Farm Machinery: Equipment Rental vs. Purchase

Do the math to know for certain whether purchasing or renting equipment and farm machinery makes more sense for your situation.

| May/June 2016

Now is the time to tackle that list of spring and summer projects that need doing on your small farm or acreage: clear brush and reseed the back pasture, trench out the low spots in the hayfield, till up the 1-acre garden, and put in a larger culvert across the driveway. There may or may not be significant fencing work ahead, too. It’s a big list of projects, but you’re up to the task.

There are, however, a couple of things that might slow you down. Your tractor is woefully underpowered to run the brush mower, and it doesn’t have a loader; your tiller has been in need of repair since last spring; and you don’t have a backhoe to do the heavy digging, trenching or drilling. If you need to get the work done, you’ve only got a couple of options: Go out and purchase equipment, or rent the equipment by the hour or day.

Sure, you may have a friend or relative who’d be willing to loan you the equipment, but chances are if the project is seasonal in nature, they will probably be using the equipment themselves. Also, what happens if you accidentally damage the machine? Not only will you have to repair it, but you’ll most likely not be using the loaner anytime in the near future.

There are multiple factors that may figure into the decision of when it’s best to purchase equipment or if it makes more sense to rent. Some of the initial questions you may want to ask yourself are:

• How often will you use the equipment? Is it a one-time job, or will you need it time and time again?
• Equipment purchases may tie up a lot of your capital. Do you have the funds to make a long-term commitment?
• Do you have the ability to operate the equipment efficiently, as well as to maintain and service it?
• Are there any tax advantages to purchasing as opposed to renting?
• If you purchase, will your equipment hold its value or will it depreciate and become obsolete?

Renting equipment

In most cases, if you’ll need the equipment for an occasional project or a project that requires a piece of specialty equipment, renting may be your best option. Let’s look at backhoes, for example. They are great tools that come in handy for everything from ditch work and drainage projects to site preparation. They also come in many sizes, from small stand-on self-propelled units to large, heavy-equipment versions. There are also backhoe attachments that can be added to small compact tractors.

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