Presently, construction industry is blooming but in a slow speed. In this situation, is it better for a construction company owner to lease, procure or rent a bulky paraphernalia? According to Peter D. Gregory, the senior vice president of the reputed construction group of Atlanta commented that right now the condition of the market is tentative that’s why the construction company owners are hesitating to procure heavy equipment or go for leasing deals. Yet, the construction concerns still require bulky paraphernalia to accomplish their task on the site.
In large organisation, the construction business possessors hire equipment managers and chief financial officers to give suggestion on the issue of renting, leasing or purchasing the heavy equipment. On the other hand, in the budding construction firms, the owners alone take the decision. The presidents of some of the well-renowned construction companies stated that the decision entirely counts on the financial condition of the organisations. To determine, which one is the most suitable one needs some logical prediction and forethought. Here in the following piece, the readers will come to know the difference between the buying, renting and leasing a heavy construction equipment.
Renting, Purchase and Leasing Options for Construction Site Contractors
Rent option helps the contractors to save their capital. Often, they choose the option of renting when they require a specific item for a particular task. Some of the well established construction merchants stated that renting is more costly than lease and purchase options because it provides flexibility to the clients.
When the contractors procure heavy construction apparatus, the dealers not only proffers instant ownership but also subtracts the depreciation cost of the equipment. The interest the possessors get form the deduction helps the construction firms to conserve their tax amount. Majority of the construction organisations prefer to buy heavy equipment parts as it adds as a valuable asset in the in the balance sheet. But, the majority of the budding construction owners prefer to go with the lease option because of the Alternative Minimum Tax (AMT).
Lease is yet another option that is facilitated to the construction company owners by the dealers. It is the best choice for those organisations which are not efficient enough to utilise the depreciation. Other than ownership, this option also provides usage pact with typical no money upfront quality.
Comparison Between Lease, Rent and Buy of Heavy Construction Equipment
For long term use, the charge of the lease is much lower than the renting cost. Therefore, it is sensible for the contractors to avail the benefits of leasing heavy equipment for long term basis. If the construction company owners desire to attain the equipment, then the outright purchase technique is more economical to other alternatives.
On the other hand, for short term purpose, the option of renting heavy construction apparatus is the best. If any construction concern owner wants to go with the buy option, he/she should asses some factors like time duration of the application of the equipment and its maintenance cost.
To sum up, it can be said that all the above mentioned options of availing the benefits of heavy equipment are beneficial to the construction owners unless and until they have the skill to attain it in proper way.