Equipment is the biggest check most contractors write, and the decision gets made on gut more often than anyone admits. In this episode Brent Oberlink and co-host Travis sit down with Andrew Fiala of Vermeer Midwest to work through when to buy, when to rent, and when to get rid of a machine that still runs fine.
There is no universal right time
Fiala will not give a formula, and he is upfront about why. The right time depends on how long the company has been in business, how many seasons are behind them, what the work looks like, and whether the capital is there. A first year operation and a company with six crews are answering different questions.
His general guidance for anyone starting out is to begin used and work up. Not junk, in his words, but doing the homework to find a machine that meets the work in front of you rather than the work you hope to win.
The warranty window is the real signal
The most useful idea in the conversation is that larger contractors are not keeping machines until they die. They are running them through the maintenance plan or the extended warranty, then turning them over while the used market still pays for them.
Brent describes doing exactly that inside his own operation with full size skid steers. They had always leased. When the used market jumped, the numbers said buy at lease end instead, run them a year or two under extended warranty, then turn them in. The decision changed because the market changed, not because of a policy.
That is the discipline worth copying. Warranty coverage and used market value are the two levers, and both move.
What running old iron actually costs
The part of this episode that should make people uncomfortable is Brent's account of bidding against companies running very old equipment. The competitor bought the machine for fifty thousand instead of two hundred and twenty. Then they lost the contract, because the customer's feedback was that their equipment was broken down all the time. On top of that they carried the maintenance bill, and their crew was not billable while the machine sat.
The sticker price is one input out of several. Downtime, maintenance, delayed projects and idle crews are the ones that do not show up on the invoice, and they are usually larger.
Build the hourly number
Fiala walks through the calculation contractors should be keeping. Cost to own or rent or lease the machine per hour. Fuel for those hours. Maintenance history divided across the hours. Breakdown cost. Set against the hours you actually bill it.
Once that spreadsheet exists for each machine, buy, rent and replace stop being arguments and start being arithmetic. Most contractors have never built it, which is why the conversation usually ends up being about the monthly payment instead.
Telematics, and the unglamorous reason to use it
Both agree the adoption curve has moved. Contractors are more receptive to telematics now, and past a certain fleet size you either use it or you hire somebody whose job is to chase that information by hand.
The pitch here is not the dashboard. It is that maintenance stays on schedule automatically, and that machine hours give you the data to decide when to turn something over instead of guessing.
The advice Fiala closes with
Asked what he would stress to contractors buying anything, his answer is not about brand or price. Equipment gets more complicated to work on every year, so the service group behind the machine matters as much as the machine. Whether you can reach a person at night or on a weekend, and whether parts show up where your crew is working, is what you are actually buying.
Brent's endorsement of that point is the kind you only get from having needed it: parts overnighted to wherever the crew happened to be.
Listen to the full episode, or find The Better Contractor Podcast on Spotify, Apple Podcasts and YouTube.