Backhoe Loader Basics: Renting and Buying
It's a well-known fact that the Backhoe Loader is undoubtedly the most popular equipment on construction sites around the world. Be it small time builders or MNC’s working around the world, the familiarity and fondness of the backhoe is universal. Backhoe loaders have even managed to find their way in fleets of road construction machines in line with the millers’ pavers and compacters. It comes as no surprise though given its compact size, maneuverability and power. That being said, one can’t deny the fact that a backhoe loader is a high value depreciating asset. Weather one rakes in profits or sustains losses depends entirely on how they choose to utilize it.
When it comes to one wanting to put a BHL to use on the job site, there are two options to choose from viz buying and renting. Both these choices have their own set of pros and cons based on the different variables that come into play. Below are some pointers that will help you make the best choice when buying a BHL.
- Scaling the job: The most important factor that comes into play is the job for which the BHL is required. The scale of the job is usually synonymous with the size of the company itself. Say when one has to deal with road construction, machines have to be either rented or brought depending on the duration and size of the project. For smaller companies looking to use a BHL on only a few occasions through the job, renting is usually a better choice. However if one is looking to scale up and has a budget for the same, buying one can also be a profitable investment. For owners, it makes sense to start renting the backhoe, if it is not in use for a minimum of 12-14 hours a day barring which, one will be spending more than what they earn.
- Budget Constraints: Money, plays a vital role when deciding on buying or renting a BHL. Renting is a smarter option for those with tighter budgets and buying a better option if one has the capital to invest for the longer run. Then there are those, who buy BHL’s to rent it out to occasional users. For such people it’s best to rent BHL’s of various brands, have a firsthand experience of the equipment then decide the brand make and model that they want to spend their moolah on. The same goes for larger companies investing in their own fleets. The cost of buying and renting equipment should be calculated and compared from a long term prospective to get the most out of the machine and money being used.
- Check list: Knowledge is key when it comes to renting or buying a BHL worth the money being spent. The backend of the loader does 70% of the work while the front end takes care of the remaining 30% work. It’s important that the specs of the machine, the comfort of the operator, the functions, console, joystick, maneuverability and the integrity of various parts be taken into account before deciding on the exact machine that one chooses to hire or buy. In either of the cases one should ensure that adequate customer support is available for both the equipment and its operation.
- Renting v/s Buying: When one looks at it from a short term point of view and occasion use, renting is the way to go while long term prospective warrants the need for owning a BHL. However in the whole conversation, overhead costs like insurance, storage, maintenance, etc are pushed back in the background, which again is a huge mistake. These so called smaller expenses add up to big losses in the longer run and should be considered as a major variable when taking the call. Renting also gives one easy access to various additional attachments without having to incur costs of buying it. Renting gives one the option of passing on the overhead costs to the agency, provided a proper contract is in place. In absence of an appropriate contract the party renting the equipment owns the bigger chunk of the risk. Renting gives you the option of having access to the latest equipment while buying runs with the risk of obsolesce. Renting leaves one open to the risk of having to use unmaintained equipment thereby increasing costs.
Whether buying or renting a BHL, informed calls are what will eventually decide on the profit margins!