Heavy equipment eats into a bottom line like few other expenditures, and that’s why more businesses are turning to rental services in order to cut costs and still get the job done.
The cost of ownership for heavy equipment can often be more expensive than renting when you consider transportation, storage, taxes, maintenance and more. When you own equipment, it’s always your responsibility. We think you don’t need the extra hassle, and that’s why renting might be perfect for your company as you finish work, grow and seek to reach greater gains and larger levels of reinvestment.
If you own a truck, for example, it can cost you roughly $8,500 per year just for standard payments, fuel, repairs, insurance and maintenance. If that truck isn’t being used for every job, you could be losing money on the investment. Don’t let owning your assets become a major hit to your margins or overall profitability.
You can secure significant savings when you rent construction equipment, and often the savings will be more significant when you’re looking at larger pieces of equipment that can be tough to haul, store, maintain and more. Let’s dive into the three big categories of savings that our customers and other industry experts have seen when it comes to adopting a rental model for Cat® construction equipment.
Win With Cat Construction Equipment for Rent
There are many common benefits to renting Cat construction equipment from us. Discussing the rent vs. purchase choice comes with a lot of basic elements where you can save by keeping your fleet smaller. There are three immediate areas of savings related to getting your equipment to each job, storing it when the work is done and having the right team to care for a growing fleet.
Here are a few of the savings elements you can expect, regardless of where you operate or how you plan to use any of this Cat construction equipment available for rent.
- Don’t Pay to Store It After the Job
Where does your heavy equipment live when the job is complete?
For most firms, they ship their equipment back to warehouses and lots where it can be exposed to the weather, vandals and potentially thieves. Heavy equipment can easily become damaged when it is left out in the elements and will require more checks and maintenance before it can be shipped to your next job.
Renting construction equipment in Arkansas can alleviate the concerns for your equipment by not having to care for it or maintain it when it’s just sitting unused. That not only helps you save on maintenance fees, but you also don’t need to pay to expand your lot, yard or warehousing space as you grow.
On average, a typical commercial warehouse space will cost you from $12 to $40 per square foot just for the frame, foundation and basic construction. Finishing touches like insulation or a façade designed to match your existing buildings can push you cost another $10 to $20 per square foot.
Roughly 64% of U.S. warehouses are larger than 25,000 square feet. Even at that 25,000-sq.-ft. size, you could be facing an expansion cost of $550,000 to $1,500,000. Renting means that’s a cost you don’t have to incur.
Rent the right equipment you need at the right cost by working with us, and enjoy the savings you’ll achieve by staying in your same space.
- Take Advantage of Logistics and Delivery
Working with a high-quality rental partner often means you get perks like on-site delivery of your heavy equipment. That means you aren’t going to need to rent a new flatbed trailer as well to get your crane, backhoe, loader, excavator, paver, planer or other equipment where you need it.
Renting means you have the potential to cut costs needed for transporting a fleet of heavy machinery to your next job site. You don’t have to worry about transporting equipment, hiring additional drivers or a third-party logistics support company or bringing in specialists just to move your equipment. The best time to cut costs is before the job starts.
Some rental companies can also schedule a pickup of the equipment when you’re done. That sort of on-site service will typically be cheaper — even if it comes with a service fee — than it would be to move the equipment back to your warehousing or back to the rental company’s lot. It also means you only need to schedule a pickup time, without having to plan the logistics of returning equipment during business hours.
Also, you can avoid some worries over hours-of-service regulations imposed by the Department of Transportation. Let your rental company worry about the drivers and regulations of moving your heavy machinery long distances.
- Forget Maintenance Woes
Heavy equipment normally requires a significant amount of maintenance in order to meet standard safety measures. Keeping your machinery running at peak operational levels takes even more checks and maintenance, especially when moving it in and out of storage or checking after it arrives at a job site.
Maintenance also takes inspections and testing into consideration. Sometimes this requires hiring a third-party to maintain your operational status or your operational certifications.
Rent your heavy equipment, and you can pass all of these costs on to the rental company, plus have their service techs do the full check when equipment is delivered to your worksite. Not only can this deliver a significant cost savings, but you’re also relieved of a major source of headaches.
Every worksite needs a strong maintenance and check schedule, but renting heavy equipment eases that burden and means your crew can get to work a little bit quicker. You’ll free up your time and labor with a safe start.
