Please use the heavy equipment leasing calculator below to access an instant quote. For projects over £100,000, please contact us to find out more.
Amount
£1,000.00
Term
1 Years
Monthly Payments
£97.71
Flat Rate
17.25%
Total Payable
£1,172.50
Our heavy equipment finance calculator is a quick and easy way to get a guideline finance rental quotation. It takes only a few seconds. We do need to point out, this finance calculator will only give you a rough guide. Heavy equipment covers a vast array of machinery and vehicles for numerous manufacturers, many of whom may be presenting a finance quote with a built in residual value.
Heavy equipment is a term that is generally used to describe big vehicles used in earth moving and construction. The phrase can be misleading as it does not necessarily relate to the actual weight and size of the equipment. To make matters a bit more confusing, there are other similar definitions such as construction equipment, heavy trucks and earth moving equipment.
The term heavy refers to the job the equipment does as opposed to size or weight. Lots of smaller construction and earth moving equipment is classified as heavy equipment but would not be deemed to be large in size or heavy in weight.
Typically, heavy equipment has a long-life expectancy and commands good resale values. Let’s look at an example of a three-year £250,000 lease for some computer equipment compared to heavy equipment. At the end of the three-year term, the computer equipment may have a value of £25,000, if you are lucky. With heavy equipment, the asset value after three years may well be £200,000. In some instances, if there is a long waiting list, the value might even be higher.
Leasing companies will charge a much lower rate of interest for heavy equipment as the financial risk in event of default is much lower. Saying that, we have seen an example of heavy equipment used to move coal underground. If this equipment has to be reposed, the value will be a lot lower. They will have to de-install the equipment and find a buyer of highly specialised equipment. Not as easy as selling a secondhand dumper truck above the ground.
In summary, you have to be careful when using a heavy equipment leasing calculator. The interest rates will be very cheap, but you/we need to understand if there is any residual value placed in the equipment.
A residual value, referred to as an “RV,” is an amount of money the leasing company feels the equipment will be worth at the end of the lease term. If you take the example of a brand-new excavator, the second-hand value after one year will be much greater than the value after ten years. The leasing company will take advice as to what they feel the RV is. A £250,000 excavator in five years will be £200,000 in value, in theory they can calculate rentals on £50,000, not £250,000. (We have simplified this, in reality the leasing company will have to fund the £250,000 upfront so will need a return on the interest on the full £250,000 and need capital repaid on the £50,000.)
The summary is you might take delivery of a £250,000 excavator but end up paying less than £150,000 in rentals over three or five years.
At the end of the lease / finance term, you will not own the asset. The leasing company will look to take back the heavy equipment and sell it, you could refinance it or carry on renting it. This may not be the best option for your business.
Most companies will use a lease purchase contract which gives them title in the equipment at the end of the finance term. Again, a lot of companies will put a residual value into the lease to keep the payments down and try to match the true depreciation against the monthly cost.
We will aim to get you the cheapest finance quote for your heavy equipment. There are no second places in the leasing business, we either offer a good service with the best lease rates or lose the business to our competition.
Please note, we have not built any residual values into our lease calculator. We can talk through residual values and the impact they have on pricing. Please call us for more information.
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