Buy or Rent: What’s Best for Your Construction Fleet?

Continued investment in infrastructure and increased activities in the commercial, industrial and residential sectors are fueling demand for construction equipment and services. To fulfill this demand, fleets will outsource or rent more equipment, software and expertise to supplement and help maintain their owned equipment. This is good news for the global construction equipment rental market, which was valued at $34.24 billion in 2014 and is anticipated to reach $84.6 billion by 2022.

While most fleets will use a combination of owned and rented equipment, there are several factors to consider when deciding which is most economical for a fleet’s individual needs. The two most important aspects to evaluate include projected asset utilization and the current state of the equipment.

Asset Utilization

Before deciding whether to rent or buy a piece of equipment, the first question any fleet manager should ask himself or herself is, “How much will I use this equipment?” While it’s not an exact science, fleets should consider how many fixed and projected contracts they have in the pipeline, how often they win new business, and past utilization for existing equipment.

GPS fleet management solutions can offer insights into the latter, as they provide detailed reports on how many hours per day each piece of equipment is in service so managers can determine if any single asset is under- or over-utilized. Not only does this help construction asset managers make informed decisions on whether to buy or rent additional equipment, it also ensures more even asset allocation across owned equipment.

If equipment is consistently under-utilized, fleets should consider renting equipment for those periods of high demand. This way they don’t take on the lifetime costs of maintaining assets that will be left unused for extended periods of time. Equipment that sits idle means less ROI, and GPS tracking solutions can help pinpoint exactly how much of that investment is lost.

The State of Equipment

It’s also important to consider how modern the equipment is. Older, outdated equipment burns fuel inefficiently, requires more maintenance and drains unnecessary resources. With remote access devices, more efficient engines and automatic controls, fleets can now take advantage of new equipment that not only simplifies the day-to-day responsibilities of operators, but also positively affects the bottom line. If a fleet can’t afford to update or buy new equipment on a regular basis, it may be best to rent it.

GPS fleet management solutions track how often a single piece of equipment is in need of repair and how efficiently that same asset burns fuel. Mangers can then compare this data to other pieces of equipment in their fleet to determine which assets are draining unnecessary resources and may need to be retired and/or replaced. For those assets they decide to keep, managers can create a schedule of preventative maintenance so one minor issue does not cause greater damage – or create a problem they cannot fix. Armed with the right information, fleet managers can feel confident in their decisions to buy or rent equipment that is more modern.