Renting Oilfield Equipment: Is It Better Than Buying Them?
Oilfield equipment rental has seen tremendous growth recently. This is due to the rise in oil drilling and the large U.S. market for the product. The demand for domestic oil drilling will rise as the nation works to boost its level of energy independence.
If you are employed in the oil sector, you may be familiar with the price range for oil equipment. Due to the high cost of pumps, trucks, mixers, and other assets, renting equipment is the ideal option for your company for several reasons. Continue reading to find out.
Should You Purchase or Rent?
Your choice of whether to buy or rent your oilfield equipment will be a significant one. Typically, the biggest investment your business can make is in oilfield equipment.
You must thus decide what will benefit you the most. Both alternatives have many advantages, but renting is usually more affordable than buying.
Drawbacks of Buying Equipment
It requires a large financial commitment, and the cost rises if you wish to employ the most recent models. Additionally, you will handle all maintenance and repairs rather than having a rental company do it.
Benefits of Purchasing Equipment
The equipment becomes an asset once you own it. You always have the necessary tools at your disposal. Selling it is another way to recover your investment.
Drawbacks of Renting Equipment
You will have invested a lot of money without any equity once the equipment has been used for a while. If an item is already in use, you might not be able to utilize it.
Benefits of Renting Equipment
Renting equipment right away makes you trustworthy for finishing tasks swiftly and effectively. Renting enables you to always have the newest and most modern models at your disposal. Also, it is far less expensive than buying equipment.
The rental provider will take care of all upkeep, so you won’t have to, saving you money on unanticipated costs. They can transport the tools you require to the location of your work.
Factors to Think About
No matter your business sector, you must choose between buying and renting new equipment. Cost-effectiveness and maintenance are the two most crucial considerations while making this decision.
Take Cost-Effectiveness into Account
Will the equipment still be valuable to invest in in a few years? Will it be viewed as out of date? You might need more money to buy oilfield equipment because it is so pricey.
Renting the equipment might be a better financial decision than taking on debt to buy it. Talk to a financial expert if you are even thinking about buying rather than renting.
Consider the Maintenance
Basically, you will have two choices regarding maintenance: pay for the upkeep or perform it yourself. The success of your equipment depends on your ability to make repairs.
This means that if you buy your equipment, you might need to have an inside repair crew to afford it.
You can accurately plan your budget and price by renting the required equipment. If you are aware of your rental charges, there won’t be any surprises regarding urgent repairs.
This will simplify creating a budget, and your project will be more successful.
Renting equipment makes your expenses transparent. Both the rental price and the cost of fuel are known to you.
You only need to be concerned about this. You only pay for the equipment when you really use it, so you never have to worry about unforeseen costs.
Renting equipment is, therefore, advantageous for enhancing cash flow. Because you won’t need to make any significant equipment purchases, there will be greater potential for profit.
Additionally, since rental equipment is tax deductible, you’ll pay less in taxes overall and have more money in your pocket.
Royal Services, LLC can help you with equipment rental in Artesia! We’re a veteran-owned company established in 2012—offering trucking, equipment rental, hot shot delivery, well testing, and flowback in the Permian Basin.
We have a Better Business Bureau rating of A+ and comply with ISNetworld & PEC SafeLand. Contact us today to learn more.