Equipment

Should you rent it or buy it?

Answer 3 quick questions to see the real cost per hour both ways, and how many hours a year it takes before buying pays off.

Your machine

What does it cost to buy?$ What does it cost to rent for a day?$Renting by the week? Use the weekly rate divided by 5. How many hours a year would you use it?hrs

Fine-tune (optional)

We filled these with common numbers. Change any you know.

Years you'd keep ityrs What you'd sell it for at the end, as a % of the price% Interest rate on the money%Your loan rate. Paying cash, or a 0% dealer deal? Use your credit line's rate. Cash locked in a machine can't pay other bills. Repairs and upkeep a year, as a % of the price% Insurance a year, as a % of the price% Hours you get out of a rental dayhrs Delivery and pickup, per rental$If you'd haul your own machine anyway, count only the extra. Rentals a year

Financing (only changes your monthly payment)

Down payment, as a % of the price%Paying cash? Put 100. Loan lengthyrs

Answer the questions above to see whether renting or buying costs you less.

Example: an $85,000 mini excavator

Used 600 hours a year and kept 5 years, then sold for 45% of its price. It rents for $400 a day with a $250 delivery fee, 12 rentals a year.

How we got this

	Own	Rent
Wear and tearPrice minus what you sell it for
Interest on the money tied up
Repairs, upkeep and insurance
Rental days
Delivery and pickup
Total

Book a call about this equipment decision

Owning cost spreads the price, the resale value and interest on the money tied up in the machine into one even yearly cost, so it can be compared with renting. It's the same whether you finance or pay cash. Upkeep and rentals per year are held steady as hours change.

Before taxes. Rent and the costs of owning are both business write-offs, but buying can let you take the write-off sooner. Check with your CPA, especially on a close call. Fuel is assumed to cost the same either way, so it's left out. Estimates for planning only, not tax or financial advice.

Air Industries LLC