Why the Best Construction Companies Are Ditching Purchasing Heavy Equipment

In today’s construction industry, even the largest and most established contractors are rethinking their approach to equipment. Instead of locking up capital in depreciating assets, many are opting for long-term equipment rentals to boost flexibility, preserve cash flow, and streamline operations.

At first glance, you might hear terms like “leasing” and “renting” used interchangeably, but at Plains Equipment Rentals, we focus on true rentals. That means no lease-to-own obligations, just straightforward access to the right machine for the right job, for as long as you need it.

With equipment prices continuing to rise while rental rates remain relatively stable, the case for long-term rentals has never been stronger.

Is Heavy Equipment a Good Investment in 2025?

Owning heavy equipment has traditionally been viewed as a long-term investment, but the numbers are starting to tell a different story in 2025, especially for growing construction firms.

Equipment prices have surged over the last four years, in some cases increasing by 20–30%, while rental rates have stayed relatively flat. That means companies purchasing machines today are paying significantly more upfront, but not necessarily getting more value in return.

Beyond the rising purchase price, ownership comes with ongoing costs that often go underestimated:

• Depreciation: Most heavy equipment begins losing value the moment it’s delivered to your yard.
• Maintenance & Storage: You’re responsible for repairs, parts, and keeping the equipment safe during idle periods.
• Underutilization: If your project timelines shift or equipment sits unused between jobs, you’re still carrying the costs.

Long-term rentals, on the other hand, offer cost alignment with project timelines. You only pay for what you use, and when you need it. Rentals eliminate sunk costs and reduce your exposure to seasonal downtime, making them a smarter financial choice for contractors looking to scale without overextending.

For many in the industry, the real investment in 2025 isn’t in the machine, it’s in flexibility.

The Case for Long-Term Rentals (vs. Ownership or Leasing)

More construction companies across Western Canada are shifting away from owning their heavy equipment, and for good reason. Long-term rentals offer a flexible, cost-efficient path that keeps your projects moving without locking up capital.

Here’s why long-term rentals are becoming the smarter play:

• Lower Upfront Costs: Buying heavy equipment requires a massive capital outlay. Long-term rentals avoid that burden, giving you access to high-value machinery without tying up cash.
• Scalable Fleet Size: Rent what you need, when you need it. Whether you’re taking on a bigger job or scaling back between projects, rentals let you adjust quickly without sitting on unused assets.
• No Depreciation Worries: With rentals, you don’t have to worry about declining equipment values, resale headaches, or fluctuating market conditions.
• Off-the-Balance-Sheet Simplicity: Long-term rentals don’t carry the same liabilities or debt implications as ownership or leases, helping you maintain a healthier financial profile.

Note on Leasing vs. Renting:

While the terms are sometimes used interchangeably, they’re not the same. At Plains Equipment Rentals, we focus on flexible long-term rentals, not lease-to-own agreements. With rentals, you’re not locked into eventual ownership or long-term payments. You’re simply paying for access when you need it, nothing more.

What Are the Disadvantages of Equipment Leasing?

While leasing can seem like a middle ground between buying and renting, it often comes with challenges that don’t suit today’s fast-moving construction environment:

• Rigid Contract Terms: Leasing usually requires fixed, long-term commitments—often 3 to 5 years—regardless of whether you still need the machine and does not have the ability to adjust the rates based on your actual needed usage of the machine at any given month like rental.
• Fine Print: Many leases include clauses for excessive use, wear and tear, early termination penalties, or limited hour usage which can drive up your total cost unexpectedly.
• Residual Value Control: The dealership sets a residual (buyout) value that is often higher than market value at the end of the lease, which either: Pushes you to return the equipment (so they can resell at a profit), or forces you to overpay to keep it.
• Locked-in Service/Parts Revenue: Leases may require you to service equipment at the dealership or use OEM parts, ensuring repeat business for them.
• Lack of Transparency on Rate: Dealers often use a “payment-based” sales method — giving you a monthly number, but not telling you the real interest (money) factor or how it breaks down.
• Locked-In Ownership Paths: Lease-to-own structures may sound appealing but can backfire. You’re often locked into owning a machine you may outgrow, underuse, or no longer need once the project ends.
• Reduced Agility: Leasing doesn’t offer the same flexibility as renting. If your job requirements shift, it’s much harder to change or swap out equipment mid-term.
• End-of-Lease Charges: Cleaning, inspection, reconditioning, or transport back to the dealer.

