The benefits of buying construction equipment
Australia's contractors appear to get busier by the month, especially as rising housing demand keeps the construction sector operating at maximum capacity.
Contractors completed nearly $15 billion worth of residential construction work in Q3.
According to the Australian Bureau of Statistics, the residential construction sector grew by more than 11 per cent in the June quarter of this year. Contractors completed nearly $15 billion worth of work on these projects over the three-month period.
There's clearly plenty of work for local contractors to sink their teeth into, but what's the best way for them to secure the equipment they require? With the help of truck and equipment finance, contractors can own the resources they need on a payment schedule that suits their business.
Why buy instead of renting?
Business advisor Cygnus investigated the difference between buying and renting essential equipment in the construction industry, finding there are notable advantages for contractors that secure ownership of these tools or vehicles.
The organisation estimated that in around 60 per cent of cases, it's more cost effective for a contractor to purchase the equipment they need, provided its integral to their daily operations.
Construction sales company Ritchie Bros noted that the ability to use finance to limit the up-front cost is another key motivator when businesses choose to buy instead of rent. This allows them to pay off the purchase over time in a similar fashion to renting, but with the added bonus of being able to claim ownership of the item in question once it is paid off.
What are the key points to consider?
There are a range of variables businesses need to keep in mind when evaluating the purchase of construction equipment, especially at the more expensive end of the spectrum. Whether it's new car finance to get people to and from site or a bobcat to make the job easier, it's important to integrate these additions with business objectives.
According to Cygnus, there's more than just the initial purchase cost for businesses to consider. When owning any vehicle or valuable piece of equipment, there are ongoing maintenance and operational costs that can impact the viability of an investment.
When planning purchases, it's vital these are taken into account, especially when managing finance repayments as well.
By choosing to purchase equipment, businesses can then sell it to recoup their investment if they discover it is no longer required.
To find out more about the loan options available to your business, contact the team at AAA Finance.