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When You Should Buy Construction Equipment

One of your biggest expenses when running a construction company is acquiring heavy equipment. When you need to replace old trucks and loaders or add new machines for upcoming jobs, you have to decide whether buying the pieces works best for your company financially. 


Buying equipment makes sense if you will be using that piece 60%–70% of the time. If it remains idle for significant periods, then renting or leasing it would be better options for you. Also, you need to evaluate how being without that particular item at any time might impact your business. If the absence of a generator would delay work on various jobs, costing you time and money, then you should consider buying one. 

Expenses and Deductions

When you buy equipment, you benefit from various tax deductions like depreciation, repairs, interest, and insurance which will offset your annual tax bill. Of course, buying usually means a significant initial investment as well transportation, storage, and repair costs. Do a detailed cost analysis before deciding whether to buy the equipment and include all of these factors. 


If your current financial situation will not allow you to buy the equipment, then renting is the obvious solution. However, you should explore more economical ways to purchase what you need first. For instance, visit a used heavy construction equipment dealer and buy a no-frills version of what you need. When you rent new equipment, you are paying for some fancy technology that your company may not need or use. Also, consult with your banker about financing your purchases so that your capital stays available for other business expenses.


Before you buy, research what the resale value of the equipment will be. If the truck you purchase performs well and keeps its value, you can feel more secure about your investment. You can sell it and make back a significant portion of its cost If your business needs shift.

Sometimes, renting makes more sense than buying, especially if your need for the equipment is temporary. However, buying is probably the best choice if you need that piece consistently and have the means to finance it or buy it outright. You will benefit from various tax deductions, and your business will not stall because you do not have the tools you need to finish your projects. Discuss the decision with your financial advisor and then visit a reputable heavy construction equipment dealer.