Is Used Equipment Right for You? Rent, Lease, Auction or Buy Guide
Rent, Lease, Auction or Buy: Your Guide to Used Equipment Ownership
When it comes to sourcing additional equipment for your fleet, you have some ownership options- but do you know which is the right fit? Depending on your needs, renting, buying, bidding on or leasing used equipment may be the optimal choice. This guide will lay out the pros and cons of each ownership option so you can make the right decision for you, your business, and your worksite!
Renting
Some used equipment companies offer rental options, which allow you to use a heavy machine for the duration of your project and return it once you’re done. Before you rent, consider these pros and cons.
Pros
| Lower Upfront Costs: you take on a lower cost when you rent. You pay a rental rate for the equipment only while using it. |
| No Long-Term Commitment: renting is the most flexible ownership option. If you’re feeling non-committal, you can return equipment when the rental period is over. |
| Try Before You Buy: if you are feeling committal, the ability to try out a piece of equipment before you purchase it can be a great plus for renting. |
| No Maintenance Worries: most rental companies take responsibility for their used equipment maintenance- but check the terms of your rental agreement to make sure. |
Cons
| Higher Long-Term Costs: renting might be cheaper in the short run but could end up costing you more if you need the equipment for an extended period. |
| Limited Customization: you won’t be able to alter or customize rented equipment to suit specific worksite needs. |
| Limited Availability: depending on demand and time of year, the rental equipment you need may not always be available when you need it. |
| No Equity: when you rent, you’re paying for equipment usage without any of the perks that come with ownership- like selling and profiting. |
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Leasing
Leasing is a good middle ground between renting and buying. For a longer-term option without the pressure of purchasing, consider a used equipment lease- but keep these factors in mind.
Pros
| Flexibility: leasing agreements tend to be more flexible than renting. You are often able to negotiate terms and customize the agreement to your time frame. |
| Tax Benefits: oftentimes, lease payments are tax deductibles. Check your local laws around leases and tax benefits to make sure. |
| Preserve Capital: unlike buying, you don’t have to worry about all your cash being tied up in one piece of equipment. |
| Option to Purchase: at the end of your lease, it’s not uncommon to be offered the option to buy. If you decide the piece of equipment is a good addition to your fleet, leasing agencies usually make it easy to purchase. |
Cons
| Higher Long-Term Costs: like renting, leasing over time may incur fees that are higher than the price of the equipment itself. |
| Fees: unlike renting, maintenance fees may fall on you. Additionally, there may be other costs like penalties for ending the lease early. |
| Restrictions: you won’t be able to customize equipment to your liking and you may have to watch out for usage or mileage caps that limit your work. |
| Depreciation: if the equipment’s value drops during the lease term, you’ll likely end up paying more than it’s worth by the end of the contract. |
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Buying
Buying used equipment means immediate ownership, unlike leasing or renting. It’s a great option for those who have the capital to invest in a piece of equipment that suits their exact needs. Before you buy, consider these pros and cons.
Pros
| Ownership and Control: once you buy, you have complete control over modifications and usage- unlike renting or leasing. |
| Long-Term Savings: after the initial purchase, you’re not tied to monthly payments. This can save you money in the long run. |
| Resale: when you buy, you get all the benefits associated with the equipment- including a potential sale profit once you’re done with it. |
| Depreciation Deductions: you may be able to write off depreciation expenses for tax purposes. Check your local laws around equipment depreciation and tax benefits to make sure. |
Cons
| High Upfront Cost: buying equipment will run you the highest upfront cost out of any ownership option. This could be a strain for smaller businesses and projects. |
| Maintenance & Repairs: as the owner, you are fully responsible for the maintenance and repairs associated with your equipment. |
| Obsolescence: equipment can become outdated over time, and you may find yourself looking to upgrade. |
| Depreciation: new and used equipment will depreciate over time. Depending on the equipment, the resale value and tax deductions may not cover your initial investment. |
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Auctions
Like buying, purchasing used equipment through auctions means you’re assuming full ownership. However, there are a few factors that set this option apart from the rest.
Pros
| Potential for Good Deals: bidding in an auction means you have the chance to secure used equipment below market prices. |
| Variety: many used equipment auctions host sellers from all over the world, meaning you can get your hands on something you normally wouldn’t find. |
| Global Access: some auction companies allow bidders to participate online from anywhere in the world. |
| Bulk Purchases: some used equipment auctions offer the opportunity to buy in bulk, saving you money if you’re looking for multiple additions to your fleet. |
Cons
| Risk of Overpaying: if the bidding gets competitive, you may overpay for a piece of used equipment. |
| Less Customer Support: in a high-stress auction environment, your questions or concerns about a piece of equipment won’t necessarily be answered. |
| Time Limits: some auctions allow buyers to preview the used equipment before bidding starts. However, you may not get this opportunity, forcing you to make expensive decisions on the fly. |
| Additional Costs: after your purchase, you may run into extra fees like shipping, taxes, or auction registration costs. |
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Are you looking to Rent, Lease, Auction or Buy?
Fused offers used equipment for sale and auction, but if you’re still unsure, our team of experts will provide you with everything you need to know about equipment ownership. Whether you’re shopping for a Cat 335F or a John Deere 317G, we have something for everyone!
If you’re looking for used equipment but still need some pointers on the right fit for you, reach out to our team!