EQUIPMENT ACQUISITION CHOICES. PROCEEDINGS OF THE 8TH EQUIPMENT MANAGEMENT WORKSHOP, MAY 28-31, 1990, DES MOINES, IOWA

As capital budgets continue to come under closer scrutiny and tighter spending reduction pressures, individual agencies and public officials often are faced with having to use alternative equipment acquisition methods to secure needed machines for key maintenance operations. There are many choices offered today for acquiring machines. All of these different choices, however, can normally be grouped into one of six common categories of equipment acquisition methods. These six categories, which are examined in this paper, are: renting; leasing; cash purchasing; lease purchasing; cash purchasing with trade or buy-back guarantee; and any of the above methods combined with a guarantee of repair, parts, labor, and/or maintenance costs. When considering the six basic acquisition methods, it is sometimes helpful to look at their relative, bottom-line costs. The acquisition of a 2.5 cu yd wheel loader is used to illustrate a typical acquisition cost analysis.