Cost savings also extend to your home base crew. The larger the fleet you own, the more staff you’ll need to manage and maintain it. You’ll also need more staff to care for the spaces where you keep your equipment, managers will need to spend more hours to track your fleet and security for downtime will need to expand to properly protect all of your heavy machinery.
Budget Benefits for Renting Equipment in the Mid-South
The average pre-tax net profit for general contractors will range from 1.4% to 2.4%, though subcontractors can reach up to 3.5%. These low profit margins can make it difficult for a construction company and small contractors to perform their work and take on riskier projects.
One of the best ways to start increasing your profit margin is to reduce your overhead. We believe that renting equipment as opposed to owning it can be a strong way for you to start saving your company money. The more you save now and at tax time, the better you are positioned to have a profitable business that can invest in itself and grow.
- Avoid Depreciation
One downside of purchasing equipment and vehicles is that their value starts depreciating almost immediately after purchase. The longer you own the equipment, the lower its resale value when your job is done or when you shift your project scope.
You may find your company staying more profitable if you simply rent your equipment and return it on time, because then you won’t absorb any depreciation costs. That can allow you to invest money in the right equipment for the right job at an affordable rate, without paying a premium or losing your shirt when it comes time to get the right machinery for your next job.
That shift in technology and equipment brings up another key way you’ll save through renting.
- Get New Technology Without New Investments
Construction equipment and best practices are always evolving. In 2016, we’re already looking at a new type of cement that could allow concrete to resist damage and structural loss from de-icing salts, making roads and sidewalks stronger and longer-lasting. The construction world never stands still, and neither will your equipment needs.
Heavy equipment runs the risk of generating a significant budget hole when it becomes obsolete. The next version or latest certification requirements can cause your business to spend a lot on a new piece of machinery. It’s a double-hit in most cases because you also can’t sell the heavy machine for the resale value it had a month before. You’re limited to selling it for parts or scrap in many cases.
And sometimes, there’s almost no sale option left because a new regulation can make a piece of machinery immediately obsolete. Environmental regulations can impact your bigger machines, or local ordinances can crop up and limit what you can use, sometimes with little warning for your business to sell off the asset.
Construction firms have even faced risks when clients see older equipment — or some that are less environmentally friendly — and don’t allow that machinery on their worksite. That’s an immediate hit because you’ll need to replace the equipment right away or risk losing money as the project grinds to a halt.
Renting your equipment can avoid many of these risks because you’re able to upgrade with each new project and likely have some contract protections against equipment that becomes obsolete or cannot be used in the area where you work. The company you rent the equipment from is bearing the vast majority of the obsolescence risk when you two make an agreement.
- Improve Your Cash Flow
Cash flow is essential for any thriving construction company. We believe renting construction equipment in Arkansas might be the easiest change your company can implement to ensure your cash flow is positive and accessible.
Purchasing new, heavy equipment can turn your flow into a trickle and make it more difficult for your company to address immediate concerns that crop up. Sometimes your staff will forget to call before they dig and hit a utility line, or ground can shift as you try to lay a foundation. You’ll want as much available cash as possible to address these concerns.
Dropping a lot on major machines you might not use on your next job could end up costing you a lot more than just their sticker price.
- Save Extra at Tax Time
Here’s something you’ll love if you considering renting equipment in the Mid-South: You might just save on your taxes!
According to the IRS’s website, you’re allowed to deduct the rent you pay for equipment that you use on a rental basis. It’s worth noting that these same deductions are not available on all lease contracts. If you’re leasing to own or have the option to purchase at the end of a lease, then the IRS may consider this a purchase contract so you cannot deduct any lease payments.
Now, you can recover the cost of purchased equipment through depreciation, but that isn’t a clean tax deduction. Depreciation deductions are smaller amounts than the purchase cost of your equipment and they are spread over years instead of being a single-year, lump-sum deduction.
As always, tax advice is specific to your unique situation, but in many cases you’ll have tax benefits and deductions available to you when you rent heavy equipment.
Operational Efficiency With Construction Equipment for Rent in the Delta
Looking past your budget sheet, there are a few operational benefits you’ll discover with renting your heavy machinery. Industrial and construction equipment that is the right fit for each jobsite can help you achieve a greater operational efficiency that isn’t always a realistic option when you own equipment.
Here are a few aspects where you can look at equipment rentals in the light of making your next jobsite run more efficiently and more effectively based on the job needs and the team you have on your site.
- Test What Works
When you have a new job or are meeting a client need for the first time, it can be difficult to know exactly what you need. Renting provides a significant benefit over buying in this case because you’re able to test out the heavy equipment and see if it fits the job you have.
