If you own a construction company, you likely need a lot of different types of construction equipment. When you are looking to obtain this equipment, you have three options. You can either purchase the equipment outright, you can lease it, or you can rent it. Taking the time to educate yourself on the benefits associated with each option will allow you to determine which may be the better option for your business. Here are three benefits of leasing construction equipment.
You Can Write-Off Your Lease Payments
One of the biggest benefits associated with leasing construction equipment is that you can often use your lease payments as a tax write-off for your business. If you are looking for ways to decrease your tax liability, this may be perfect for you. It is important to note that tax laws do vary based on the type of business you own, so it is best to consult with a tax adviser or accountant if this is something you are interested in taking advantage of or finding out if it applies to your business.
You Don't Use As Much Capital As Buying the Equipment
Another major benefit to leasing construction equipment is that you don't use as much of your capital as you do when you buy the equipment. When you buy construction equipment, you have to put down a large down payment and then you have to make sizable payments until the equipment is paid off. When you lease equipment, you typically put down a smaller down payment and your monthly payments are lower. If you don't have a lot of capital or money to spend at this time, this may be a great option for you.
You Can Trade Equipment Up Every Few Years
The last benefit to leasing construction equipment is that you can trade in your equipment every few years for the newest models. When you lease equipment, you have the option of buying the equipment at the end of the lease term or trading in the equipment for a new model. If you like to have the newest types of equipment, leasing may be ideal for your business.
There are many advantages to renting, buying and leasing equipment. What is right for one construction business may not be best for another. Taking the time to learn about the three different options you have for obtaining construction equipment and then thinking about your business will help you decide which is the better option when you are in the market for a new piece of construction equipment.