Equipment Buy vs. Rent Calculator — Marawood Construction Accounting

Equipment Usage

Annual Usage Hours?How many hours per year you expect to use this equipment on jobs. Be realistic — idle time doesn't offset ownership costs.

hrs/yr

Analysis Period?How many years to compare ownership vs. rental costs. Typically 5–7 years for heavy equipment.

years

Hours per Rental Day?How many productive hours you get from each day of rental. Used to convert daily rental rates to an hourly equivalent.

hrs/day

Ownership Costs

Purchase & Financing

Purchase Price

Down Payment

Interest Rate?Annual interest rate on the equipment loan. Enter 0 if purchasing cash.

Salvage Value?Estimated resale or trade-in value at the end of the analysis period.

Annual Operating Costs

Maintenance & Repairs?Annual average for servicing and repairs. Typically 2–5% of purchase price per year for heavy equipment.

Equipment Insurance?Annual insurance premium specific to this piece of equipment.

Fuel / Energy (Annual)?Annual fuel cost when operating. Note: fuel is a direct operating cost whether you own or rent — enter it here for the true ownership picture.

Rental Costs

Rental Rate & Terms

Rate Period

Daily Rental Rate?The rental company's day rate for this equipment, excluding delivery and fuel.

Delivery / Pickup Cost?Per-rental cost for delivery and pickup. Include both directions if charged separately.

Separate Rentals per Year?How many times per year you rent and return this equipment. Each rental triggers a delivery charge.

rentals/yr

Fuel / Energy (Annual)?Annual fuel or energy cost when operating this rented equipment. Fuel is your cost regardless of whether you own or rent — enter it here to compare true total costs.

Ownership — Cost Breakdown

Loan amount—

Monthly payment—

Total financing cost—

Annual operating costs—

Total cost of ownership—

Less: salvage value—

Net ownership cost—

Total hours over period—

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True Cost to Own — Per Hour

Rental — Cost Breakdown

Effective hourly rate—

Annual rental cost—

Annual delivery cost—

Annual fuel / energy—

Annual rental total—

Total rental cost (all years)—

Total hours over period—

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True Cost to Rent — Per Hour

The Verdict

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Cost Difference

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per hour

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Breakeven Analysis

Breakeven Hours/Year?Annual usage hours at which owning and renting cost the same per hour. Above this — buying wins. Below — renting wins.

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hrs/year to break even

Your Annual Usage

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hrs/year actual

Gap to Breakeven

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Buy vs. Rent — Breakeven Chart

Cost to Own

Cost to Rent

Your Usage

Equipment Rate for Job Costing & Estimating

Set Your Estimating Rate — Based on True Ownership Cost

Base Rates On

Using true ownership cost as the floor — the right choice when you own the equipment.

Target Profit Margin on Equipment?The margin you want to earn on equipment time billed to jobs. This is applied on top of the true ownership cost to arrive at your target billable rate.

20%

Minimum Acceptable Margin?The lowest margin you'd accept on equipment time — your break-even plus a small buffer. Useful for competitive bids where you need to know your floor.

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True Cost Floor?The actual hourly cost of owning and operating this equipment — your absolute minimum. Billing below this means you're losing money on every hour.

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per hour — cost only

Minimum Billable Rate?Your cost floor plus your minimum acceptable margin. Use this on very competitive bids where you need to know how low you can go.

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per hour — minimum bid

Target Estimating Rate?Your recommended rate to use in estimates. This is what you should plug into your job costing system and estimating software for this piece of equipment.

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per hour — use in estimates