The popularity of equipment rental businesses is rising day by day and truth to be told, there are plenty of reasons behind it. A few but important reasons among them are;
- The increasing cost of equipment purchase.
- Current economic uncertainty around the globe.
- Rapid technology up-gradation.
- Lack of capital.
- Volatile infrastructure and construction growth.
- Limited space availability.
- Cost breakdowns, etc.
Due to these reasons, many organizations and businesses today are more leaning towards construction and scientific equipment rental services or adapting to the ‘pay-as-use’ structure for optimum business productivity. And this has been proved favourable for equipment rental businesses because more investment and increased use of rental services have resulted in an upward growth for the industry. Currently, the ECE (Earthmoving and Construction Equipment) rental market comprises nearly 7-8% of the entire ECE market segment. However, this statistic will tend to increase in the near future with a 30% yearly growth rate, which is quite promising.
Below we have articulated some of the advantages that equipment rental businesses can provide which can further improve the growth rate or equipment rental services.
i) It helps to avoid the initial purchasing cost: Buying a piece of new equipment is always costly and requires a good amount of financial investment which can negatively impact an organization’s budget allocation. In addition, buying construction and scientific equipment are a long-term investment. However, renting equipment can help to avoid these upfront charges and a company can better allocate its financial resources for other important activities.
ii) It helps to avoid depreciation cost: The value of each equipment you purchase will depreciate with time. Thus, the more time passes, it becomes more difficult to recover the purchasing cost of the equipment, leaving a burden on the organization. Moreover, the way technology is advancing in today’s world, it is highly possible that your equipment will be obsolete within a few years. So, it is always a better decision to rent equipment as per the necessity to avoid these problems.
iii) Eliminates transportation cost: Renting equipment removes transportation cost. For instance, if your worksite is far from the location of the equipment, then you need to carry the equipment to the worksite, which is both costly and time-consuming. It also impacts a project’s proficiency and productivity. However, when you choose to rent equipment, the rental company will take the delivery burden without letting you handle any complicacy.
iv) Less repair and maintenance cost: Every equipment you buy needs to be properly maintained and repaired if necessary. And if you are unlucky, the repair and maintenance cost for a piece of equipment can significantly affect the total budget of the company. On the contrary, when you rent equipment, the rental company takes all these burdens. So, renting equipment always saves maintenance and repair expenditures.
v) Fast completion of short-term projects: Often short-term projects require specialized equipment which may not be used later. In those cases, taking equipment on rent is a smart move to finish the project on time without creating any future concerns.