Purchasing equipment and machinery can be one of the largest expenses for those in the agriculture industry. We hear from our customers that they often only need the extra equipment during the harvest season while other customers prefer to purchase the equipment. There is no right or wrong answer, but only what’s right for you and your unique circumstances. Here are a few guidelines to use in helping to make your decision:
1. Cash priorities. Paying for equipment, especially equipment that you only need for only a portion of the year, may lead you to consider renting equipment. Renting allows for you to keep more cash in reserves.
2. You don’t want to deal with maintenance and repairs. One of the benefits of renting is that you don’t need to plan for expected and unexpected maintenance on the equipment.
3. Tax implications. Speak with your accountant (we are not tax experts and this is not financial advice) about any incentives or reasons why purchasing may be right for you this year. Depreciation of farm equipment may allow you to deduct a certain amount from your taxes.
4. Technology. If you like always having the latest and greatest when it comes to features and technology, renting can be a great option. It can also mean reducing your harvest time if you’re replacing an outdated piece of equipment with something new and more efficient.
5. How much you plan to use the equipment. Large farmers may see fewer advantages to renting, but those recently increasing in size may see renting additional equipment as a sound choice. The more you understand your utilization rate with equipment, the clearer the decision will be on whether to rent or purchase.
Spend some time considering all of your farming equipment needs and clearly understanding the pros and cons of both renting and purchasing. Interested in learning more about purchasing or renting farm equipment and the options available? Contact us at Transwest Trailers at 888-432-8875 or visit us at TranswestTrailers.com to see available inventory and dealership locations.
*This advice is not intended to serve as financial advice. Please consult your accountant, tax attorney, or other financial professional to decide which options are best for you.