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Companies within all industries need every competitive edge they can get. As everyone pours over the balance sheets and all aspects of the business to find advantages, it can literally pay to explore and compare the costs of renting or leasing equipment against the expenses of buying and owning it. 2   it can literally pay

Loaders, excavators, skid steers, trucks, lifts, generators, uninterruptible power supplies and other equipment are essential to any business. But like any other department or resource, they can and must be streamlined for maximum efficiency and versatility. A cost-benefit analysis can provide valuable data to help you make an informed decision about equipment rental versus ownership.

Regardless of how businesses and companies differ in their size, purposes and structure, few that use any size of equipment can afford to have it be ill- matched for the task or sit idle and unused. Procurement, finance, production and administration departments all might have input on which option to use, since all have important perspectives to present. Maybe you head all those departments for your company or maybe there are different people in charge of each one, but you’re likely to pull statistics from all for a good analysis.

Holt of California offers a comprehensive inventory of equipment for purchase and rent, so we can help you decide which option best suits your business needs, whether that be rental, ownership or a mix of both. As a strong Cat™ dealer serving many industries from multiple locations, we sell new and used equipment and have Cat construction equipment for rent. Along with the excellence of Cat, Holt of California also carries many other allied brands.

Browse Equipment for Rent

Take Time for an Examination

It helps to first take a step back and analyze the cost-benefit situation as applicable to your business. An educated, logical decision will result as you consider all the factors:

  • Estimated rental payments for the period of use and machines needed
  • Approximate cost of a new machine
  • Transportation and storage expenses
  • Frequency of need for equipment
  • Projected life span of new machine
  • Estimated cost of maintenance and service over its life
  • Rough amount of labor saved with either option
  • Financing options and available capital
  • Need for special technology or skills with projects or equipment
  • Availability of desired new-purchase equipment
  • Possible, multiple uses for machines both rented or bought
  • Internal capability to test, maintain and service machines.

A cost-benefit analysis will result in a much stronger sense of which option fits best, as well as where and why. The most often recommended numeric benchmark for when it’s time to cross over from rental to purchase is when the equipment is needed and used at least 60-70 percent of the time. Generally speaking, if you’re thinking about need for the equipment in terms of years, that can be an indicator that you’re moving toward purchase, unless of course you’ll have little or no use for the machine after the current project or set of jobs.3   benchmark

Your examination of equipment needs will naturally reveal data that are useful to decision making, things such as usage duration, hours wasted or saved, profit or loss potential and capital or financing available now or in the future. Businesses can use some type of construction-management software to track vital job statistics and provide useful information such as trends or previously unknown needs.

Beyond the hard numbers sit a good deal of other considerations, such as safety, quality, efficiency, compliance, growth, risk, morale, employee retention and other factors that affect business but don’t have a hard number attached to them. Individual companies will each value the softer factors differently, but they are all worth considering.

Who Rents and Why?

Many industries can benefit from renting equipment rather than buying it:

  • Agriculture
  • Automotive
  • Construction
  • Earth moving
  • Government
  • Landscape
  • Logging
  • Military/Defense
  • Mining
  • Plumbing
  • Recycling
  • Retail
  • Trucking
  • Waste

Companies and people rent equipment for a number of reasons:

  1. Saves money in many cases
  2. Caters to short-term equipment need
  3. Provides specialty performance
  4. Satisfies temporary production increases
  5. Fills in when regular machines need maintenance or fail
  6. Helps meet deadline crunches
  7. Expands machine inventory
  8. Increases overall capability when and where needed
  9. Eliminates responsibility of testing, maintenance, service
  10. Makes the project schedule easier to manage with on-demand resources.

The rental of equipment can enable a bigger company to augment its fleet when and where needed, while it can aid a small- or medium-sized company to propose work that requires specialty equipment or machines to fulfill the requirements. The range of capabilities among equipment of all sizes can help businesses serve niche markets and win new and different kinds of projects.

4   Rental options can fill in during an outage or emergencyRental options can fill in during an outage or emergency and provide a flexibility that extends to logistics and finance, at a minimum. In addition, competition among rental providers can work to the consumer’s advantage with prices, specials and service. Equipment rental appeals to many industries because of its many benefits and advantages.

Benefits of Renting Equipment

Companies experience numerous advantages from choosing construction equipment rentals.

1. Forgo the Upfront Investment

Equipment, especially large equipment such as an excavator, tracked dozer or a telehandler, is an expensive capital cost. Your company must budget for equipment acquisition expenses. It often takes a “good year” (or a couple) to have the liquid cash to afford to purchase a piece of equipment outright.

When you purchase a piece of capital equipment, your money is tied up in it until you sell it, and if you used it well and kept it long, sale offers might come in lower than you’d like. Renting equipment allows you to access reliable equipment with a smaller initial investment. With less money tied up in capital equipment, you business will have more funds available to pursue opportunities and maintain other important parts of the business. 

