Rental vs. Purchase
Managing equipment from cradle to grave takes a huge amount of skill and expertise.
Winter rentals
Municipal hire is something which has proven challenging for many rental companies over the past ten years.
Managing equipment from cradle to grave takes a huge amount of skill and expertise. Offering a rental option allows customers to test the innovative and proven Bucher products for a season before considering a purchase.
Find out the in-depth arguments for and against rentals vs purchasing.
Winter Equipment: Rental vs. purchase
Municipal hire is something which has proven challenging for many rental companies over the past ten years and managing equipment from cradle to grave takes a huge amount of skill and expertise.
Buying the correct equipment to particular specifications, maximizing uptime of the vehicle, then eventually disposing of or selling the asset at the end of use is more than enough to handle, never mind actually having to make money along the way to stay in business. With rates remaining very competitive in the market it’s no surprise that several of the larger historical names in municipal hire are no longer around.
Salt spreaders and winter maintenance products are particularly difficult to support. 24-hour breakdown cover 7 days a week is required over the winter season (including Christmas day and New Years Day). De-winterisation and protection of the equipment combined with appropriate storage makes the sector unattractive for the independent rental companies but the demand still remains from the customer.
Rental will always have a place within the Winter business, due to the limited timeframe that this equipment is needed, not all users will have the space or capacity to store the units over the warmer months or have the time to keep up with the maintenance required by the specialised vehicles. In response to this demand, Bucher Municipal have started to offer seasonal rentals and we have registered on YPO and TPPL frameworks for long term rentals.
Historically a sweeper/spreader demount system has not been a popular choice in the UK. But, due to the latest technological developments, increases in fuel duty and inflationary increases in chassis, the sweeper spreader could be a consideration for councils to add to their growing list of multipurpose vehicles.
Fleet availability
Many fleet departments don’t have the time or resources to maintain winter fleets over the summer and with limited manpower, many consider de-winterisation to be slightly less important than repairing and servicing RCVs and passenger transport. The need to prioritise some vehicles over others is an unfortunate necessity, Councils would face more public complaints for not collecting a row of bins or for leaving passengers stranded than if one gritter didn’t get a de-winterisation over the summer. As there are only a finite number of engineer hours available, in times when the workshops are faced with multiple VOR (vehicle off road) jobs such as painting spreader bodies, many may get delayed for weeks or even months. However poor summer maintenance can lead to increased breakdowns and higher repair costs when winter comes back around. With a rental, the rental company takes the responsibility to maintain the equipment to a high standard and a summer overhaul is conducted as part of the rental.
Spreaders must be ready to go out at a moment’s notice, therefore any breakdown needs be responded to and dealt with immediately. Most duty cycles are started outside of ‘normal’ working hours so breakdown cover can prove difficult to support and expensive for a local authority - especially authorities with less than 5 spreaders. However, if rented, breakdowns are covered by the rental provider; call outs can be responded to within 30 minutes from the chassis supplier and within an hour from the Bucher network (with telephone support being available instantly). All the engineers are trained experts in spreaders so first-time fix rates are over 75%, and if the spreader can’t be fixed within a reasonable time a replacement machine will be provided.
Whole life cost
Rental rates are as competitive today as they have ever been, and with government funding at its lowest levels for a long time, rentals are an appealing option.
After fuel costs, maintenance costs are the biggest expense to owning a municipal machine. One of the biggest benefits of renting is the elimination of these unplanned costs. Maintenance costs are fixed with a rental, so even if a major component fails owing to fair wear and tear, the rental rates stay the same.
However, consideration must be taken when thinking of the end of life residual value. Bucher Municipal machines have a higher end of life residual value than many competitors on the market. When renting, the rental company owns the machine and therefore benefits from the reselling. This cost must be weighed up against how much is saved against maintenance time, breakdowns costs and storage over summer months. Will you get a large enough pay out at the end to cover these charges? New Bucher Municipal equipment is often priced lower than the council could buy it for, therefore the funding charge tends to be less, even with a higher finance rate. Even with the low funding rates it’s worth asking for a cost comparison to demonstrate how competitive a rental could be.
Controllability
Although having purchased equipment, most councils will then fund the asset through a lease company via a separate tender. With the time scales involved, this could extend the operational life of the spreader for up to a year before the funding starts. A compact spreader with a life expectancy of, say, five years could still have up to a year to go on a lease before it can be returned or replaced. At five years the spreader may be uneconomic to keep repairing but the council may have no choice but to keep completing expensive repairs until the lease expires. On the other hand, the lease companies have specific deadlines for the end of the contract, and few will offer to extend the lease on a month by month basis, instead requesting an extension for up to a year. Rentals are much easier to manage - the start date is set, and a minimum term is agreed.
This can be anything between one and ten years. If the contract goes over by a few months, rental companies can be much more flexible, offering the customer extensions if required on a short-term hire basis.
Flexibility
What happens when things change? Well, every single council has had their share of changes over the past ten years. With leased assets or purchased equipment, change is difficult and can be costly. With rentals it is sometimes possible to change equipment as requirements change - standard spreaders could be taken back or exchanged for a much lower fee than lease companies may charge.
Review meetings
Many manufacturers are focused on sales; once the sale is completed and the spreader has been delivered the salesperson moves on to the next opportunity. Rental businesses are again different; regular review meetings are established at the start of the contract and adhered to, service performance is discussed and out of contract costs are reviewed. These rental companies will work with you to help reduce vehicle damage and work with the manufacturer to improve the product, whereas the manufacturer may never find out about repeat damage issues or failures.
Bucher fully understand that the municipal market is under pressure to save costs and believe that rental offers genuine savings, flexibility, and higher productivity. If you want to know more about rentals please feel free to contact one of our sales team.
Nationwide support network
Our extensive nationwide support network comprises of 6 strategically located service depots and 24-hour a day,7 day a week call out. This support has given the confidence to customers that Bucher can support a winter fleet anywhere in the UK at any time.
The Bucher Municipal Electra spreader has been in high demand due to the interest from councils about the benefits of a hybrid electric spreader mounted on a Euro 6 chassis. The interest in demonstrations and testing for the vehicle is at an all-time high, with councils requesting trials to prove the fuel savings claimed by not engaging the PTO and confirmation the performance is maintained. Those who have rented the Electra spreader have been reassured by the performance and reliability of the combination with regular feedback being positive across the board.
Although our rental fleet is relatively small in comparison to the largest rental provider, it has offered customers an alternative in the way of technology and a wider range of plough options which are very difficult to test on a short-term demonstration.
The feedback received on the ploughs has been exceptional, with some users stating when the plough was mounted and clearing snow, it transformed the performance of the unit - making the job much easier than other spreader/plough combinations.
The Universal or Unix plough has also created a huge amount of interest, especially in areas with single track roads and narrow streets. The versatility of having a plough that can change from a standard shape to a V configuration allows the operator to see over the plough for safer operations, keeps the plough within the width of the truck, and reduces the risk of damaging other vehicles, walls or lighting.
If you want to try an Electra Spreader, Universal (Unix) Plough or the standard Bucher Hydraulic spreader, get in contact to book your rental today while units are still available.