Renting Small Farm Machinery
Is renting small farm machinery a good idea? Many farmers are finding that it is more than just a good idea, it is a way to cut costs and insure a more profitable season.
Renting Small Farm Machinery
Many farmers are turning to renting small farm machinery rather than investing in new or used equipment. They are signing machinery lease deals that are helping to cut costs in many different areas and helping to insure profitability in times when profit margins are shrinking more and more. Why does renting small farm machinery save money in the long run? This comes as a surprise to many people who are conditioned to believe that buying is always less expensive than renting.
The first big reason why renting small farm machinery is so inviting to the farmer is the fact that many types of machinery are not needed year round. This seasonal type of machinery must be stored and maintained during periods when it is not needed. When the equipment is rented, the rental agreement is limited to the time that the machinery is actually needed. When its work is done, it is returned to the rental company eliminating storage and maintenance costs.
There are other reasons that money can be saved by leasing equipment and not buying it outright. One major factor is the worry of equipment failure at crucial times. When the equipment is leased, the rental company is responsible for repair or replacement in the event of equipment failure. This can be not only save money on the costs of repairs, but also could be very critical during important periods such as planting and harvesting when downtime can be devastating.
Since you are not making an equity investment, the money saved on the purchase price can be utilized for other pressing expenses around the farm and is not tied up in equipment. The cost of the equipment is paid as the equipment is used. This can be a very important benefit in farms with high operating costs and low cash flow. There is also no need to carry insurance and equipment resale worry and expected lifespan of equipment all become problems of the rental company and not the farmer.
There are many reasons why renting of small farm machinery can be a wise choice for the farmer. It should at least be considered and price comparisons made before final machinery decisions are made. When these comparisons are made, be sure to look for all the hidden savings that are possible when renting is the choice. Sometimes these things do not appear readily when just price is considered.