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Benefits Contractors Can Enjoy by Hiring Equipment

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According to the United Rentals report dated in February 2011, there was an increase of 10.4 percent during the last quarter of 2010 for the revenue earned through equipment rental. This just shows that more and more construction contractors are preferring to rent construction equipment than buying or leasing them.

But what is the difference between renting, buying, and leasing? And how can it affect the financial and strategic outcome of the company?

Renting generally refers to a contract or agreement to utilise equipment in a short term basis whether daily, weekly or monthly with the decreasing rental rate as the contract time extends. Leasing, on the other hand, is a long term agreement with a specified rate, while buying means the outright sale or purchase of the construction machines.

While it is buying give you complete control over the usage of the equipment, it also means that you would need a veritable source of cash to use as a down payment. The bought equipment could also lose its value or become antiquated after some years. Highly trained personnel are needed to operate the equipment. Certification and licences must be procured for the machine as well as the operator.

Here are other benefits to consider when it comes to plant hires.

1. Capital release
For contractors who are eager to generate high levels of profit compared to invested capital, renting is always a better choice. It minimizes equipment fleet, improves cost control, lowers maintenance costs, decreases staff cost and reduces transportation fleets costs.

2. Range of equipment available
Equipment inventories of most renting companies are massive and varied. You can hire specialised machinery for trenching, drainage and footings, as well as land clearing, detailed earthworks, or general site clean ups. You are also open to try out new state of the art machines depending on your construction concerns.

3. Compliance with industry standards and regulations
Plant hire equipments are usually ensured to comply with all the applicable regulations stated by industry standards. They are also checked for safety before release.

4. Saves time and money through availability and access
There's less responsibility for repairs or maintenance, and the firm can take advantage of a current year tax deduction, as well as preserve upfront capital for emergencies or other priorities because it is only responsible for paying for the time the machine is actually used.

5. Access to well-trained equipment operators
You would not to train or hire workers to get the job done. Experienced individuals are available to start on your project.

There are a lot of merits to hiring compare to buying. So weight things carefully with regard to equipment acquisition.