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To Rent or Not to Rent. Tier 4 is the question.

Duluth Mechanic WorkingMaking the right decision for your business doesn't always come easy. With ample research and crunching numbers, you often need to determine which option will save you time and money. So, when it comes to construction equipment with Tier 4 Engines, is it better to rent or own?

Tier 4 engines are in a variety of construction equipment. As of 2012, all new machines between 175 and 750 horsepower have to be Tier 4-compliant. These machines have engines with advanced emission control and are the latest technology. Whether you are the distributor, rental agency, or contractor, there are many questions you should first ask yourself when determining if you should rent or own this new technology. What type of project is it? How long will I need the equipment? What is the cost of fuel and maintenance? Will I need to utilize this equipment for later use? What is the resale value if I decide to purchase?


The trend, over the past several years has increasingly leaned towards renting construction equipment especially during the recent recession. Renting equipment can be beneficial over purchasing because you are eliminating many financial risks associated with ownership, especially when it is important to rent the latest technology, such as Tier 4-compliant machines. And when renting equipment from a rental company, costs are usually lower because the company purchases equipment in bulk, allowing consumers to rent at a lower rate. This is beneficial when a project requires specific equipment because rental companies have easy access to what you need. You can also rent in advance so you are guaranteed the equipment at the time of your project. If you are using the equipment less than 60 percent of the time, renting is your best option.


How do you calculate whether or not owning is the right decision for you? A simple formula can be applied when considering the purchase of construction equipment; the cost of the equipment over the number of years you will keep it. Essentially, you are paying for every hour you have the equipment in your possession, whether or not the equipment is in use. Also, the new Tier 4 engines are more expensive due to the new technology engine design. However, the new Tier 4 engines use less fuel and take Diesel, which overall costs less. Buying is a great decision if you are going to be using the equipment up to 60-65 percent of all projects.


When you’re dealing with construction projects, many factors play a role in purchasing and renting decisions. The best bet is to sit down with your finance department and weigh out the options. Over the last several years, trends have been shifting towards rental due to high fuel and maintenance costs. When renting equipment with Tier 4 engines, you are able to access stock that may be used infrequently, and keep them for as long as a project needs them, without tying up capital. Renting any construction equipment is also an environmentally better option than owning your own equipment because you are able to rent new technology with lower emissions. Overall, buying is a good decision if you are going to be using the equipment up to 60-65 percent of all projects, but if your equipment is going to sit on a lot, and you will be using it less than 60% of the time, you’re better off renting equipment as needed.

For more information on renting Tier 4 equipment, contact Neff Rental. Or call us at 888-709-6333. We are ready to assist you with your equipment needs.


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