When a business chooses to rent heavy machines, they have to enter negotiations with the rental company. Buying new equipment requires a large investment of capital. Repurchasing equipment is a option that businesses should consider as it requires less capital and yet allows businesses to own the machine.
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WHY REPURCHASE CAN BE MORE PROFITABLE THAN RENTING OR BUYING BRAND NEW
Renting equipment can involve various pitfalls such as lack of storage space, contractual constraints, etc. Also, long-term renting can be very expensive. In such scenarios, instead of buying brand new equipment for construction projects, businesses could consider repurchasing equipment. The following are some benefits of the same:
With rented equipment, companies would have to spend time and energy negotiating contracts and renewing these as and when required. Also, there is always scope for confusion regarding who pays for repairs or damages where rented equipment is concerned. This can be avoided by repurchasing equipment instead of renting.
With repurchased equipment, companies need not worry about paying rent for the equipment over a period of many months. Once a company buys any equipment, it would also make sense to have in-house drivers and operators. This means companies can also save on the higher costs related to hiring skilled operators on a short term basis.
MAKE GOOD DEALS
If companies are sourcing all their equipment from a single supplier, then they could ask for better deals where repurchased equipment is concerned. By building relations with suppliers, companies can avail quality repurchased equipment in an easy manner.