2. Decrease Long-Run Expense

Any piece of heavy machinery requires consistent maintenance for fault-free operation. In many cases, companies have maintenance teams or equipment consultants devoted to upkeep. Mechanics and service technicians must check fluids and hydraulics, replace worn parts, repair leaking valves, update technology — the list goes on. Keeping up with equipment maintenance requires coordination and ongoing expenses.

Beyond maintenance, your company will also invest capital in usage scheduling and transportation. As constant as the ongoing expenses may be, they are often unpredictable. You can more easily gauge and control rental fees than the costs of private ownership.  

3. Avoid Storage, Transport Costs

5   avoid storage and transport costs When you purchase a piece of equipment, you'll have to determine where to keep it and how to move it between jobs. Your large, heavy construction machinery will take up space at your headquarters, and you'll need a separate vehicle for transportation. Storage and transportation solutions are investments themselves, which is why it can be advantageous to rent equipment instead.

Your rental company will store the machinery on their property, deliver it to your job site and pick it up when you're finished. You'll save space, money and time as a result, helping you run a more efficient business. Renting can help you respond faster to varied needs in different locations. It all happens fast, allowing you to streamline operations, shorten the workday and save money. Leaving the logistics to the rental company will free you to focus on your true business objectives.

4. Save at Tax Time

Renting and purchasing equipment impact your tax returns in different ways. When you purchase machinery, you will write off its depreciation each year. Renting creates an opportunity for a larger write-off. You can deduct each rental fee you pay from your business's income — a more consistent write-off than what is available for equipment you purchase outright.

5. Maintain Strong Borrowing Power

In the same way that the Internal Revenue Service (IRS) views at rented equipment one way and owned equipment another way, so do banks. They do not see rental expenses as a liability on the balance sheet, so the option to rent equipment maintains stronger borrowing power for a business. Thinking in terms of assets and liabilities, capital-equipment debt or an aging machine could weaken a business’ overall financial picture depending on the numbers and circumstances involved.

6. Achieve Worry-Free compliance

Especially in California where many would argue the emissions standards are the most stringent in the nation, compliance with air-quality standards is a must and navigating the regulations can be a complex and confounding experience. No companies can afford the financial ding or loss of reputation associated with violating the standards since that can be troublesome and expensive, if not damaging.

6   achieve worry free complianceAir-quality gatekeepers in the Golden State classify the emissions of off-road equipment into three tiers, according to their horsepower and other factors of their overall consumption. As the historic push-pull of progress and conservation continues, the laws and regulations continue to change, and it’s hard to stay abreast of what the differences are and how they apply to your business.

Choosing Cat construction equipment rental can relieve you of the chore of tracking the sporadic regulations changes and provides automatic, consistent compliance. The investment is safer from a compliance perspective because your commitment to the machinery is less binding.

Consider this scenario - you purchased a brand new machine at full price, but a new regulation ups the standard for emissions. If the machine you purchased is not compliant or too expensive to run within required parameters, your investment could go to waste. The machine will get little to no use and have less resale value within the state. By renting, you can access compliant machinery with greater flexibility. 

7. Reduce Waiting and its Associated Losses

Most owners and managers would agree that lost time at the job site eats into profit and deadline adherence. It’s never good to leave workers waiting for a piece of equipment to arrive or for a machine to sit idle because it stalled. Renting connects you with reliable equipment when you need it.

When you have a rental agreement, it’s on-demand delivery and pickup for the exact time frame you need. If you need a backhoe with a precision arm for a week, you can get it. If you need an earthmover for a month, you can get that. It can arrive when you start and leave when you finish. In addition, since professionals maintain and service the equipment, it is less likely to fail and waste job hours while an alternative is found and transported.

8. Track New Opportunities

7   business opportunityEquipment rental can do just as much to increase business opportunities as it does to reduce operating expenses. Once you factor in the possibility of renting a piece of specialty equipment, it opens the door to new possibilities through that capability. Maybe the job entails digging or grading or a certain kind of precision dirt work that you could capture if you had the right machine, and the same principle translates universally across industries. Whether you’re chasing road-construction projects or trying to harvest crops more efficiently, there are rental options that can cater to nearly any need.

9. Sharpen Your Competitive Edge

Many small- and mid-sized businesses bemoan the fact that it’s hard to compete against the big companies. Larger companies often have bigger budgets that grant them accesss to the nicest, newest, best machines. Your smaller business gets the job done with what you have. 

Equipment rental can shift that age-old dynamic so that small competitors can procure the same kinds and quality of equipment for jobs, if that’s what will win the work. If a client asks what machines you will use or about a key piece of equipment, you can rest assured knowing that you have access to a diverse, efficient and compliant fleet of machines, just like the bigger companies.

10. Avoid Long-term Commitment

Investing in capital equipment brings a host of responsibilities and worries that keep some business owners up at night. Most new or used machines cost a lot of upfront money, so you'll spend time searching for the right deal. There are warranties to track, service-contract decisions to make, financing options to discern along with interest rates and countless other considerations.

