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Rent or own loader?

Discussion in 'Heavy Equipment' started by StuveCorp, Jan 15, 2006.

  1. StuveCorp

    StuveCorp Senior Member
    Messages: 341

    I am wondering what others do when it comes to plowing with loaders? We have a 721 but need a another loader to plow (we plow a 13 acre lot), have tried to set up a winter rental and everyone in this area has discontinued the programs. Does everyone own all their equipment, rent or just sub out? I have approached other contractors that have loaders sitting but have been told that it's too hard on the machines to run in the winter. Any tips?
  2. drmiller100

    drmiller100 Senior Member
    from idaho
    Messages: 119

    rumor up here is that louisiana has all the extra loaders sucked into the hurricane clean up, so no one wants to lease one for snow removal.

    in the past a lot of guys leased tehm for 3 months in the winter. skid steers can be leased, but a skid makes a lot more sense to buy then lease.
  3. Dwan

    Dwan Senior Member
    Messages: 879

    I own 3 skid steers each with 3 yd buckets and wet lease a Cat IT28 for winter.
    The cat is nice for running between jobs because it does not require a trailer and truck. I can load a 12 yd truck faster with the Bobcats then the loader. I have made a deal with the owner to pay him $50 per hour off the hour meeter. This year his loader has not moved yet. nether has my bobcats as there has been no snow.

    Look at last years income? does the profit made from the loader only add up to what it would cost to make payments for 1 year? if it does then it may be worth it to own it. Remember to include cost of insurance, maintenance, operator wage, oil, tires, grease, filters in the figures for determining weather it is cost effective to own your own.
  4. SD-Dave

    SD-Dave Senior Member
    from Vermont
    Messages: 237

    I plow commercially for properties that I own myself...so the plowing is not for profit but to keep the businesses that operate on them open. That being said I used own an older Cat 2yd loader...it did the job but the comfort level was pretty poor. Eventually maintenance cost forced the decision to liquidate it...cold weather starting was also pretty poor.

    For three years after selling it I leased a loader...I quickly found out after one snow storm the first season that it was not possible just to do the job with trucks. So renting a loader became the option that I thought was best.

    The dealers around here lease 2-3yd loaders but they charged and arm and leg :( about $2000/month and realistically being as far north as I am you need it from Dec 1st till April 1st...you do the math WOW that is some big cash with nothing to show for it.

    After a much over do talk with my accountant...he made it quite clear that "I would be the village idiot" if I did not buy a loader instead of make those kind of payments.

    So between the immediate write-off and the residual depreciation and with equipment holding its value much better and having a much longer life span (particularly with the small hours mine will get) than trucks etc it really was a smart decision. The capper to the deal was John Deere offering very low rate financing...the payments yearly are better than what I would pay in seasonal rent and hey at the end I own it!! :)

    The last great thing is...it is my machine.... its equipped right. I am comfortable operating it do to familiarity of knowing it very well... I don't stress about having someone else's machine etc. Additionally its always around (year round)when I need it....I would deem it extravagant excepting for the good $$$ sense my accountant say it is...bottom line I am really happy having a great new machine.

    Judge your own situation but for me...it became and easy $$$ and common sense decision with some great side benefits.


    PS. oh yeah I forgot when you rent you take what they have available...I was able to order a machine that kicks ass over a standard loader with much more versatility and even a lower price...can't be that!!
  5. StuveCorp

    StuveCorp Senior Member
    Messages: 341

    Thanks for the replies. That is way we bought the 721, our contract officially starts in Nov. 1 to the end of April so to rent a loader for six months at winter rates ($2000 x 6 = 12,000) we figured might as well own it. We run a 11' angle plow with wings so for us to find a machine that had aux. hyd. also is about impossible. One year we had no snow to plow so the loader and skid could handle it but with the construction at the plant and they have hired alot more people so alot more cars to plow around. We ran a rental 906 for two years and worked out okay but when it snows hard or at the shift change times we can't keep up. This year I got a 14' pusher to put on a 521/621 that we would rent from Dec.-Mar. but the dealer kept telling me machines are coming in later, next week. The hard thing is we don't use our 721 that much in the summer but to live with two loaders payments, insurance, and maintenance would drag down the income. We also tried finding machines that other contractors have sitting but they wanted more than winter rates or no in general. Others must have this problem too?