Mini Excavator Financing Options

Buying vs. Renting or Leasing a Mini Excavator

The mini excavator is a unique type of earth moving equipment. Designed to be as tough, rugged and durable as its larger counterparts, the mini excavator has the ability to fit into tight, confined areas, and can be used around obstacles such as walls, vehicles and other sensitive objects due to the zero tail swing configuration on many of these machines.

When deciding to purchase a mini excavator, there are several choices: Buy, rent or lease. If buying is desired, the most efficient option is to look for new or refurbished machines. This option typically includes some type of warranty program, and potentially a maintenance program as well. However, if funding is an issue, there are many decent used excavators for sale. There are five main aspects that should be examined prior to purchasing a used mini excavator:

  • Play in the slew ring
  • Cracks, dents and bends
  • Leaks
  • Broken or inaccurate hours meter
  • Scalloping between the excavator bucket teeth

Here are some options that should be considered when making a determination of whether to buy, rent or lease earth moving equipment.

Length of project(s)

The first consideration should be for how long the mini excavator will be needed. For instance, if the machine is only needed for a short project, perhaps buying is not the best option. A rental can be purchased in this case, and as soon as the project is completed, the machine can be returned. For long projects, renting may not be as efficient as rental costs can easily exceed several hundred dollars per day.

The length of the project, along with operating and maintenance costs should be analyzed to determine the proper method of obtaining a mini excavator.

Hours on the machine

For new machines, this should not be an issue. But for refurbished or used machines, the hours on a machine can cause its value to drop immensely. Mini excavators are built with an average operating lifespan of 8,000 to 10,000 hours. Approximately 50% of all mini excavators fail by the time they reach 8,500 hours, although this can potentially be offset by proper maintenance and upkeep of the machine in order to extend the lifespan.

Maintenance costs

Maintenance on mini excavators can be high, and for this reason, the costs should be considered before purchasing, renting or leasing. If a mini excavator is bought brand new, it may come with a warranty that helps cover some maintenance costs.
However, other warranties may have stipulations that only provide warranty work if specific types of fluids are used, and only if maintenance work is performed at qualified shops. If the mini excavator is used, the maintenance costs will be completely upon the purchaser/owner.

Preventative maintenance can cost on average about $4 per working hour of the machine. Here is a short breakdown of maintenance work that should be performed.

  • Daily maintenance: Track cleaning, greasing, fuel (as needed), sprocket cleaning, and track tension examination. (Preventative maintenance: $32)
  • Weekly maintenance: check (and replace if needed) fuel filter, and clean air filter. (Preventative maintenance: $160)
  • Every 250 working hours: Replace fuel filter and perform planetary oil change. (Preventative maintenance: $1,000)
  • Every 500 working hours: Perform motor oil change. (Preventative maintenance: $2,000)
  • Every 500-750 working hours: Perform hydraulic oil change. (Preventative maintenance: $2,000-3000)

After 2000 working hours, the maintenance costs of the machine will need to be examined in detail, as bearings and bushings will wear out, pumps will need to be rebuilt or replaced, planetary may need to be rebuilt, etc. At this point, the examination of the maintenance costs should be to determine whether the costs are worth keeping the machine, or whether it's time to replace the machine with a newer model.

Leasing is an option that should be considered if maintenance costs are a concern. Many leasing programs offer machine maintenance as part of the agreement. It may increase the monthly payments, but the machine payment plus maintenance costs would be covered.

Renting can be a great option to eliminate maintenance costs as well. If the machine is rented, the renting company maintains the responsibility for all maintenance fees.

Storage costs

Storage costs will vary depending on the size of the machine, the length of the storage lease and other factors. If the machine is to be kept on-site, it should have the proper storage available in order to prevent damage to the machine and possible theft. While the machines are typically built tough, storing them outdoors during winter months can cause burst hoses, leakage, etc. Indoor storage can help maintain the exterior of the machine (a positive if the machine will be sold at a later date), as well as preventing costly operational and maintenance problems.

Renting machines can help eliminate storage costs. Rented machines can be obtained on an "as-needed" basis, so storage is rarely a problem.

Type of cash flow

If the machine is to be used to produce a cash flow, this should be analyzed prior to purchasing, renting or leasing a mini excavator. While renting may eliminate or reduce maintenance and storage costs, some rental agreements may have stipulations against subcontracting or sub-renting.

A lease agreement typically allows users to replace machine after a specified number of working hours, or after a specified length of time. Total revenue should be analyzed with the additional maintenance, storage and transportation costs in order to determine the best method for obtaining a mini excavator.


Manufacturers will typically provide financing for their machines if bought new or refurbished. For used machines, a buyer may need to go through a bank or credit union. There are also specialized lenders that provide lending for construction equipment, but as with any loan, the terms should be carefully examined to ensure there are no hidden fees or conditions.

Manufacturers typically offer the best financing, but their prices may be higher than going through a dealer. The options should be considered in order to determine the most cost-effective method for the purchase.

Leasing is an option that benefits many users that do not wish to incur the responsibility of a full-blown purchase, but would rather make payments for the duration of the loan. This option is often considered in order to balance costly maintenance fees.

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