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10/27/2008 12:00:00 AM
Compiled by FacilitiesNet Staff
From spot-cooling equipment and personnel lifts to specialized grounds
equipment and generators, maintenance and engineering departments often
rely on rental equipment to meet unplanned or infrequent needs. But
what happens when rental needs become more frequent and require more
The challenge for managers is to decide the right time to stop
renting and purchase a particular piece of equipment. By carefully
considering the key components of both options, managers will be more
successful in building a cost-effective case that supports their
decision on renting vs. buying equipment.
When the time comes to plan major projects or repairs or to perform
cyclical work, such as cleaning windows or high-voltage insulators, the
answers to two questions figure prominently in the renting vs. buying decision: How frequently will crews need this particular equipment capability? How versatile must the equipment be?
The second question relates to the first. High-frequency use, of
course, is related to payback. If crews need the equipment regularly
enough over its estimated useful life to pay back the cost of not
owning it, the case to purchase probably is strong. If renting the
piece of equipment will cost as much or more than owning it, then it
makes sense to buy it, get the benefit and save the incremental cost.
Since the renting vs. buying equipment decision involves predictions of
future events, it is important to plan carefully and thoroughly.
Important information also includes past use patterns and an estimate
of future use.
Versatility significantly can affect the first issue — frequency —
because if managers can use the equipment on various types of jobs,
that will increase the frequency of use and justify the purchase of the
If either frequency of use or versatility is low, then the case for
rent generally will be stronger. An exception is equipment that is not
used often but is needed immediately in an emergency. Two examples of
this situation are emergency generators for backup in power outages and
portable coolers to prevent data-center equipment outages.
While managers might not be able to justify these purchases using a
straight cost comparison, they should consider the potential for other
losses, such as danger to health and safety or lost-opportunity costs
that would occur if the equipment was not available.
So where is the dividing line between renting vs. buying equipment?
In short, buying tends to be the best option for general-purpose
equipment used regularly for maintenance. Examples include fork lifts
used daily for loading and unloading trucks and moving material, and
aerial work platforms used for tasks at high elevations, including
changing lamps in high-bay lighting fixtures, cleaning windows, washing
walls and ceilings, servicing electrical-distribution systems, and
A Closer Look at Equipment Rental
Renting vs. Buying Equipment: Cost Considerations
Equipment Issue: Rent or Buy?
Renting or Buying Lifts: Financial Tips