When Is It Time To Replace A Piece Of Equipment?

Equipment costs and maintenance can be significant expenses for construction companies despite the strength and durability of heavy machinery. Over time heavy equipment can start to fail or become obsolete. 

It is important to understand the signs for when it is time to replace equipment and the opportunities to replace equipment. 

The signs it is time to replace equipment

Are the costs worth fixing it? 

A piece of heavy machinery equipment maintenance costs will vary depending on the type of equipment and its requirements over the duration of the lifetime. There are three types of equipment repairs and maintenance that should be taken into consideration:

1. Repairs: Repair maintenance is the replacement of parts or pieces of equipment that malfunction over time. Without these repairs, the equipment will not properly run. 

2. Preventive maintenance (PM): PM is the scheduled maintenance that should be done to keep the equipment running at full capacity. This can include oil changes, hydraulic fluid, fuel filters, air filters, and other maintenance. 

3. Condition-based maintenance (CBM): CBM is when an employee notices issues through the PM routines. 

Based on the type of equipment and its market value, it is worth continuing the cycle of repairs, maintaining PMs, and then repairing again.

The cost of downtime

In the construction industry, to ensure more projects are able to be completed for the busy and slow seasons, is it time to search the market for a newer piece of equipment? If this equipment is causing downtime, this is causing a slow down in cash flow and higher collateral costs. 

Research shows that construction companies should estimate what it could cost for downtime with this formula “1 hour of downtime costs me X dollars.” For example, one fleet vehicle down can cost $448 -$760 per day per vehicle. 

How long would it take to repair versus replace it? 

If the machine is broken, outdated, low-quality, or no longer supported by the manufacturer, it is time to consider replacing the heavy machinery. 

Another reason to consider replacing this machine is the cost of labor or the number of repairs that are needed on this piece of equipment.

What are your options when it comes to replacing equipment? 

When equipment becomes damaged, obsolete, or worn down, it is important to start exploring different opportunities from heavy equipment leasing companies like Equify Financial. Here are two great options depending on the equipment and its specifications. 

Equipment financing 

When heavy equipment leasing companies speak about equipment financing, this deals with the ability to lease or finance new or used equipment or spread the costs over a series of payments. The benefit of leasing or financing equipment is to continue to bring in cash flow while ensuring that the necessary equipment to finish the project is in place. 

Revolver loan 

A revolver loan provides construction companies the capability to take out a line of credit to invest in new and used equipment to continue their operations. This loan helps to get projects back up and running with machines getting out of downtime and continued maintenance and repairs. 

These options both provide a construction company the ability to get their operations back up and running quickly without the need to worry about how to get started with these options. 

Contact Equify Financial 

When it is time to update your equipment or find better business solutions, contact our team today. We look forward to helping you grow!