Leasing vs. buying a small excavator, how can Canadian leasing companies make a wise choice?

As the Canadian engineering construction and municipal construction market continues to grow, many leasing companies have begun to pay attention to high-frequency equipment such as small excavators and skid loaders. Among them, the 665 and 670 models of equipment under the Rippa brand have become popular choices in the Canadian leasing market with their stable performance and moderate prices. However, when purchasing equipment, many leasing companies often fall into the dilemma of “is it better to lease or buy more cost-effective”. Today, we will discuss leasing vs. buying a small excavator from the aspects of cost, income, and equipment value to help Canadian leasing companies make more long-term decisions.

1. Cost comparison: short-term leasing saves money, long-term purchase is more cost-effective
Many Canadian leasing companies consider leasing equipment in the early stage because the leasing model has low investment costs and can meet project needs in a short time. However, in the long run, purchasing equipment is the real way to “save money”. Taking the Rippa R15 small excavator as an example, if the daily rental is calculated at 300 Canadian dollars, if the equipment is rented for 120 days in a year, the rental cost is as high as 36,000 Canadian dollars. Directly purchasing the same type of equipment costs less than 40,000 Canadian dollars, and the depreciation cycle can be as long as more than 5 years, with an average annual cost of less than 10,000 Canadian dollars. At the same time, once the equipment becomes a fixed asset of the company, it can not only be depreciated and tax-deducted, but also sold at a higher second-hand price after the depreciation period expires, further reducing the overall investment.

2. Benefit comparison: Owning equipment, self-control of benefits
Although the leasing model can meet temporary needs, uncontrollable factors such as equipment deployment time and leasing price often lead to project delays or profit shrinkage. On the contrary, after purchasing equipment, leasing companies can flexibly adjust the rental price according to market conditions and independently control the benefits. For example, the Rippa 670 skid steer loader is in great demand for winter snow operations in Canada. Leasing companies that own equipment can increase rents according to peak season demand to maximize profits. At the same time, owned equipment can also reflect the company’s brand strength and attract more long-term customers.

3. Equipment value: Rippa small excavator and skid, durability helps asset preservation
The Canadian market environment is complex, and equipment durability is the focus of leasing companies. Models such as Rippa 665 and 670, with their powerful power and high-quality hydraulic systems, can adapt to a variety of operating environments such as snow, earthwork, and municipal administration, with a service life of up to 5-8 years. After purchasing, the leasing company can not only obtain stable income from long-term leasing, but also sell the second-hand equipment in good condition after the depreciation period of the equipment expires, further improving the residual value return of the equipment.

IV. Success Case: Purchasing Equipment to Help Leasing Companies Grow Their Business
Take a leasing company in Alberta, Canada as an example. In 2023, it purchased 6 Rippa 665 small excavators at one time, and it paid back in just 8 months. Due to the stable performance of the equipment, the company has obtained orders for long-term cooperation projects. At present, the equipment rental rate has been maintained at more than 95% for a long time, and the company’s overall revenue has increased by more than 30%.

For Canadian leasing companies, purchasing high-quality small excavators and skid loaders such as Rippa 665 and 670 can not only reduce long-term costs, but also achieve independent income and asset preservation. Compared with short-term leasing, purchasing equipment is undoubtedly a wiser and more promising choice. Rippa, as a leading brand in China’s construction machinery industry, is committed to providing Canadian customers with high-performance, cost-effective equipment, helping rental companies to steadily expand their business and achieve profitable growth. Welcome to consult and cooperate for a win-win future!