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Many industrial and construction companies have the option to rent or buy a variety of equipment, but many have not considered weighing the choice for specialized tools. The considerations for hydraulic or specialized tools are somewhat unique. Below you’ll find a framework for deciding whether rental or purchase is right for you.
A decision on whether to rent or buy should be evaluated in two ways:
- From a project standpoint
- From a long-term perspective
A project will force you to think about the task at hand, while your long-term business needs will encourage you to think about how to manage your work schedules and tool inventory in the future.
The Project
From a short-term project standpoint, you likely have a specific project application and set of tools in mind. Prior to proceeding, consider your needs throughout each step of the project – from planning to execution – before making a decision.
Tool Acquisition
Your experience acquiring industrial tools will vary based on the set of tools needed for your project. In cases where your tools are highly specialized, it may be faster and easier to purchase the tools compared with finding a rental company with the right inventory. Keep in mind, an experienced rental partner can also be a good choice for the job given their wide inventory selection, giving you alternatives you may not have considered.
There are also financial implications to consider at this stage. Depending on your company’s situation, the greater hurdle may be gaining approval for equipment or tool purchase. When you have access to capital and your project timeline allows for it, purchasing may be the right choice. When your budget and project schedule is tight, it is often easier and faster to approve a weekly or monthly tool rental expense within your operating budget. Keep in mind, renting tools can include additional shipping and delivery expenses.
Project Execution
Your team’s ability to operate the equipment is critical to timely and safe project execution. Whether you purchase or rent your tools, selecting the right partner will ensure your team has the proper training and field support for your equipment.
The amount of time required to execute the project is typically front and center in the rent vs. buy decision. Depending on the tools required for the application and the rental partner you are working with, the sum of the rental payments begins to exceed the purchase price after three to six months. Longer-term projects always have the potential for timelines to slip leading to unplanned weekly or monthly rental expenses. Be sure to account for this risk in your evaluation.
Project Completion
What will you do with these tools after the project? Many prefer the clean completion of a rental transaction where the tools are shipped back to the rental partner for inspection and maintenance. Others may have the corporate infrastructure in place to manage purchased assets including the repair and storage of specialized tools. The third option is to liquidate the purchased assets upon project completion. These options are all viable and may appear simple to some and complicated to others, yet are often overlooked.
Long-Term
From a long-term perspective, it’s a bit more than just finding the specialized tools to fit your project application. You’ll have to determine how often your tools will be used in the future and how they will be stored, managed and maintained for continued use.
Future Use
Like many rent vs. buy decisions, determining whether the tools can be used again in the future (and how often) has a significant impact on the financial comparison. Somewhat unique to hydraulic tools, however, is that you might choose to purchase some components while renting others.
As an example, you might be considering a lifting system consisting of a pump, hoses, manifolds, gauges and a number of hydraulic cylinders or perhaps you are considering a hydraulic bolting toolset consisting of a pump, hose and a variety of hydraulic torque wrenches. In either case, the pumps, hoses and accessories are typically applied in a variety of lifting or bolting applications, while the hydraulic cylinders and hydraulic torque wrench models are more specialized to the application. In either case, you might decide that the pumps, hoses and accessories can be used several times in the near future and the purchase of those items makes the most sense. On the other hand, the hydraulic cylinders and torque wrenches may not fit the next application making rental the better option for those items.
Lastly, planning your tool needs in advance ensures delivery on a timely basis as renting in emergency situations, especially with rare tools, can be both costly and time-consuming.
Asset Management
With the purchase of any equipment, the ability to store, repair, insure and manage the inventory must be taken into consideration. This is not an option for every company. Many businesses prefer their rental partner carries the burden of owning assets, while others have this capability and hold hydraulic tools in their fleet. Finally, there is always the option to liquidate purchased hydraulic tools, but it requires time to find a willing buyer and negotiate a sale.
Rent vs. Buy: How to Decide
There are no hard-and-fast rules on when to rent or purchase tools. However, when you take into consideration all the factors and your short-term and long-term needs, it should help guide your decision. A commonly accepted approach is to gather cost estimates for each solution and evaluate using the considerations below.
The Enerpac Tool Center has an extensive range of industrial tools available for purchase or rent on-demand. Our rental program provides a flexible approach, giving you the opportunity to rent and ramp up a project quickly with world-class tools. Local support for selecting the right tool for your application ensures your project runs smoothly. With $32 million in rental equipment and $1.25 million in new assets, the Enerpac Tool Center is able to offer tools including cylinders and jacks, pumps, bolting tools, pipe cutting and beveling, flange facers and end prepping machines, pullers and much more.
For more information call 832-205-9990 or visit store.enerpac.com.
