Whether you are supervising a construction site or starting a construction business, the ability to manage your costs is of the utmost importance. As such, deciding whether to buy or lease equipment is a critical consideration.
Ultimately, whether you should buy or lease construction equipment depends on several factors, including the duration of the project, upfront capital and immediate needs, and how much control you want over the maintenance and usage of your equipment.
Here are several pros and cons of buying or leasing construction equipment to assist in determining which option is best for you.
Buying Construction Equipment
Just like some prefer to buy a car instead of leasing one, some prefer simply to buy their construction equipment instead of leasing it for a set term.
Usually, it makes sense to purchase construction equipment you plan on using almost daily. Equipment owners also have full control over equipment maintenance, and can claim tax deductions for depreciation, insurance, and interest and repair expenses.
Pros of Buying Construction Equipment
Leasing Construction Equipment
An equipment lease is essentially a loan arrangement in which the lender owns the equipment and leases it to a contractor at a flat monthly rate for a specified term. Leasing construction equipment provides some of the benefits associated with ownership of equipment, while mitigating the downsides of ownership. When the term ends, the lessee can decide whether to buy the equipment, return it, or upgrade to something better.
Pros of Leasing Construction Equipment
Cons of Leasing Construction Equipment
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