After you commit to a machine, you'll have to keep it busy and productive to recoup your investment. Managing your equipment is a job of its own. You'll be in for years of maintenance, service, eventual sale or disposal, upgrades and adherence to regulation for all the years that you plan to own it.

For business owners who have any apprehension about the longer-term obligations, renting equipment can be a great solution. You can rent a piece of equipment, use it while you need it and return it after the fact, leaving all ownership responsibilities to the rental company.

11. Eliminate Coordination Headaches

8   alleviate concernWhen you purchase equipment, it's up to you to maintain it, plan logistics and train employees to use it. Renting relieves you of those responsibilities, saving time and energy. Everyone probably values the benefits of stress reduction and time gain differently, but that is one benefit many business owners or fleet managers would agree is created through renting equipment rather than buying it.

12. Gain Flexible Options

Flexibility is valuable in today’s business market where companies navigate a major recession, razor-thin profit margins, increasing regulations, market volatility, growing demand for specialized capabilities and the general quest to deliver quality service, great products and efficiency.

Renting equipment enables companies to respond to specialty niches, financial fluctuations and the ebbs and flows of demand. It’s an adaptable option, especially when explored through a cooperative relationship with a trusted equipment partner. The more functions a machine can perform, whether rented or bought, the more justified its expense will be. For example, one versatile body with interchangeable accessories that might dig, reach and lift would sooner be a justified expense than would a machine that does only one of those tasks.

13. Get the Latest and Greatest

Equipment that features up-to-date technology can benefit a business greatly by bringing efficiency and specialization to the project. A piece of rental equipment featuring the latest advancements can help your business work fast and accomplish more specialized jobs. 9   enjoy latest technology

Especially with Cat machines, you enjoy raw power and strength as well as precise performance for even the most delicate operations. The intuitive systems in today’s models deliver metrics and other business data that aid the actual work, such as digging guides and easy-change attachments. Many businesses tend to make do with whatever machines are nearby and/or owned by the company, but targeted equipment selection according to technology can potentially enable you to do many existing jobs with fewer pieces of machinery and in less time.

In the same way quality rental equipment can help you better compete in the market, renting also helps you avoid any risk of your machines becoming unusable or obsolete. A good rental partner continuously rotates machines off the fleet in order to have the most updated models and technology available so that you and your jobs benefit from the specialized capabilities.

14. See and Experience a Preview

Maybe your burgeoning business looks to grow and you’d like to see how certain models of equipment, attachments and accessories work. Renting allows you to try before you buy, helping you feel more confident in your purchase.

By renting, you will gain a better feel for how the equipment works, the time it takes, its usability and other things that might affect a purchase decision. For a hypothetical example, if you wanted to dig diamond-shaped ditches, you could try a few recommended machines and attachments before you purchase one or as you work your way into enough business to buy one.

15. Add Convenience, Hours

Managing even one piece of heavy equipment represents a lot of responsibility, much less a small or large fleet of machines. When you rent, things such as fluid checks, service, maintenance, hours count,  schedules, testing, parts and depreciation becomes someone else’s responsibility. Not only is it easier to let the professionals at a rental company handle some of those logistics for you, but also it frees up your valuable time and saves money in many cases.

Progress With a Professional Partner

As any business owner or manager might surmise, the key to successful rental is a wide and varied selection of machines, as well as the professionalism and experience of the partner they pick. Holt of California understands the demands placed upon industry. Caterpillar™ itself works to develop innovative machines, technology and techniques that help business keep moving forward.

From loaders, backhoes and excavators to power systems, lift trucks and attachment variety, we can deliver superior products, service and selection. While Holt of California is a certified Cat dealer for 16 California counties, we also carry a number of allied brands for a broader selection. We realize the importance of adherence to emissions standards and stay on top of the latest developments and changes so that we can be a resource to our customers about how to remain compliant and avoid trouble.

We are here to help with anything and everything we can, including rental contracts, agreements and options that can help get what you need to where you need it and when. Besides equipment rental, Holt of California fulfills a full range of needs across many industries with a comprehensive offering of new and used equipment for purchase:

  • Dozers, tracked and wheeled
  • Forestry machines
  • Graders
  • Harvesters
  • Lift trucks/forklifts
  • Loaders, tracked and wheeled
  • Planers
  • Power systems
  • Spreaders
  • Tractors
  • Trucks

Along with the basic machines come the attachments, accessories and features that can make your working life easier with everything from raw power to collected data. When it comes to construction equipment for rent in California, you certainly want to work with a partner you feel is dedicated and conscientious so that you realize advantages, satisfaction and ultimately, good business.

Browse Construction Rental Equipment

The quality of partner you pick will make a difference in how much benefit you’re able to achieve through equipment rental versus purchase of it, but Holt of California offers the reputation for integrity and expertise that clients seek along with other characteristics like product inventory, a positive business history and courteous service.

10   contact

Please don’t hesitate to contact us so we can discuss your needs and how Holt of California can help your business progress into the future. We would be happy to work up a quote and share more information about how to rent Cat equipment (or allied brands) and all the associated options. 

Contact Holt of California