Companies that regularly recycle on a large scale have a decision to make. They need to figure out whether they need to buy, rent or lease their equipment. There are advantages and disadvantages to each.
You may be thinking about buying a baler machine, a commercial compactor, or an industrial garbage compactor. Generally, it’s best to decide on what to do on a case-by-case basis. We’ll help you make that decision.
Benefits of Leasing
Let’s start with leasing. This is where you use the equipment for a set term. The amount you pay and the term can’t be changed without the written consent of both the owner and the person leasing the items.
- Updated Equipment – Leasing ensures your equipment is always the latest. Each time you lease a new baler, you’re getting the latest the owner has to offer. This will help you maintain efficiency without breaking the bank.
- Predictable Expenses – The expenses will go up over time, but there are almost never any sudden spikes. For companies with tight budgets, leasing can ensure that you don’t have to radically alter your financial plans.
- Pay Nothing Up Front – You only pay when you’ve benefitted from the item. If you don’t have the money now, you don’t have to pause your recycling efforts. Benefit from that commercial trash compactor immediately.
- Keep Up with Competitors – Due to being able to pay nothing up front and get the latest equipment, you’ll be able to compete with competitors who have higher budgets, or those who may even own their machinery outright.
Benefits of Renting
Renting is a set agreement for shorter periods, such as 30 days. The agreement automatically renews at the end of the period. You can end the agreement, but only after the current rental cycle has come to an end.
You’re able to use an industrial trash compactor, for example, but the landlord will still be responsible for its upkeep.
Low-Cost Access to Expensive Equipment – If you can’t afford a state-of-the-art industrial garbage compactor, renting is the one way you can get your hands on it. Compared to the thousands of dollars needed to buy it, you can pay a few hundred every month instead.
- No Maintenance – Under the terms of a rental agreement, the landlord is responsible for any and all maintenance costs.
- Your Choice of Waste or Recycling Provider – The reality is there are numerous landlords offering commercial recycling equipment. You’re spoiled for choice, which naturally drives up quality as people squabble for your business.
- The Best Equipment – There’s no kind of equipment that can’t be obtained under a rental agreement. You’ll find it easier than ever before to keep up with the competition whilst practicing good financial habits.
- Freight and Installation Included – This is another big benefit of a rental agreement. The landlord is responsible for delivering the equipment and setting it up for you.
- 100% Tax Deductible – All that money you spent on renting equipment is actually tax deductible. Under current rules, anything you spent on renting that recycling compactor can be taken off your tax bill at the end of the year. This could translate to thousands of dollars saved.
Benefits of Buying
Buying a piece of recycling equipment outright does come with a number of disadvantages. You’re responsible for everything financially. Unless you have a huge budget, this is most probably not a viable option. On the other hand, there are some benefits to buying.
- Easier than Leasing – Leasing and renting can be quite tricky. Legal agreements are always tough and complex to deal with. Buying your equipment removes all these problems.
- You Control Maintenance – This could either be a good thing or a bad thing. Experienced operators will see this as a major boon. They can decide when to pay for maintenance or when to simply replace the item.
- Tax Deductible – You can get some of the money back on your tax bill. Recycling equipment is tax deductible. Like with renting, this could translate into you gaining thousands of dollars back courtesy of the government.
What Will You Do?
There’s no right or wrong answer here. Examine your budget and your long-term plans. This is not a decision to take lightly.
Compactor Management Company (former Northern California Compactors, Inc.) offers installation and support services for waste recycling equipment such as waste compactors, balers, shredders & conveyor systems. Established in 1981, it offers waste management solutions across the United States.