If your rented equipment doesn’t fill the need, you’re able to rent other equipment and discover the best fit. This prevents you from spending too much on something that won’t be able to generate a specific return on your investment and make the purchase profitable over the long term.
Sometimes there are a couple different pieces of equipment that can fill a role for your company. Renting allows you to test out several options and give your team a chance to learn each one. That allows your supervisors and workers the opportunity to discover what works best and what equipment operates most similarly to the machinery already on your site.
Matching controls, brands and even fuels can deliver better work productivity. The less time your team needs to spend to learn the basics or bring specific equipment for each machine, the sooner you can get the job done right.
Even if you plan to eventually purchase, it’s hard to beat giving heavy equipment a real-world test run.
- Scale up Only When You Need It
You may own almost everything in your fleet, but we bet there are some times where you need a little extra help. You might be aiming to get a job done on schedule, or you’ve got an opportunity to secure a new project if you can start it sooner than a competitor.
In these cases, you’ll need a little extra power for a short push, but you might not have the space or need for a longer-term investment. Cat construction equipment for rent can give you the best-in-class service you need at a rate that you can afford. So, you’ll be able to scale up to meet the short increase in demand.
Riggs CAT can help you out with new types of equipment or multiple units of machinery that you know you need. In almost all cases, it’s more affordable for you to rent temporary units than to purchase them outright and then have to find new projects where you’ll have the increased need.
- Customer Service for You
Maintenance and repairs always throw a wrench in operations and can significantly hurt your operational efficiency. This is true whether you own or rent the equipment that’s having an issue.
There is a benefit to rentals, however, and that is the customer service benefit you’ll receive from Riggs CAT. When you rent construction equipment in Alabama from us, you’ll have us behind you full-time in case of a maintenance issue or emergency.
Our rental staff knows our equipment well, and we can also make suggestions for Caterpillar subs to existing equipment or based on new needs. We’ll show your teams how to safely operate new equipment, help you troubleshoot common problems or even provide replacements through our Rental Protection Plan (RPP).
We’d love to guarantee that everything will work 100% right 100% of the time, but that’s not realistic, especially when it comes to the stress and strain the job can put on heavy equipment. That’s why the RPP is your backup, and it helps us know that we can get you the perfect replacement as soon as possible. Here are just a few of the highlights of the RPP that Riggs CAT offers:
- Coverage of losses due to fire, theft, vandalism, hail, earthquake, flood and wind.
- Losses from accidental damages, except for intentional abuse.
- No need to provide proof of physical damage insurance before you rent equipment.
- A cost that is lower than regular insurance plans.
- Meet Your Competition Even as You Grow
Smaller construction firms often face operational efficiency challenges as they scale up. You can see larger-than-expected increases in your operational costs as you bring on new staff, take on more complex projects or step into new arenas.
Diversifying your work and going after the bigger, lucrative contracts doesn’t have to be something you keep putting off because you don’t have the same cash flow as a larger construction company. You can demonstrate the same capabilities and resources through renting the equipment that’s right for the job.
As we discussed with technology and machinery updates earlier, it can be expensive to have the latest and greatest. Many large firms will use that to their advantage, touting environmentally friendly capabilities and new construction techniques when they respond to an RFP.
Your company can achieve the same results and broadcast the same capabilities, but at a lower cost in most cases, when you rent the same type of equipment. You won’t face the significant investment cost to keeping up with the heavy-equipment Joneses. Smaller brands can use heavy equipment rentals to level the playing the field, bolstering existing equipment with new capability-focused models.
Keep things affordable and stop losing business.
When you search for construction equipment for rent in Delta, we know that you see a lot of companies around offering a wide range of equipment. We always recommend that you look for Caterpillar because you can’t beat the industry standard and the industry’s best.
Riggs CAT offers eight locations that can serve you with the best Cat equipment to fill a wide range of needs for many different construction needs. We also have a partnership that created a warehouse chain of the largest Cat parts available in the Mid-South, ensuring 24-hour parts availability for the equipment we sell, rent or repair.
Expand whatever equipment you need from aerial work platforms and air compressors to articulated trucks and heavy-duty excavators. We’ve got a full rental fleet available to you under our Riggs CAT brand.
Whether you want to rent or you’ve considered trying it before you buy, we’ll help you fit the right equipment for your needs. Rent a piece for short-term use, replace a machine being repaired or look for a rental plan that grows with you. Get started by contacting Riggs CAT and start your journey to savings.