Buy vs. Rent:?Wheel?Loader Economics

A Texas firm does the math and decides leasing is the best option.

📅   Fri January 08, 2016 - West Edition


There are many projects connected to well drilling that can be done with the DL250-3 wheel loader.
There are many projects connected to well drilling that can be done with the DL250-3 wheel loader.
There are many projects connected to well drilling that can be done with the DL250-3 wheel loader.
(L-R) are Arnold Maldonado Jr., president of Ygriega Field Services LLC; Arnold Maldonado Sr., CEO of Ygriega Energy Company Inc.; and Pablo Almaguer, general manager of Ygriega Energy Company Inc.

Faced with the many unknowns in the oil business, Ygriega Field Services, a Texas company specializing in on-site services for the drilling industry, developed a strategy for the future.

After taking a hard look at the economics of heavy equipment, the company turned its attention to a Doosan DL250-3 wheel loader. The decision to purchase the machine has already made a significant impact on both the current financial situation of the firm and the plan to expand its workload.

“We previously rented wheel loaders from local rental centers, primarily to handle pipe and crushed rock at drilling sites,” said purchasing manager Pablo Almaguer. “A six-hour rental could cost us as much as $1,200. We would usually do that twice a month. So, our total cost of having limited access to a wheel loader would be around $2,400 a month. That seemed high in today's economic environment. Plus, we had no motivation to look for other work that would require a wheel loader because most of the additional income would go to the rental company. That's why we began to consider alternatives.”

Choosing the right wheel loader, based on what it could do and what it would cost, became the focus of Ygriega Field Services, which is part of Ygriega Energy Company.

They looked at several brands, and Doosan stood out as the clear choice.

“For about the same money as we were paying for a pair of six-hour rentals each month, we now are leasing — with an option to buy — a very productive Doosan wheel loader. The three-year arrangement allows us to use our monthly payments as a down payment if we want to purchase the loader. Or we can continue the leasing program with a new model after the current lease expires.”

The financing arrangement is not the only benefit of having a top-of-the-line wheel loader available every day.

“Once we got the DL250-3 wheel loader, we informed the well-drilling community that we were capable of taking on a variety of additional assignments,” Almaguer said. “There are many projects connected to well drilling that we can do much easier with our wheel loader. Our customers like dealing with fewer vendors, so the more services we can provide the better.”

He points out that if the company can keep the wheel loader busy with one job a week, it can make the payment and keep employees busy. “Instead of the dollars going to a rental firm, more of the income is staying in our own pocket,” he concluded.

(This story was reprinted with permission from Doosan's DoMore Magazine, Winter 2016 Issue.)