When leasing construction equipment, you may be torn between new or used machinery. There are multiple variables involved, so review this rundown of the pros and cons of each one to help you make an informed decision.
New Construction Equipment Leasing: Pros and Cons
New construction equipment may be more expensive, but there are some benefits that help compensate for the extra cost. For starters, if your construction company does specialty work, you may need better technology to get the job done well. For any type of new equipment, you also get to take advantage of a more extensive manufacturer’s warranty, a major asset when you’re leasing a more expensive piece of equipment.
The biggest downside to new equipment leasing, of course, is the price. The larger amount you finance, the more you’ll end up paying in interest. It just depends on how this added cost stacks up to the value of the benefits associated with new equipment.
Used Construction Equipment Leasing: Pros and Cons
Leasing older construction equipment allows you to pay less and can be useful for newer companies with limited budgets or general construction companies that don’t require specialized equipment.
On the downside, older equipment generally only comes with a limited warranty. Any repairs that aren’t covered in your plan end up being extra costs your company must take on. Plus, aged equipment may require parts that are no longer manufactured, especially if there’s a newer model or technology being used in current production. It’s important to perform additional due diligence to determine the true cost of upkeep with older construction equipment.
The best construction equipment lease depends on your company’s current business needs and finances. Always research warranty and maintenance fees between new and used equipment during your decision-making process, as well as the cost difference between financing each type of equipment. Once you have a clear idea of both maintenance costs and financing costs, you can make a smart decision on the equipment lease that makes the most sense for your business.