ELLIOTT’S GUIDE TO DETERMINING IF YOU SHOULD BUY, LEASE, OR RENT.

Deciding which financing option makes the most sense for your business will depend on a number of factors particular to your own application.

Determining whether to buy, lease or rent an aerial work platform or crane can be an intimidating decision. Not only must you choose the right piece of equipment, but then you must find the best way to finance it. This can seem daunting early on in the process. But given the many finaning options available, it is easier than ever to lift loads and position people.

What matters most when deciding whether to rent, lease or buy is a strong understanding of those circumstances, a firm grasp of what your equipment will be used for, and a perspective that takes into account the entire lifecycle of the machinery you’re considering.

Ownership

Low interest rates, accelerated tax depreciation and an increasing array of financing options make buying an aerial work platform or crane a decision worthy of some serious consideration. The purchasing of such equipment should be considered in the long-term, with particular attention paid to a product’s durability and ability to retain value. Buyers should consider the total cost of ownership, not only the upfront price. Deciding on a particular piece of equipment should also only happen after carefully considering technical needs such as working height, lifting capacity, side reach and productivity options.

Aside from purchasing a piece of equipment not suited to your organization’s current and future needs, there’s perhaps no greater mistake than trying to cut costs by underspecing the machine. Choosing equipment that is designed to ensure longterm reliability will help to ensure that the equipment retains its resale value, one of the most significant perks of ownership. It is important to consider the entire lifecycle of a piece of equipment, rather than its price tag alone.

Customization, where available, is another strong incentive for owning this type of equipment. It allows owners to customize the perfect truck for their application rather than relying on an offthe-shelf solution. Working with an experienced manufacturer that caters to unique needs is an ideal way to make sure that an aerial work platform or crane is the most versatile tool in your toolbox. Working with and relying on an experienced engineering staff can help to ensure that you’re imagining all of the possible applications and potential limitations of your equipment. Unlike renting, owning equipment provides for signage and branding options that allow aerial work platforms and cranes to act as marketing materials for their owners. In fact, owning and maintaining versatile, customized equipment illustrates financial stability of the owner as well as the quality of work they may expect. As with a cab company that invests in only the best-in-class luxury sedans, there’s a reputation value involved in owning impeccable service vehicles that says a lot about its owner.

Renting

Renting an aerial work platform or crane is an often attractive proposition. If the work that necessitates the equipment is infrequent, for instance, or if it’s uncertain how frequently such work will come along, then renting can be a logical approach. For companies occasionally lifting loads or positioning personnel, access to the right piece of equipment is still essential, but doing so on rare occasions may not be enough to justify buying the equipment outright.

Similarly, if the work frequently makes different demands of the equipment, such as personnel positioning one week and heavy load lifting the next, renting the right equipment each time can save time, and therefore money, for crews. Owners might not want a highly specialized piece of equipment in all cases. This hurdle can be overcome, though, by working with an equipment manufacturer able to find a custom solution capable of various applications invarious environments.

If the work that necessitates the equipment is infrequent, for instance, or if it’s uncertain how frequently such work will come along, then renting can be a logical approach.

When renting occurs too frequently—when the fees from doing so approach what the operation may spend on a monthly payment as determined by a financing plan, for instance—then it can become a case of lost equity. The argument is similar to what a potential home-buyer must consider when deciding whether to purchase or rent. Payments will have to be made in either case, but buying involves the accrual of equity which can likely be recouped later, whereas the other (renting) does not. Hence, frequency is a very important factor that should be considered when renting.

Renting pros:

• Less overhead cost than with buying or leasing
• Eliminates maintenance and other cost-of-ownership expenses
• Allows for a high-degree of flexibility in the equipment used for lifting and aerial work
• More conveniently positions people or lifts loads, leading to return on investment by saving time

Leasing

It’s fairly unlikely for owners to pay cash upfront for a business investment as significant as an aerial work platform or crane. Instead, various financing options are available to allow businesses to conserve capital while investing in the growth of their business. Since well-built service trucks tend to have very long service lives, financing allows for the cost of the equipment to be spread out over a long period of time. Some of these alternative payment options can be powerful incentives for purchasing equipment in their own right. Section 179 of the IRS tax code, for instance, covers tax  deductions for machinery and equipment acquired for business use and also covers lease agreements.

Various financing options are available to allow businesses to conserve capital while investing in the growth of their business

Alternative options:

• Rental-purchase option agreement
• A fair market value lease
• A terminal rental agreement clause lease