The Pros and Cons of Renting, Buying, or Using Existing Heavy Civil Equipment

• 23 February 2023

When it comes to heavy civil construction, having the right equipment is essential for any successful project. Whether you are running a single construction site or you are spread out across multiple sites, having the right equipment can make all the difference. The question is, should you rent, buy or use existing equipment on your heavy civil construction site? Each option has its pros and cons, and it’s important to consider all of the factors before deciding which one is best for your project. Renting or buying can be expensive, and it doesn’t guarantee that you get the best and most up to date equipment. On the other hand, using your existing equipment can be a cost-effective solution, but only in the sense that you are not spending more money. In the end, it all comes down to your project timelines, available crews, and a cost-to-benefit analysis.

Overview of renting, buying, or using existing equipment

For heavy civil construction contractors, renting can be a cost-effective option, since it eliminates the need to purchase new machines. However, it can be risky to use rented equipment, as some companies don’t offer a warranty. When you rent, you may also lack the ability to service the equipment, since you didn’t have control over its previous use or you are also short on available mechanics (adding new equipment could mean the need for more mechanics). But renting equipment also has potential benefits, such as flexibility and access to new equipment. If you’re in a rush to get a job done, renting can be a great option, since you can get whatever equipment you need without having to wait for deliveries to arrive. The benefits of renting other types of equipment may be limited, depending on your specific project needs.

We reviewed the warranty sections on a popular heavy civil equipment rental company and another who sells used equipment. Here’s what we found:

1. AS IS, WITH ALL or ANY FAULTS

2. if the repair or replacement is due to abuse, misuse or neglect, [you] will be responsible for the cost of repair or replacement
   1. But there’s no definition of neglect. Imagine running a rock ripper and the attachment breaks. Are you expected to do a x-ray first to ensure it was in good shape? Warranty details are very difficult to understand and aren’t easily available. In fact, when was the last time you read the complete warranty details? It’s the difficulty in finding the details before you buy or rent and then having the time and experience to read the details that makes warranties a frustrating part of talking on extra equipment.

Before you rent or buy new equipment

Let’s discuss the elephant in the room - how well do you know your company’s efficiency level? If you answer, “we’ve been flat out the whole year so we must be at 100%,” then consider the following to understand the optimal level of work for your crew(s) and equipment.

1. Are your gravel trucks driving the best routes from point A to point B. Can you see a live view of them as they are driving? Can you see if they had to wait an extra 40 minutes at a gravel pit?
2. How many phone calls, text messages, and emails does it take to move 8 people and their machines from site A to site B? Is it more than even 1?
3. When a machine breaks down, just like equipment moves, how many phone calls happen? Ideally, the number is zero.
4. Can you see a 6-month road map of what equipment needs to be where to keep your projects on schedule?
5. Does construction site management (for you site superintendent) take more than two hours a day?
6. Has site safety ever been an issue?

There are literally 100s of examples of why you may have been “flat out” for the past year, when in fact, you may have only been running at 60% capacity. Imagine you could have taken on another job without the need for any extra equipment. The solution to consider, before buying or renting new equipment is to look at operational efficiency. Using construction project management software such as Vizzn can reduce dispatching errors by 95%, reduce fueling errors by 90%, and increase your bottom line by 20%.

Pros of renting equipment

• Flexibility - Renting equipment gives you more flexibility in your work schedule, so you can work around your client’s schedule. If you have a large earth moving job, renting can also provide you with more flexibility when it comes to scheduling your equipment.
• Less Risk - Since renting typically costs less than buying, it can be a less risky option for contractors, who aren’t committing to a specific budget. If the equipment doesn’t work out, you can easily switch to another company’s equipment, which may be easier than trying to sell a used machine.
• Quick Equipment Arrival - Renting equipment also gives you quick access to it, since delivery times are often shorter than with purchasing new equipment. As a result, you may be able to start work sooner.

Cons of renting equipment

• No Warranty - When you rent equipment, you typically don’t have any warranty protection, which can put you at risk if your rented equipment doesn’t work (warranties are an add-on and usually don’t come with the rental or, the warranty does come with the rental but you can get blamed if something breaks). If the company that you’re renting from doesn’t offer a warranty, you may want to consider another option.
• Access to New Equipment May Be Limited - When you rent equipment, you may have limited access to new equipment, since it might be outdated and not suitable for your work. This may limit your options and prevent you from finding suitable equipment for your specific project needs. Find out about machine hours: it may be better to rent a nine-year-old excavator with only 600 hours of use than an equivalent three-year-old excavator with 1200 hours and those 1200 hours were in a mountainous region.
• No Control Over Maintenance - When you rent equipment, you don’t have any control over its maintenance, since it’s handled by the company. This can affect your ability to keep the equipment in good condition, so you may have to use older, worn-out machines.
• Lack of Options - If there are no used pieces of equipment available when you need them, you may have to wait, which can add to your project timeline. If you’re in a rush to get a job done, renting can be a great option, but for longer-term projects, renting may not be the best choice.

Pros of buying equipment

• Less Risk - Pre-owned equipment may be more risky than buying new machines, since you aren’t guaranteed that the used tool is in good working condition. For some projects, buying may be a riskier option than renting.
• Brand Recognition - If you buy pre-owned equipment, you have the option of buying from a well-known brand, which may be an advantage if you want to keep your equipment consistent with other company machines.
• Better Options Available - When you buy new equipment, it may be difficult to find older versions of the same type of tool. However, when you buy used equipment, you may have access to older items that aren’t available when you try to buy new.

Cons of buying equipment

• More Risk - Pre-owned equipment may be more risky than renting, because you aren’t guaranteed that it’s in good working condition. For some projects, buying may be a riskier option than renting. If you buy, and an expected project falls through, then you may be stuck with an unneeded machine.
• Fuel Costs - When you buy new equipment, you may end up paying for fuel for projects that last longer than expected, which can add to your project costs.
• Poor Fit Between Tools and Jobs - When you buy new equipment, it may not fit well with the rest of your company’s fleet, which can be an inconvenience when it comes to managing equipment.
• No Access to Older Versions of Parts - When you buy new equipment, you may not be able to use some of the older parts you have in your inventory.

Pros and Cons of Using Existing Equipment

The final option is to do nothing, to make everything work with the equipment you have on hand. While access to capital may make this a necessity for some heavy civil construction companies, it’s not ideal.

To make a “do nothing” strategy work, negotiations with stakeholders may be necessary. But, considering the role of earthworks or heavy civil underground construction in the big picture, the developer is not likely to give you an extra month to finish a project just because you can't buy or rent the necessary equipment. Not taking on new equipment may mean the need to subcontract the work just to stay on schedule, but that’s going to eat at your profits.

Final Words

When it comes to construction, having the right equipment is essential. Whether you’re working on a small renovation job or a large-scale construction project, having the right tools and equipment can make all the difference. When you rent, buy or use existing equipment, you’ll have to consider all of the factors, including the pros and cons of each option.