In the Era of farm mechanization, there are both the separate advantages of purchasing and renting farm machinery here are some of them listed below:
Advantages of Purchasing Farm machinery
- Purchasing a piece of Farm machinery allows the operator more control over how much it is used and for how long. There are fear of penalties if the machine is used for more hours than was anticipated, or if it is sold or traded early.
- Owned equipment may be easily replaced or sold at the owner's consideration; replacing leased equipment is difficult may be difficult.
- Owned farm equipment has own asset value and may be used as collateral or security against other loans.
- Owned equipment Increased asset value on the balance sheet.
Advantage of renting farm equipment
- Owning farm equipment required a huge amount of capital investment, but if you have budget constraints then you can look for renting farm equipment because it required less investment.
- Machinery rental utilizes operating capital instead of finance capital.
- A long-run expense can not be a burden on you. A big machine needs to taken for the service to check fluids and hydraulics, parts and update the latest technology. In renting you are not the owner so you can use the machine hassle-free.
- You can save the tax by hiring a machine to complete your farm work.
- Use of new technology without investing a large amount of money. New Opportunities to grow and harvest crops and products by new machinery.
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