Why Leases Are Becoming popular For Electric Heavy Equipment
If you’ve recently thought about using a piece of electric heavy machinery for your business — or even for personal use — but you’re hesitant to pull the trigger on a purchase, […]
If you’ve recently thought about using a piece of electric heavy machinery for your business — or even for personal use — but you’re hesitant to pull the trigger on a purchase, remember, there are other options to consider. And one of them is a lease.
Over the years we’ve sold many electric machines to customers who either wanted to be an early adopter to get a jump start on electric equipment technology, or they knew exactly how they’d use their new machines and how they would benefit their business or operation long term.
But we’ve also worked with a lot of customers and prospects who are interested in all the benefits electric brings to the table, but they’re not quite ready to commit. Some aren’t sure if it’ll be the right fit. Some don’t want to invest in the technology today, knowing there may be advances in the near future they’ll miss out on. And others simply want to try it out first without the long-term investment.
If this sounds like you, a lease could be your best path forward to discovering all the ways electric heavy equipment is getting a wide range of projects done.
As an example, earlier this year we worked with Volvo Financial Services to put together an electric leasing package for Robles1, a demolition company in San Antonio.
In lieu of purchasing their new Volvo EC18 Electric outright, Robles1 chose to lease the new excavator for three years. The general manager of their South/Central Texas team says the agreement allows their crew to before potentially committing to purchasing one down the road. And so far, they feel confident that once the lease is up, they’ll be in the market for another EC18, or a newer electric model if it’s the right fit.
Leasing electric equipment removes some of the stress of committing to new technology. And if you finance with companies like VFS who understand the machines and how they’re used, they can help put together the right package that gets you in a machine. It’s essentially a trial run for you.
We’ve even worked with VFS to put together an all-inclusive electric lease bundle where you get a maintenance package, an extended warranty, a DC wall-mounted fast charger and more. It’s put together to give electric users added peace of mind and confidence if they’re new to electric equipment.
I should mention that while leases have their benefits, they’re not for everyone. When you lease equipment, you don’t build any equity, which means you won’t have an asset to sell or trade-in when you no longer need it. This could be a significant disadvantage if you’re looking to build a fleet of equipment as assets.
And depending on who you lease with, you may be required to maintain the equipment according to strict standards which can lead to additional costs (as I mentioned earlier, maintenance is included with the all-inclusive lease from VFS). There will also likely be fees for early termination, and so on. So it’s important to fully understand how you intend to use an electric machine and for how long, then work with your equipment dealer to determine which option is best for you.
If you’re seriously considering electric heavy equipment — a large machine or compact — and you’ve been hesitant to purchase, I recommend reaching out to a local Volvo dealer to talk with them about a lease. Who knows, once you experience the emissions-free power these machines have to offer, you may decide you’re ready to purchase one outright in the years to come. A lease is a great way to find out.
By Nick Tullo
Categories: Construction Equipment, Finance, Insights