Why Renting Wins:

Renting from a trusted provider like Plains Equipment Rentals gives you more freedom. No ownership strings attached. No long-term lock-ins. Just the right machine, for the right project, at the right time.

Can You Capitalize Equipment Rental? (Accounting Perspective)

From an accounting standpoint, equipment rentals are typically treated as operating expenses (OPEX), not capital expenditures (CAPEX). This distinction matters for budgeting, financial planning, and tax purposes.

Why this matters:

• No Depreciation Hassle: Since rental costs don’t appear on the balance sheet as assets, you avoid tracking depreciation schedules or managing capital asset amortization.
• Simplified Budgeting: Long-term rentals can be forecasted and managed like leases but without the liabilities or long-term commitments typically attached to capital leases or purchases.
• Financial Agility: Renting allows construction firms to maintain leaner balance sheets. This can improve key financial ratios and leave more room for borrowing, investing, or scaling operationally.

Renting helps avoid tying up large amounts of capital, freeing up resources for project execution or business growth instead.

In summary, rentals give you control over your costs without adding complexity to your books. This is especially attractive for companies wanting to scale without being weighed down by long-term assets.

What Equipment Is Rented Most by Large Construction Firms?

When it comes to long-term rentals, not all machines are created equal. The most commonly rented equipment by large construction firms includes wheel loaders, excavators, and tow-behind air compressors, and for good reason.

Why These Machines?

• Wheel Loaders: Versatile, powerful, and used across nearly every job site, from material handling to snow removal. At Plains Equipment Rentals, wheel loaders are our most rented category because they deliver consistent performance and are ideal for year-round use.
• Excavators: Often needed for specific phases of a project (e.g., site prep or utility installs), making them great candidates for long-term rentals without long-term ownership obligations.
• Tow-Behind Air Compressors: Frequently used in seasonal applications like fall irrigation blowouts or in remote oilfield work where portability is key.

Why They Work for Long-Term Rental Setups

• These machines have high upfront costs, making purchase less appealing when usage varies seasonally or contractually.
• They are robust, serviceable, and designed for long-term operation, which means renters can depend on them without worrying about ownership-related upkeep.
• At Plains, we maintain our fleet meticulously, making our machines a smart, reliable option for extended rental periods.

For firms bidding on large contracts or scaling operations, long-term rentals of these high-use assets can help control costs, manage fleet size, and reduce downtime without sacrificing capability.

When Long-Term Rentals Make the Most Sense

Long-term equipment rentals are not just a fallback, they’re a strategic choice for many large construction companies, especially in today’s market. Here are key scenarios where long-term rentals shine:

1. Seasonal Project Schedules

In industries like construction, agriculture, and snow removal, demand for equipment fluctuates with the seasons. Renting allows companies to align their fleet with project timelines, without paying for idle machines during slower months.

2. Rapid Expansion or Market Entry

When entering a new region or taking on a major contract, purchasing a full fleet upfront is risky and capital-intensive. Long-term rentals let companies mobilize quickly and scale operations without long-term financial commitment.

3. Delays in Equipment Delivery or Procurement

With ongoing supply chain disruptions, wait times for new heavy equipment can stretch into months. Renting bridges the gap, keeping projects on track while you wait for permanent fleet additions.

4. Uncertain Economic Conditions

In a volatile market, locking capital into depreciating assets isn’t always the best move. Renting allows you to maintain cash flow flexibility and avoid the risk of owning equipment that may sit unused during economic slowdowns.

Whether you’re bridging short-term gaps or planning multi-year projects, long-term rentals provide operational flexibility without sacrificing performance.

Rent Smarter, Not Harder

More and more construction companies are moving away from the old mindset of owning every machine in their fleet. Rising equipment costs, unpredictable timelines, and the need for operational agility have shifted the landscape.

Long-term rentals aren’t just a short-term fix, they’re a smart, scalable solution for modern businesses. Whether you’re expanding into new markets, handling seasonal demand, or simply looking to reduce overhead, renting gives you flexibility without compromising performance.

At Plains Equipment Rentals, we specialize in long-term rental solutions tailored for Western Canada’s construction industry.

Looking to make the switch? Contact our team to explore smarter rental strategies across Alberta, Saskatchewan, and beyond.