Recently, the rental market for oilfield equipment has grown hugely. This is because oil drilling is booming, and the United States is a huge consumer of the product. As our country attempts to become more independent with our oil consumption, the need for domestic oil drilling will increase.
If you work in the oil industry, then you might know how much oil equipment can cost. Pumps, trucks, mixers, and other assets are extremely expensive, and that is why here are many reasons that Oilfield Equipment Rentals are the best choice for your business.
Renting vs. Purchasing
When deciding if you will rent or purchase your oilfield equipment, you will be making a large decision. Oilfield equipment is typically the largest investment your company can make. This is why you need to determine what will benefit you the most. There are many benefits to both options, but typically renting will always be a lower cost than purchasing.
Disadvantages to Purchasing
- Very large financial investment.
- Price increases if you want to use the latest models.
- You will be responsible for all maintenance and repairs rather than have a rental company take care of it.
Advantages to Purchasing
- You own it.
- It becomes an asset.
- You have the equipment whenever you need it.
- You can get a return on your investment by selling it.
Disadvantages to Renting
- After using equipment for a long time, you will have put in a lot of money with no equity.
- You may not be able to use a piece of equipment if it is already being used.
Advantages to Renting
- Costs much less than purchasing equipment.
- Renting allows you to have the latest and most updated models available at all times.
- Makes you dependable for completing jobs quickly and efficiently.
- You do not need to provide any maintenance
- Rental provider will pay for all maintenance which saves you money on unplanned expenses.
- Rental providers can deliver the equipment you need to the work site where you will use it.
Factors to Consider
Regardless of the industry you work in, when looking for new equipment, you will need to decide if you should purchase or rent. There are many factors to take into account when deciding this, but cost-effectiveness and maintenance are the most important.
Consider the Cost-Effectiveness
Will the equipment be worth the purchase in a few years? Will it be considered outdated? Since oilfield equipment is incredibly expensive, you may not have the funds to purchase it. Rather than going into debt to secure the equipment, it may be a better choice financially to rent. Consult with a financial advisor if you are even considering purchasing over renting.
Essentially, with maintenance you will have two options, pay for the maintenance, or do it yourself. Being able to perform repairs is crucial to the success of your equipment. This means if you purchase your equipment you may need to have an in-house repair team in order to afford it. This will be expensive, but is almost necessary when owning oilfield equipment.