Should You Buy or Rent Welding Equipment?
To determine if your operation should rent or buy welding equipment, learn more about these key equipment and financial factors.
Welding equipment costs
For many contractors and construction companies, renting welding equipment makes sense — whether they rent exclusively or to augment their existing fleet. Equipment rental continues to become more common in construction and fabrication due to a variety of factors.
As contractors weigh their available capital against equipment needs to determine which path is right for them, there are several key tipping points in the rent vs. buy discussion. Below is additional information about some of the important things to consider, including equipment utilization, amount of equipment needed, job technology requirements and financial considerations.
Equipment utilization and needs
How often you use welding equipment and how much welding equipment you need for any given job are two important factors that go hand in hand.
Is your equipment used monthly, weekly, daily, several times a day, or all day every day? Is having the right equipment immediately available critical for your project? For example, would you be unable to perform a field repair without a welder or generator available, thus disrupting the schedule? If you have very high equipment utilization, then buying the equipment may be the better option. Conversely, if utilization is low — meaning that once a task is complete, you no longer need the equipment — then renting may be the right choice.
Many companies have core products within their owned fleet that are used daily. They often supplement their fleet with rental equipment for a specific project or jobsite need. This is especially common if work is relatively transient and jobs are long distances apart. Often, it’s easier to rent equipment in different cities than it is to coordinate logistics to move everything from job to job.
Owning a fleet of 200 welders requires maintaining, repairing and transporting them to the jobsite when necessary. In comparison, renting can offer flexibility and convenience — the contractor isn’t responsible for maintaining, repairing or transporting those machines. Rental is a popular option for portable solutions, including engine-driven welder/generators and rack systems.
How many welding power sources you need to complete a job is another part of the equation when deciding whether your company should rent additional machines to supplement equipment already owned. For example, building a power plant or working on a scheduled plant shutdown may easily require 100 to 300 welding arcs. To meet this sudden increase in demand, contractors may prefer to rent rather than incur capital expenses to purchase a larger fleet of equipment.
No matter if you rent or buy, when your operation needs large quantities of welders, running single inverter machines or inverter racks with an engine-driven welder/generator enables multiple operators to work from a single inverter rack or engine-driven welder — reducing costs and jobsite congestion. Using diesel engine-driven welders can help contractors standardize fuel for their jobsite.
Using racks of plug-in welding power sources is also beneficial on jobsites where work is confined to a smaller area. A four- or six-arc rack of inverter welding power sources using a single power cord from a generator or power outlet lowers installation costs — as well as jobsite noise — compared to using four or more individual engine-driven welders.
It’s also important to think about the type of welding technology needed to get the job done efficiently. Don’t limit your capabilities by owning or renting equipment that doesn’t help you optimize productivity.
If you only need an engine drive with stick or carbon arc gouging output, you’ll have no problem renting the right equipment. However, if you routinely require equipment with more specialized needs — such as a premium multiprocess arc, lightweight portability or strong generator power — it may make better sense to purchase it so it will be available when you need it.
Leading rental houses and welding supply distributors recognize the need to offer the latest welding technology to help their customers work more efficiently. There is a wide variety of welding equipment available to rent. Most rental houses will carry TIG, MIG, multiprocess and engine-driven welders as well as cutting equipment.
Welding technology continues to evolve quickly, so renting can be a good way to try the most recent advancements. For example, ArcReach® technology from Miller Electric Mfg. LLC is available in many engine-driven welder/generators as well as XMT® 350 FieldPro™ inverter welders. With this technology, welders can adjust welding processes and parameters right at the spot of the weld using the wire feeder or remote — eliminating the need to walk back to the power source to make adjustments. This saves significant time and money on the jobsite.
Working with an up-to-date rental house or welding supply distributor allows you to gain experience with new equipment before buying it, and to make head-to-head comparisons before purchase. Leasing is another option offered by some rental companies that can help you stay in step with new technologies and equipment.
Industry trends may also dictate equipment needs. As more experienced welders retire, less experienced welders are entering the workforce, and these welders often have been exposed to new technology in schools and training centers. As a result, you may need access to new technology to meet the demands of a more tech-savvy generation.
Many contractors see and compare the purchase or rental price but overlook the total cost of equipment management. For example, if a Chicago-based company successfully bids on a job in St. Louis, they now have to think about the logistical management and associated cost of transporting welding equipment 300 miles.
If a company excels at fleet management — or has a dedicated department or division to handle this — then purchasing welding equipment can pay off. If you decide to rent, the cost of renting is often treated as a job cost and can be charge directly to the project.
The financial factors that play into the total cost of equipment management include:
- Utilization rate
- Capital expense
- Safety incident costs
- Interest rate (if financing a purchase or lease)
- Tax incentives for purchasing
- Depreciation of owned equipment
- Rental rate
- Maintenance costs (parts and labor)
- Transportation and storage costs
Monthly rental costs for welding equipment can range from $100 to $5,000, depending on the type of equipment needed. Purchasing costs also vary depending on the equipment needed.
Renting can allow companies to be more agile as job needs change and equipment demand increases or decreases. But one possible downside is that you don’t own the equipment as an asset with value.
Deciding to rent or buy
With building pressure to increase productivity and efficiency, contractors constantly analyze what it takes to set themselves apart from the competition. This drive to improve productivity is especially important as many companies deal with a skilled labor shortage.
Before making the next bid, take a closer look at equipment costs and needs, along with the new welding technologies that are available to help you complete jobs more efficiently.