Compare Leasing vs Buying a Backhoe Loader Costs
Leasing Backhoe Overview
Leasing is a popular choice with backhoe loaders because the machines are so expensive. With a lease, you’ll pay little or no money down, then make monthly payments over a period of years - usually three to five. When the lease term expires, you can purchase the machine, trade it in for a newer model or simply return it.
Cost of Leasing a Backhoe Loader
The cost of leasing a backhoe loader depends on the price of the machine, the length of the lease and your credit rating. With good credit, expect to pay about $1,000 to $1,250 per month to lease a $50,000 backhoe loader for five years. A $75,000 machine would run about $1,500 to $1,750 per month.
Many lease agreements also include a $100 buyout option. For a slightly higher monthly payment, you will have the option of purchasing the backhoe loader at the end of the lease for just $100.
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Leasing a Backhoe Loader Pros
- Upfront cost - Leases require little or no money down. Start using the equipment you need without depleting your working capital.
- Modern equipment - When you lease, you’ll always have modern equipment that is in good working order. You can trade it the backhoe loader for a newer model every few years.
Leasing a Backhoe Loader Cons
- Total cost - Leasing is almost always more expensive than buying in the long run.
- Lack of ownership - When the backhoe loader technically belongs to someone else, you won’t get to decide when and how it is serviced. You could lose valuable work time working around the leasing company’s schedule.
Buying a Backhoe Loader Overview
Backhoe loaders are among the most common pieces of heavy equipment. As the name suggests, they provide two functions: The front of the machine has a loader that can be used to push dirt or pick up loose material, while the other end has a backhoe designed for digging.
The vast majority of backhoe loaders that are sold are financed. Much like a car loan, you’ll pay a downpayment and spread the remaining cost of the machine over several years of monthly payments. Once the machine is paid off, it’s yours to keep for as long as you like.
Cost of Buying a Backhoe Loader
A standard backhoe loader with a 14-foot dig depth and 80 to 90 horsepower costs anywhere from $50,000 to $75,000. Larger models with greater horsepower and dig depths can top $100,000, while compact models with dig depths of less than 10 feet sell for around $25,000 to $35,000.
Optional features such as four-wheel drive and automatic transmissions can quickly escalate the purchase price, as will any additional attachments you purchase. Extra attachments such as hammers or grinders usually cost $1,000 to $2,000 each.
Buying a Backhoe Loader Pros
- Ownership - When you own a backhoe loader, you have complete control over the machine and how it is used. You decide when to service it and when to sell it.
- Long-term cost - Buying heavy equipment is almost always less expensive in the long run than leasing.
Buying a Backhoe Loader Cons
- Upfront cost - Even if you finance the backhoe loader, you’ll most likely have to put down a sizable downpayment.
- Depreciation - By the time your backhoe loader is paid off, it will be worth far less than when you purchased it. Newer models with improved technology will have emerged. Unlike a lease, you won’t have the luxury of simply returning it.