Discovering a suitable pre-owned skid steer could lead you anywhere along the price spectrum of $10,000 to $40,000.

Around the $15,000 mark, you'd likely encounter models that are approximately a decade old, whereas at the higher end of the range, you'd be more inclined to find relatively newer equipment.

When individuals inquire about leasing construction equipment, they often refer to what is essentially renting construction equipment.

The distinction between renting and leasing equipment is analogous to that of a car:

•     Renting equipment typically involves very short-term agreements, spanning days, weeks, or months.
•     Leasing equipment resembles the car leasing process: you essentially take possession of the equipment but with lower payments compared to a full purchase, and after a few years, you have the option to return the equipment or retain it for a "residual."

Skid Steer: Rent, Buy, or Lease - Which Option Suits You Best?

The optimal choice depends on your specific needs. If you require the equipment for short periods and infrequently, renting might be the wise decision. However, this approach is only advisable when your usage is minimal.

According to ubtrueblue.com, renting can become costly, much like car rentals. For instance, a used skid steer that you could purchase for approximately $25,000 might demand a monthly rental fee of $2,700 or a weekly fee of $1,000.

Repeated monthly rentals could quickly add up to the cost of buying the skid steer outright.

If you anticipate regular and substantial usage of the skid steer, you have four alternatives that outperform renting:

•     Purchase the skid steer with available funds.
•     Secure a bank loan to finance your skid steer acquisition.
•     Opt for a lease agreement for the skid steer.
•     Consider an equipment loan specifically tailored for acquiring the skid steer.

Acquire a Skid Steer: Assessing Your Options

1. Pay with Cash

While this method offers certain advantages, it may not be feasible for many individuals as they might not have readily available cash, or they may be hesitant to deplete their working capital. Nevertheless, if you do possess the necessary funds, here are the pros and cons:

Benefits of Paying Cash

•     Avoid dealing with paperwork and intrusive loan evaluations.
•     Save on finance charges, which can be substantial for those with poor credit but less significant for those with good credit.

Drawbacks of Paying Cash

•     You'll lose access to that cash for other potential uses.
•     Purchasing with after-tax dollars means you need to earn more money (e.g., $75,000 for $50,000 cash in a 33% tax bracket).
•     Less tax-friendly compared to leasing.

2. Borrow from the Bank for Your Skid Steer

If cash isn't readily available, securing a bank loan is a viable and cost-effective option. However, this route comes with its own set of considerations:

Pros of Bank Lending

•     It is the most economical way to obtain the necessary funds.

Drawbacks of Bank Lending

•     Loan approval may take several weeks, and banks often reject a significant number of applications (around 85%).
•     You'll need to provide detailed financial records and various documents.