Why Dry Hire is Better than Buying an Excavator or Any Construction Equipment
If your project often requires using excavators, it may seem logical to purchase your own equipment. After all, hiring means paying for the excavator every time you need to use it, which may be for several weeks recurring every few months or so.
But purchasing a piece of equipment, such as an excavator, requires significant investment. Hiring does seem like a suitable choice, especially if you are on a budget. And let us face it; everyone wants to keep the costs down. So, how do you make the right decision that will benefit not only your pocket but also the entire project?
This blog delves deeper into the issue of whether you should consider buying or hiring an excavator – or any construction equipment for that matter. We will weigh the pros and cons, comparing your two options so that you can select the right one for your project and business.
Let’s get started.
Pros and Cons of Buying Equipment
Perhaps the biggest reason businesses opt to commit to purchasing rather than hiring an excavator is the ownership. Being the owner means you can enjoy the flexibility of when and where you can use the equipment. You can also do the same when you hire, but ownership gives you more control. The machine is yours, so you can do whatever you want with it whenever you want.
You can take the excavator to one job site and then the next. No one will tell you it is not allowed (unless, of course, you do not follow road rules). You are free to use the equipment, and you do not have to pay any fees, especially if you manoeuvre or operate it yourself.
But here comes the tricky part.
Many people fail to realise that ownership is not all about freedom. You have several responsibilities attached to the piece of equipment you just bought. And knowing that an excavator is a pretty hefty investment, it is only right that you treat it excellently. Regular maintenance, proper storage, complete and professional analysis, and many other routine tasks are a part of your duties.
If you neglect your responsibilities, especially periodic checks and maintenance, you will have to pay for the expensive repair costs. Apart from servicing, you should also make sure that you have adequate storage for the equipment.
If you’re among those who are lucky enough to have sufficient budgets, you probably have your own workshop and facilities. You can easily store and fix any issue that you may have noticed. But if you are like most project or construction managers, it is tough to manage plant machinery. Without storage, time, and financing aid, you will end up wasting your hard-earned money on the equipment. For this reason, many Aussie construction businesses turn to dry hire.
Dry Hire Explained
You have two main choices when you hire an excavator, skid steer loader, bulldozer, or other machines: dry hire and wet hire. It’s important to know the difference between the two before you even hire the equipment.
Chances are, you only require an excavator or the machinery itself because you or someone else will operate it. In this case, you need dry hire. Some companies offer the machine and the operator – an option called wet hire.
Dry hires are more preferred in Australia. You probably have a person on standby who knows how to use the machinery. This individual is a licenced operator whom you trust and choose to work with on other projects. It’s a big reason why dry hire is better. Also, wet hire is costlier because of the additional manpower that comes with the machine.
Another enticing fact about dry hire is that it is easy to understand. The legalities are not as complex as a wet hire. The agreement is straightforward with fewer restrictions. Of course, dry hire is more affordable.
On the other hand, a wet hire means that there is another person involved who will operate the machinery. Sometimes, it can get problematic because you may not like the results or even the whole transaction. If you are someone who likes consistency and prefers to use the services of your operators, a dry hire is the better choice.
If you would like to learn more about dry hire and whether it is suitable for your project, please read this blog post.
How You Will Benefit from Dry Hire
Many new customers always ask us, “Why should I hire an excavator? Why not just buy it outright?” Being in this industry for several years, we thought that the benefits are quite obvious. However, we do understand that many people overlook those advantages. From a consumer point of view, it is indeed a smarter choice to purchase rather than hire a piece of construction equipment. After all, becoming an owner can provide tax cuts.
But in reality, hiring trumps buying easily, especially when the subject involves construction equipment. So, what are the benefits of hiring? Let’s take a look:
As the contractor, subcontractor, or customer, you do not have any responsibility regarding the compliance of the equipment. You merely pay for the provision of equipment, which means it is the rental company’s sole duty to remain compliant with the law. The pressure to meet ready usage requirements is placed on the company, as well. That means that there is a much lower risk for you as the customer.
Since it is the company’s job to ensure 100% compliance with the excavator or any construction machine you would like to rent, you can be sure of its quality and performance. The company will take care of the equipment by keeping the fleet up-to-date, especially when it comes to routine maintenance and servicing. Therefore, the machinery is safer for operation, which is a huge plus compared to buying.
