Hire construction plant when you need it occasionally, for a single job, or for a machine type you rarely use; buy when the same machine would be working most weeks of the year, because at that level owning usually costs less than repeated hire and the machine is there when you need it. To find your break-even point, divide the yearly cost of owning the machine by the weekly cost of hiring it: if you would use it for more weeks than that, buying is likely to pay. This guide from SM Plant Sales in Rugby shows the method with a worked example.
- Break-even weeks = yearly cost of owning divided by weekly cost of hire.
- Owning costs include depreciation, servicing, parts, insurance, security, storage and transport, not just the price.
- Hire moves servicing and breakdowns to the hire company, but the hirer is usually responsible for the machine while it is on hire.
- For many groundworkers and landscapers, a small dumper or mini excavator is the first machine worth owning.
- Buying used is a middle route: lower cost than new, with more checks to do.
What is the rule of thumb for hiring or buying plant?
The rule of thumb is utilisation: the more weeks a year a machine would be working for you, the stronger the case for buying it. A machine you need most weeks is usually cheaper to own; one you need for a few weeks a year is usually cheaper to hire.
Be honest about utilisation. Count the weeks the machine would actually be on a job, not the weeks it might be useful. Then put real numbers on both sides: the hire rates you pay now, and the full cost of owning.
What does owning a machine really cost?
The purchase price is only part of it. Over a year, owning a dumper or mini excavator also costs:
- Depreciation: the value it loses each year you own it.
- Finance or cash: interest on a loan, or the return you give up on cash tied up in the machine.
- Servicing and parts: oils, filters, grease and wear parts at the intervals in the operator’s manual.
- Repairs: unplanned work and the downtime that comes with it.
- Insurance and security: cover for the machine, plus immobilisers, trackers and secure storage. Plant is a target for theft.
- Transport: a trailer and suitable tow vehicle, or a plant lorry.
- Inspections: under PUWER, whoever provides the machine for work must keep it maintained in a safe condition, and an excavator used for lifting needs LOLER thorough examinations.
- Your time: daily checks, greasing, booking services and ordering parts.
What does hire include, and what doesn’t it?
Hire usually includes the machine, its servicing and maintenance, and a replacement or repair if it breaks down through normal use. You pay the hire rate plus delivery and collection, and usually insurance or a damage waiver.
Much UK plant hire is on terms based on the Construction Plant-hire Association (CPA) conditions, which generally make the hirer responsible for the machine while it is on hire. Check whether your insurance covers hired-in plant before the machine arrives. On site, the user is still expected to do daily pre-use checks and report faults.
Hire also gives you flexibility: the right size of machine for each job, no storage, and no machine sitting idle when work is quiet. The cost is availability, as at busy times the machine you want may not be free when you need it.
A worked example (hypothetical figures)
Example only. The figures below are invented round numbers to show the method. They are not prices from SM Plant Sales or anyone else, so put in your own.
Say a small dumper costs £3,000 a year to own (£1,500 depreciation, £600 servicing and parts, £400 insurance and security, £500 transport and storage), and hiring the same size costs £100 a week, including delivery and collection.
| Weeks of use a year | Cost to hire | Cost to own | Cheaper option |
|---|---|---|---|
| 10 | £1,000 | £3,000 | Hire |
| 20 | £2,000 | £3,000 | Hire |
| 30 | £3,000 | £3,000 | Break-even |
| 40 | £4,000 | £3,000 | Buy |
In this example the break-even point is £3,000 divided by £100, which is 30 weeks. Below that, hire wins; above it, owning does. The example leaves out finance costs, tax and your own time, so treat the result as a starting point, and ask your accountant how capital allowances would apply to your business.
How does hiring or buying affect cash flow?
Hire is a running cost that stops when the job stops, which suits uneven workloads. Buying ties up cash or adds a monthly finance payment whether the machine is working or not, but it builds an asset you can sell later. If work is steady and you have the cash or a sensible finance deal, buying can smooth costs; if work comes and goes, hire protects your cash.
Who services the machine?
If you hire, the hire company services and maintains the machine. If you own it, you do, or you pay someone to. That means daily checks, weekly greasing and services at the hour intervals in the operator’s manual, plus a reliable source of parts.
Our site dumper daily checks and servicing guide sets out the routine for a dumper. For repairs and service agreements, see our servicing page, and for parts, Parts by machine lists 224 machines.
When does buying a small dumper or mini excavator pay?
Buying a small dumper or mini excavator tends to pay when you have a steady flow of small jobs that each need one. Signs it is time to buy:
- Your hire bill for the same machine type comes up most weeks.
- Landscaping, driveways, footings or drainage make up most of your work.
- You lose time waiting for hired machines to be delivered or collected.
- You have secure storage and a way to move the machine between jobs.
- Someone on the team will do the daily checks and greasing.
Our guide to choosing a site dumper covers sizes and tip types if a dumper is your first purchase.
Is buying used a good middle route?
Yes, for many first purchases: a used machine costs less than new, much of its depreciation has already happened, and it is often available straight away. The trade-off is more checking before you buy and more risk of repairs after. Read new or used plant: how to choose and our used mini excavator and dumper checklist before you commit.
Buying plant from SM Plant Sales
SM Plant Sales in Rugby supplies new plant, including Volvo EC15E, EC18E and EC60E compact excavators, Mecalac TA3SH and TA9 site dumpers and Slanetrac HT1000 tracked high-tip dumpers. We also keep a small, changing stock of used plant. Call 01788 555377, Monday to Friday, 7:30am to 5pm.
Questions
Is it cheaper to hire or buy a mini digger?
It depends on how many weeks a year it would work. Divide the yearly cost of owning it by the weekly hire cost: if you would use it for more weeks than that, buying is likely to be cheaper.
How many weeks a year makes buying plant worthwhile?
There is no fixed number, because it depends on your hire rates and owning costs. Work out your own break-even point with the formula above, using real quotes and your own running costs.
Who is responsible for servicing hired plant?
The hire company usually services and maintains hired plant, but the user is normally expected to do daily pre-use checks and report faults. Check your hire terms.
Do I need insurance for hired plant?
Usually, yes. Many UK hire agreements make the hirer responsible for the machine while it is on hire, so you need hired-in plant cover or the hire company’s damage waiver. Check the terms before the machine arrives.
Can I buy a small dumper or mini digger from SM Plant Sales?
Yes. SM Plant Sales in Rugby sells new Volvo compact excavators, Mecalac site dumpers and Slanetrac tracked dumpers, plus a small, changing stock of used plant. More answers are on our FAQ page.