One of the most exciting parts of being a heavy equipment operator is when you get to buy your own machinery. The idea of going and picking out the exact piece that you want with all the features that you need can make all your hard work feel worth it. One question that may come to mind though is, should you lease, or buy this new equipment. The answer is not exactly cut and dry, and will depend on your situation. Here is some advice one whether you should lease or buy your new machinery.
First, consider your budget. How much can you afford to spend on a new piece of equipment, and also how much can you afford to spend on maintenance. Owning a piece of machinery means that not only are you paying to buy it, you’re paying to keep it running for the entire time you own it, which will last beyond your loan period.
Research your options; when you buy a vehicle, you may be required to make a down payment as part of the loan deal. Buying equipment will also sometimes have extra fees that may not have been accounted for, so ask your salesperson for a breakdown of everything involved. Ask also for a comparison between buying and leasing to see which makes more sense to your business model.
Sitting down with your accountant and running the numbers of both options is always a great idea. Having an expert opinion on finances to work with your expert opinion on equipment helps to ensure the right decision is being made.
At the end of the day, understanding that there is no hard and fast rule about leasing vs buying is important. Some equipment under wear and tear may only last 2-3 years, meaning that leasing would be your best bet. That being said, if a piece of equipment with proper maintenance will last 10-12 years, you may want to consider buying it.
Do you have any questions about heavy equipment, or learning how to operate it? Let us know! We’d love to help!