If you have a business which needs transport equipment, you will be faced with two options. The first is to buy the transport equipment and the second is to rent it. Many business owners assume that purchasing their equipment is the best option, but this is not always the case. There are many reasons why renting your transport equipment is better than buying and you need to know what these are to make an informed decision.
The primary reason why you should rent your equipment is the costs. Transport equipment can be very expensive depending on the specs and the type of equipment you need. The high costs are something that many new, small and medium-sized businesses will not be able to carry. If you do not have the capital to pay for the equipment, renting would be the best option.
When you rent your transport equipment, you will be paying either a monthly fee or a fee for the days that you need the equipment. This will be easier for most businesses to handle and you will not have to worry about your assets standing when you are not using them.
Higher Standards Of Equipment
The equipment that you are able to buy will generally not be the top of the range unless you have a lot of starting capital. This means that your purchased transport equipment may not be the best for your business. When you rent the equipment, you can get the top of the range without too much effort. Of course, when you rent the top of the range equipment, you will need to pay a higher rental fee, but this will not be close to the price of the equipment if you purchased it outright.
Taxable Income Deduction
In many countries, when you rent or lease your business equipment you will be able to deduct the costs from your taxable income. This will lower the amount of tax that you need to pay. This is something that you will generally not be able to do with purchased equipment as this is seen as an asset of your business.
No Breakdown Risks
Transport equipment comes with the risks of breakdown and this will cost you more to cover. This is not something that you have to worry about when you rent the equipment. This is due to the fact that the rental company will carry these risks. If the equipment breaks down, you will need to contact the rental company and they will have to sort out the repairs.
Of course, when it comes to these risks, you need to read the terms of the rental agreement. There are times when you might be liable for some costs depending on why the equipment has failed.
There are many reasons why you should look at renting your transport equipment instead of buying it outright. The lower costs are the greatest reason with the higher standard of equipment being a close second.