Should you rent or buy? That’s the question many startups and established businesses are asking themselves. In uncertain times, the answer isn’t always straightforward.
Enter rent to buy schemes.
Whether you’re starting out and building your business, or adding to an existing fleet – rent to buy schemes may just be the foot up you need. But how does rent to buy work?
If you’re looking for access to new or more equipment for your business – laying out funds for renting equipment may have its short-term advantages – but this may not be the most viable option for your business – especially when it comes to growing your independence and versatility.
What is a rent to buy scheme?
Rent to buy is an alternative pathway to ownership of an asset. Instead of hiring the equipment and handing it back, you maintain control over the asset while you pay rent – eventually working towards full ownership.
Along the way, part of your rental payments go towards reducing the final buyout price and you gain all the benefits and flexibility of hiring equipment – (like lower maintenance costs) while ultimately working towards ownership of the asset.
Should I buy or rent heavy equipment?
If you require more equipment – maybe you’ve got some big projects lined up, or you’re upgrading an existing fleet – either way, buying and renting both presents vastly different opportunities and challenges – no matter how long you’ve been in the business. The decision to rent or buy therefore becomes more complex – especially given every company has its own budget and timeline. Here are some considerations:
Ongoing costs and job frequency and length
Renting minimises ongoing maintenance costs, plus you get flexible renting timelines – for example, you might only need a certain piece of equipment once or twice on a job here and there. Other ongoing jobs might involve the use of machinery over the long term – making a rental contract more expensive.
Your budget and future plans
Some businesses just aren’t in a position to buy. Renting is a great way of avoiding upfront costs and moving easily from project to project depending on your needs. On the other hand, some businesses might need stability for more long-term projects and to be able to plan for future projects. A rental contract might become a liability if your rental contract has conditions on use and availability.
Fleet management capability
If you buy – you’re going to need to insure, maintain and service your fleet either in-house – or via a third party. This can be expensive. Renting offers you more freedom in this case, but can still be a source of unpredictability if your project gets extended or cut short.
Why should I rent heavy equipment?
Renting offers you more flexibility – especially over the short term. Say for example you start a big project. You expect the project to last half a year and you go out and buy the equipment you need – with the knowledge that another similar project is in the pipeline. Your second project falls through and your initial project is cut short. Now you’ve got machinery on your hands with no job in sight. Waiting for another project may take weeks or let alone months. Now you’ve got servicing and upkeep costs to contend with. Renting gives you the flexibility to avoid these scenarios.
Benefits of buying equipment
Buying your machinery on the other hand offers more stability and increased flexibility – just in different ways. Buying machinery offers businesses more control and the ability to plan future projects with confidence. You may also avoid excessive transport fees – delivering equipment to and from rental yards.
Why does rent to buy make sense?
Rent to buy gives you the best of both worlds. At Vermeer, our rent to buy scheme allows you to gain ownership of your rented equipment – by paying off your final buy-out sum over time. This gives you the flexibility to get the jobs you have on hand done – while ensuring stability down the line.
What are the benefits of the rent to buy scheme?
As a business owner – rent to buy offers an alternative way forward to getting the equipment you need to meet your project deadlines without the financial stress associated with financing a purchase or renting endlessly without gaining anything over the long term. You can also track your financial earnings without any hassle of commitment.
Get the equipment you need. Contact the experts at Vermeer WA & NT
Your productivity depends on the versatility and integrity of your fleet. If you’re thinking of making the leap and getting new equipment, have a chat with our sales team and find out more on how does rent to buy work – you might be surprised at how your business could benefit.