Most people will tell you that buying is more cost-effective. You do not have to pay the rental fee each time you need an excavator. You can simply have someone operate it for your project. But renting the equipment, believe it or not, is a better financial decision.
Take a look at the upfront investment you need to provide when purchasing. You can already tell the vast difference between buying and hiring. Most of the time, you will use a variety of machines, switching from an excavator to a dozer to a bobcat loader. All of them require an upfront investment. And usually, you only need one at a time or rarely ever again.
With the huge possibility that you will no longer use the equipment again, there is truly no point in spending a considerable amount to buy. Many heavy equipment options are used for a specific task or project. It takes months or even years before you use them again. You end up paying more for the storage and upkeep.
Speaking of upkeep, hiring requires little to no maintenance. The cost of the asset maintenance will not rest on your shoulders. You do not have to worry about it, and you will surely be thankful you do not have to.
Maintaining plant equipment is expensive. You have to make sure it is clean even when you do not plan to use it for a long time. Also, if something goes wrong, you need to call a mechanic or a professional so that the equipment will function again. On many occasions, a repaint is required. Having an old, worn machine does not look safe to operate at all.
Part of the maintenance is having a storage facility for the excavator. You may even need appropriate lifting equipment for some machines. That way, you can move it around and send it to the project location.
All the requirements mentioned can take too many resources. Instead of focusing on your project, you end up wasting a lot of time.
Every piece of equipment, even the ones that are expensive and are of high-quality, will eventually need to be disposed of. You can either sell them to another party or get rid of the old machine. When it is no longer useful, where do you take it? How will you deal with that big machinery in your yard? It can block people’s way and can be unsightly, as well, especially when it has stopped working for some time.
When you hire a machine, you do not have to worry about equipment disposal. It’s a hassle that you will never have to deal with. The rental company will take care of the process and handle the hassle of sending the old machine to an auction site or anywhere else.
Government bodies and even pressure groups want construction managers to be in with the times. For example, we know how significant it is to help protect the environment, reducing impacts, such as lower emissions and carbon footprint.
If you choose to buy, you will eventually have to upgrade your current fleet. Unless you have an unlimited budget, purchasing new equipment is not a good idea at all. On the other hand, if you stick to hiring an excavator, you can enjoy updated technology without the huge cost associated with any purchase.
Let us say that you did buy an excavator. Your office is in Perth, which is also where you store the equipment. What happens now if your next project is outside of Perth? That means you will have to deal with the additional transport costs. Moving the machine, especially if you require an excavator, dozer, and a few more can easily make a sizeable dent in your profits. That huge chunk is not worth the effort and stress of moving the heavy equipment from one location to another.
When you rent, you can truncate the costs since the rental company will simply send the equipment to the location.
Your projects can differ from one to the next. That means you will need more than one type of equipment. Some types of plant machinery are flexible enough that you can use them for digging, breaking materials apart, and grinding. However, many construction jobs require specialised equipment for them to be done correctly and quickly.
Many contractors do not find it economically viable to purchase more than one equipment or other types. That is why hiring is better than buying.
We have already mentioned how cost-effective it is to rent than purchase. But here is another reason that directly relates to your financials. If you buy, you tie up capital, which you can no longer use for other projects or expenses. Instead of purchasing materials or assets that you would have liked, you end up spending more for a piece of equipment that you may not even use more than once.
Making the Decision
You can easily see how advantageous it is to rent or hire an excavator or any construction equipment compared to buying. Over the recent years, companies have engaged in machinery rental. Australia has seen an increase in demand for such a transaction, especially with construction consumers and business-to-business (B2B) construction markets.
The technology in construction equipment evolves rapidly. Over the last few years, we have seen so many great changes that focus on comfort, efficiency, sustainability, and speed. Construction managers and their clients call for quick service, finishing projects right on time or even before the deadline.
You will agree that time is of the essence, especially in the construction industry. Businesses know that time is money, which is why contractors look for ways to achieve or conclude a project on time. Back then, it was all about saving money. People used to look for equipment at the lowest price. Today, the attitude has changed. Construction supply chains want to create sustainable relationships with their suppliers. As a result, they understand the challenges better, allowing them to collaborate to deliver an excellent service.
As with any other product or service, rental companies are not always the same. Our mission here at ESM Resources is to become your first choice whenever you need top-quality machinery. You can check out our list of equipment here. Alternatively, you can contact us to learn how we can help you with your construction project.