If you are in charge of getting equipment for an oil field, you have to make a pretty big decision. You are tasked with determining whether to rent oil field equipment or whether to buy the equipment. There are pros and cons to both renting and buying oil field equipment. Learning about them and weighing it will help you decide which is best for your operation. Here are a couple of the pros and cons of renting oil field equipment:
Cons of Using Oil Field Rental Equipment
One of the downsides to renting oil field equipment is that it may cost you more in the long run than if you were to purchase the equipment outright. There are many tax write offs for equipment that is used in the course of business. You lose out on these write-offs and have to rent the equipment while gaining no equity in the item. If you need the piece of machinery for a short period of time, it may be worth it to rent. But if you need it for a long time, always weigh the rental costs with the cost of buying the item outright.
The other disadvantage to renting oil field equipment is that the item you need may not always be available for rent. If you need a specific compressor, and a renter is out of stock, you may have to wait days or weeks for another company to return the item. This can put your production at a standstill and leave your crew standing around with nothing to do.
Pros of Using Oil Field Rental Equipment
One of the biggest advantages to renting oil field equipment is that it requires less of an initial investment. When you buy a piece of oil field equipment, you either have to put a large deposit down and finance it or buy it outright. If money is tight with your business, you may not have the finances or the business credit to purchase an expensive piece of machinery. Renting it allows you to get what you need in order to keep your business operational.
The other benefit to oil field rental equipment is that you are not responsible for maintaining the equipment. Think of it like a rental car. You do not change the oil or repair the car if the engine or transmission goes out. The same is true for oil field rental equipment. The rental company is responsible for maintaining and repairing the equipment, both of which can be pricey and time-consuming.
There are many different pieces of oil field equipment that you may need to complete your job, including forklifts, fuel tank, ground heater, light towers, pumps, generators, compressors, man lifts, tubing, separators, water systems and sewer systems. Whether you need a piece of equipment for a couple weeks or a couple years, oil field rental may be ideal for you. Evaluating the pros and cons will help you decide if it is.
My 8-year old son absolutely loves everything about heavy construction equipment. As a school project, he was assigned to create a blog that includes as much information about heavy construction equipment as he could "dig up". We had such a great time working together that we decided to continue working on the blog to fill it with even more information about all sorts of heavy construction equipment. We have answered many questions about these machines and have provided a lot of useful information about how they run, what they can do and so much more about all of the different machines used in construction.