Should You Now Replace Your Construction Equipment?
This is a huge financial decision. After all, buying new equipment could cost at least $100,000. However, you still prioritise productivity and long-term cost savings. Old equipment has already experienced heavy wear and tear. In addition, they’ve been requiring frequent maintenance recently.
With those reasons, it’s economic and practical to buy new equipment instead. There will be fewer downtimes and you’ll benefit from optimum performance of the machinery. You’ll get those benefits for several years to come, especially when the outlook about your future business and operations seems bright.
Is it really time to replace your construction equipment?
Engineers often face performance, time and cost constraints. These are also the considerations when deciding whether to buy new construction equipment or continue on with the repairs. After all, when buying new equipment, engineers have to consider the following:
- Upfront purchase price
- Taxes & interest (especially when financing)
- Equipment storage
- Future disposal or its selling
These are certain when purchasing new equipment. Whether you make a down payment or pay full cash, the upfront investment will be too large. Other things such as insurance, taxes and depreciation are also certain.
On the other hand, there’s uncertainty in your business operations. Are you certain that you’ll continue to handle projects in the future that require the same machinery? Whether there’s a stream of projects or not, you’ll still continue to pay for the new equipment until the total price is settled.
Other options to remain flexible
In uncertain businesses such as construction and excavation, flexibility is the key to survive and thrive. The costs should be tightly controlled whether the economy is booming or not. Aside from cost savings, you’ll also have more resources to invest to other equipment or technologies that will allow you to be more productive.
One way to control costs and address uncertainty is by renting equipment instead of purchasing a new unit. This is the practice of even huge multinational corporations when handling projects. Renting equipment is a form of just-in-time usage and spending. You only pay for it when you’re using it or when your particular project requires the equipment.
Another option is to purchase used equipment. The costs are significantly lower (in exchange for the labour hours already logged in) but it can still be a good way to ease the burden especially when the upfront cost of new equipment is outside the financial range of a company or contractor.
Whether you decide to replace your construction equipment or not, here at K & G Machinery we can provide you with excellent options. You can call us today at 07 4943 6160 and ask us about our available equipment (sales and rental).