase or rent equipment depends on an array of factors — from selecting the right size excavator to factoring in your budget and project needs, one purchase option may suit your situation better than the other. If you’re still unsure, consider renting an excavator first. This decision requires less of a financial commitment, so you can get used to the equipment and see how it benefits your jobs before you purchase it.
Whether you have more questions about renting heavy equipment or want to jumpstart the process, Herc Rentals is here to help. We offer a wide array of high-quality rental excavators and other essential equipment for rent at competitive rates, backing every rental with exceptional service and support, whether you need a machine for one day, a week, or longer.
Our team takes a consultative approach — we’ll provide expert advice you can trust, including whether renting or buying is better for your situation. Ready to get started? Contact us to learn more today.