Long-term tool hire vs purchasing outright – 10 things to consider
Choosing whether to hire tools on a long-term basis or whether to purchase them outright, is something that fit out and refurbishment companies may find themselves considering for every project. There are advantages and disadvantages to both long-term tool hire and purchasing, and your decision is likely to depend on the individual project, the tools in question and your own situation.
We look at the advantages and disadvantages of long-term tool hire versus purchasing equipment and identify the key things to consider so you are confident when deciding which option is best suited to your needs
10 things you need to consider when thinking of hiring your tools on a long-term basis
1. Repairs & Breakdowns
When looking at whether to hire or purchase your equipment it is critical to factor in the unexpected – such as repairs and breakdowns. As much as you think it won’t happen to you, or how long you expect a tool or piece of machinery to last, unfortunately breakdowns can and do occur, particularly in the construction industry where they experience heavy wear and tear.
If you decide to take on ownership of the equipment then you will be responsible for the cost to repair, or arranging a warranty claim, not forgetting the cost of downtime caused due to not having the tool to hand when you need it or having to replace it at short notice.
Hiring has a major benefit here, in that the company supplying the equipment is responsible to maintain and replace the equipment in the event of breakdown. A reputable tool hire company will ensure the equipment is replaced that same day or at the latest early the next morning – resulting in very limited downtime.
2. Latest Equipment/Upgrades
The other aspect to consider is the length you would expect to keep the equipment for. Is it equipment that is likely to date quickly or be superseded by upgraded versions or newer developments in technology?
Some types of equipment hardly change design in 10 years, whereas other tools can have new models coming out every 6 months. If this is the case it may be worth sticking with a reputable tool hire supplier who will always provide you with the latest up-to-date kit.
Technology is always developing particularly around the area of health and safety and with regulations surrounding dust control and Hand Arm Vibration (HAVS) to name some, you may find some of your older tools are not allowed on site as they do not meet current regulations.
3. Regular Servicing
As well as the risk of breakdowns, if you purchase your own kit make sure you have considered the cost for regular maintenance and servicing. Is this something that you can do, or will you have to allow extra costs for it?
Any good tool hire company will have a thorough examination process for their kit before sending it out on hire, as well as a regular service program – usually 6 monthly or yearly depending on the item. Included in all this is wearable parts that may need regularly replacing such as filters, diamond cutters, motors, bearings etc.
4. Transport and Storage
So, what happens when you are not using your tools? Have you got space to store items securely on site without the risk of them being stolen? How are you going to get them to and from site? All these factors need to be considered when making the decision to hire or purchase your own tools.
Whilst this may not be such a problem with smaller hand tools, it becomes more of an issue the larger items get. Just because you can fit it on your van doesn’t mean that you can carry it. You need to be aware of the weight of the item and whether your vehicles have the loading capacity to transport the goods safely and securely.
If it is a towable item, have your drivers got the right license for towing? With hiring, you have the benefit of not having to worry about all of this. Just simply book it up a day or two before you need it, and you can arrange it for delivery on site for exactly when required. Again, when you have finished it will be collected without you having to worry about how you are going to get it back from site.
Or if you need the equipment in London one day, and Manchester the next, it may be a lot easier to hire the equipment rather than worry about the logistics around how you are going to get it to the other end of the country. Tool hire companies will have multiple tools that they can deliver wherever you require them. This means you won’t need to worry about whether the first site will finish the job in time for you to get equipment to the next site exactly when you need it.
5. Keep it Legal
Don’t overlook the legal requirements of using tools, including site specific Health & Safety rules. Electrical equipment will need PAT Testing every 3 months if being used on a construction site. All hire equipment if needed should come with a fresh PAT Test when delivered (although if the hire is longer than 3 months then it will be your responsibility to get the tools PAT tested for use on site). If you contact your hire supplier, they should be able to arrange this for you. The other option to enquire about is that they swap the tool out for one that has a fresh PAT Test on it, this saves the need for testing on site.
Lifting and Handling equipment is the other area to be aware of the regulations around this type of equipment. The Lifting Operations and Lifting Equipment Regulations 1998 (LOLER) places duties on companies that own and use lifting equipment to ensure that equipment is fit for purpose and is subject to a statutory periodic ‘thorough examination’ carried out by a qualified technician.
If you hire equipment this should come with a 6 monthly or 12 monthly LOLER Certificate and the hire company should notify you prior to this expiring, to make you aware when the equipment is no longer safe to use. This can then be retested or exchanged for equipment with a current certificate.
6. How often will you use it?
Consider how long you will use the equipment on site and look at the average weekly hire costs. This way you can work out what the payback on a tool would be. This should enable you to see (all other costs aside) whether it is better value to hire or purchase your tool.
Purchase cost / Weekly hire cost = Number of weeks it will pay for itself
7. Long term hire options
Ask your hire supplier if they offer special, longer term hire rates. If you are going to be using a tool for longer than 12 months, then it is worth looking at other hire options. A good hire company should offer reduced rates on tool hires that are this length or longer to make it more attractive to hire equipment and not have to worry about the maintenance.
Some tool manufacturers such as Hilti will offer a fleet management service for tools and maintenance over a 2 or 3 year period with the option to auto renew. However, be careful to check the terms and conditions thoroughly to see what you will be locked into and what options there are to terminate the agreement in the event of unexpected circumstances.
Here at THX we offer a service called THX Smart Hire. This is available on 12, 24 and 36 month plans, but with the added flexibility of being able to cancel at any time during the agreement and revert to the standard hire rate if you decide that you don’t need it after 6 months.
If you do decide to go down the route of purchasing your tools, consider the depreciation of the asset, particularly on large capital expenditures such as plant equipment. Will you be looking to sell the item after a period of time? What will it be worth then? Is there a market for second-hand equipment of this kind? Does the depreciation outweigh the cost to hire?
With large capital items, it is essential that you look at the cost to insure in the event of damage or theft. Do you currently have an insurance plan on plant and tools? Or what will it cost to get one? If you hire, then enquire as to what hire insurance options are offered by the hire company. And don’t forget to check the excess.
10. Hidden costs
When hiring or purchasing equipment be aware of any hidden costs that you might come across. The accessories such as blades, or fuel, wearing parts etc. Also, with hire, consider the nature of your work as some hire companies will charge for cleaning equipment or damage. What sites do you work on, are they easy to deliver and collect from? Is there a risk of failed deliveries and collections due to strict booking in procedures? This could incur extra costs that you may not account for at the beginning of the job.
A reputable tool hire company will be transparent in its pricing – so there are no unexpected costs.
We hope this article has given you a good overview of the different areas to be aware of when considering long-term tool hire or purchasing outright.
If you have any questions or would like to discuss any of these areas in more detail, then please feel free to call us on 01234 371820 and chat to one of our friendly Xperts.