As construction continues to grow, so does the rentals industry. In 2013 a Wells Fargo survey found that 50 percent of construction equipment distributors anticipated growing their rentals fleet. While the right piece of rental equipment can be a real time saver, sometimes it’s better to buy than rent. Work through these four steps when considering your next rental to decide whether it’s better in the long run to rent or buy.

Will you use the machine regularly or is it for a special job? If you need a piece of equipment for one job, renting often makes the most financial sense. Paying full retail price for something that will sit in the shop is not a good use of business funds. However, if you anticipate using the equipment on a regular basis, it’s a better use of funds to purchase the item. As you use it over time, you’ll recoup the price paid and begin to save over what you would have paid by renting it each time.

Are you thinking of buying this machine? There’s no getting around the fact that large equipment are expensive to purchase. If you need for something like a scissor lift, you can use a rental agreement as a way to test drive different makes and models. Even though you know you need to buy one, it can make sense to rent a scissor lift from a provider like Sunbelt Rentals to see whether that size or make works for you. If you enjoy it, you can then purchase one secure with the knowledge that you bought the right equipment for you.

Will the piece of equipment remain valuable? If you’re considering whether to buy or rent something slightly unusual, ask yourself whether the piece will continue to have value down the road. If there are several newer, more high-tech alternatives to the piece you’re considering, the older model can end up outdated sooner rather than later. If you suspect this is the case, renting tends to be better than buying because you aren’t sinking capital into something that will depreciate rapidly.

Are you taking all variables into account? When finalizing your decision whether to rent versus buy that construction tool, there are several hidden costs you should recognize. Calculate the rental price per day, rental time frame and any other fees associated with the rental. If possible, estimate the rental fee per year by gauging how many times you anticipate renting the tool. Then estimate the cost of ownership by adding the purchase price, any estimated annual maintenance fees and any other fees that come with purchasing it (i.e. cost of licensing the unit, transporting it to the job site etc.) Estimate depreciation, the cost of financing and a potential resale cost if you would resell the item later. A rent versus buy calculator can help you crunch all the numbers to determine whether rental or purchase will make the most financial sense not only today, but tomorrow as well.