Hire vs Buy

Here at Hire Station we understand that hiring equipment might not always be the best option. When considering whether to Hire or Buy there are various critical factors you need to take into consideration such as:

  • purchasing
  • other costs
  • and usage  

Please find below are our 3 simple steps that will help you to decide whether you need to hire or buy.

Step 1 - Purchasing

Capital Costs and financing

The capital cost and financing is broke down into the initial purchasing costs of your product:

  • How much will the equipment cost? - this should be the full cost inclusive of VAT
  • What percentage, if any, of the purchase price will be financed? - have you taken a loan out to pay for the equipment? or are you spreading the payments out of a specific period of time?
  • What is the agreed rate of finance? (as a percentage) - this is pre-agreed by the creditor before any payment is transferred to you for the purchase of the equipment

Depreciation

  • Over what period will the equipment's cost depreciate? (E.g. 1, 2, 3 years etc.) - most companies prefer to depreciate equipment over a period of between 3-5 years
  • What will the end of life value of the product be? (as a percentage) - 

Delivery costs

  • What is the delivery cost? - Including the costs of any pre-delivery checks & delivery

Step 2 - Other costs

Maintenance, insurance, servicing etc

Here you need to include aspects such as:

  • Statutory inspections, such as LOLER
  • Annual insurance costs - this obviously varies between provider, how long youve had the equipment, any previous claims etc
  • Annual repair, maintenance & servicing (this is used as a percentage of the purchase cost)
  • The number of incidents that have resulted in damage, loss or insurance claims - the clsoer this is to zero the better
  • How much the insurance excess of a claim is - this is the pre-agreed amount of money you will pay upfront to the insurer should you make a claim
  • The number of hours spent on purchasing, accounts & insurance
  • The number of hours spent on maintenance
  • The number of hours spent on delivery

Step 3 - Usage costs

Usage costs

With regards to usage there are 2 main aspects to take into consideration:

  1. The number of days per year the product is used
  2. The average weekly market hire rate

When using the calculator it is important to use average costs to you as we understand that every year the price you pay for fuel, insurance and maintenance will vary depending on your situation, availability etc.

Please see our HAE 'Hire vs Buy' calculator below. Simply input the data and see whether economically you should hire or buy!

HAE

'Hire vs Buy' Calculator Kindly provided by Hire Association Europe

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