Whether you need a new nail gun, a concrete saw, or a $120,000 excavator, every tradie eventually faces the same decision: buy outright, take out a lease, or just hire when you need it?
Get it wrong and you're either bleeding cash on gear you barely use, or throwing money at hire costs for equipment you run every week. This guide walks through each option with real NZ numbers so you can make the call that suits your trade and cash flow.
The Three Options at a Glance
1. Buying Outright (Cash or HP)
You own the asset. You claim depreciation each year through IRD, and if you bought the item after 22 May 2025, you may qualify for the 20% Investment Boost — an accelerated first-year deduction that lets you write off a larger chunk up front. See our article on the NZ Investment Boost deduction for the full breakdown.
Best for: Equipment you use daily (hand tools, trailers, work vehicles, compressors, power tools). Anything with a working life of 5+ years where daily hire rates would stack up fast.
Example: A $4,500 tile saw used 200+ days a year would cost $55–$75/day to hire from a tool shop — that's $11,000–$15,000 annually. Buying it outright pays off in under six months.
Cash flow catch: Big upfront cost. If you're tight on working capital after the quiet patch of 2024–25, draining your account for a $30,000 scissor lift could leave you short for materials on the next job.
2. Equipment Lease (Finance Lease or Operating Lease)
You pay regular instalments to use the equipment, usually over 2–5 years. With a finance lease, you effectively own the asset at the end (or buy it out for a small residual). With an operating lease, the finance company keeps it and you hand it back — handy for equipment that becomes obsolete quickly, like survey gear or telematics hardware.
Best for: Plant and equipment you need consistently but can't justify a big cash outlay for — excavators, elevated work platforms, concrete pumps, larger generators.
Tax treatment: Lease payments are generally a business expense, deductible in full. IRD treats finance leases differently to operating leases for depreciation purposes — if in doubt, check ird.govt.nz or ask your accountant before signing.
NZ example — 5-tonne digger: - Purchase price: $115,000 + GST - Finance lease over 48 months at ~7.5% p.a.: approx. $2,600/month - Total cost over 4 years: ~$124,800 - Estimated resale value at end of term: $35,000–$45,000 (depending on hours)
Leasing spreads the cost but you pay more in total. You also avoid the risk of a large capital outlay on gear that sits idle during slow periods.
3. Hire (Short-Term / Project-Based)
You rent what you need, when you need it, from a hire company. No ongoing commitment, no maintenance headaches, no depreciation tracking. You just pay and return.
Best for: Specialised one-off jobs (traffic control equipment, confined space gear, large formwork), or equipment you'd use less than 30–40 times a year.
NZ hire cost benchmarks (2026): - Scaffolding: $3.50–$6.50 per m² per week - Concrete pump: $800–$1,400/day (plus operator) - 5-tonne excavator: $450–$650/day - Access platform (10m): $380–$500/day - Site shed / toilet: $85–$120/week
The hidden cost: Hire takes time — pickup, delivery, returns, damage assessments. On a tight schedule, lost hours cost more than the hire rate. Always factor this into your quote.
Running the Numbers: A Decision Framework
Use our equipment finance calculator to model different scenarios side by side. But as a rule of thumb:
| Scenario | Best Option |
|---|---|
| Use the gear 3+ days per week | Buy (or HP) |
| Use it 1–2 days per week, ongoing | Lease |
| Use it less than once a week | Hire |
| One-off or first-time job type | Hire first, buy if it becomes regular |
| Cash is tight but work is regular | Lease |
| Taxable income is high this year | Buy (claim Investment Boost + depreciation) |
GST and Depreciation: What IRD Expects
If you're GST registered (turnover over $60,000/year), you claim the GST back on any purchase or finance arrangement. You then depreciate the GST-exclusive cost over the asset's working life.
IRD publishes depreciation rates for most equipment categories. As a guide: - Hand tools (power tools under $1,000): often fully expensed as low-value assets - Trailers: 13.5% diminishing value per year - Excavators and earthmoving plant: 15–20% diminishing value - Vehicles: see our full guide to NZ tradie vehicle expenses and IRD rules
For assets bought after 22 May 2025, the Investment Boost effectively doubles your first-year deduction — a meaningful advantage if you're looking at a large purchase before 31 March 2027.
The Maintenance Question
Owned and leased equipment is your problem when it breaks. Hire equipment is the hire company's problem (within fair wear-and-tear limits).
For high-maintenance plant like compressors, generators, and pressure washers, factor in: - Service costs (typically $500–$1,500/year for medium plant) - Downtime risk — a broken machine on site costs you in delays, not just repairs - Storage and insurance (contact your broker — most tool and plant floater policies run $800–$2,000/year for a typical tradesman's inventory)
Some lease providers offer bundled maintenance packages. Get the cost per hour of the maintenance plan and compare it to what you'd pay a local mechanic or dealer.
Financing Options in NZ
If you're buying rather than hiring, your main finance options are:
- Bank business loan or overdraft — competitive rates (~7–9% p.a. in 2026), but requires financials and can take 2–4 weeks to approve
- Hire purchase through a dealer — fast approval, but check for establishment fees and balloon payments
- Equipment finance brokers — specialists like Equifax, Oxford Finance, or MTF Finance can often access better rates and turnaround than going direct to a bank
- Lease-back arrangements — sell gear you already own to a finance company, then lease it back. Useful if you need working capital without losing the equipment
For trade credit and equipment finance over $50,000, MBIE encourages businesses to get multiple quotes — the difference between the best and worst rate can be $8,000–$15,000 over a 4-year term.
Practical Tips Before You Sign Anything
- Check the end-of-term conditions on any lease — residual values and buyout fees vary a lot
- Compare total cost of ownership, not just the monthly payment
- Check whether the Investment Boost applies — it's currently available on new and used assets, but there are exclusions (land, certain intangibles, some buildings)
- Don't over-capitalise — buying gear for a one-off contract is a common mistake when you're busy. Hire first, buy if the work becomes regular
- Talk to your accountant before any purchase over $10,000 — the tax treatment can shift the decision significantly
Bottom Line
The right answer depends on your trade, your cash position, and how often you'll actually use the gear. Daily users should almost always buy (especially with the Investment Boost available). Occasional users hire. Consistent-but-not-daily users lease.
Use our free equipment finance calculator to model the real cost difference before you commit.
Download our free NZ tradie templates at tradietools.nz/templates/ — including equipment purchase comparison spreadsheets and hire-vs-buy worksheets.
Looking for a smarter way to track equipment and job costs across your team? Fastcrew is a NZ-built tradie app that lets you log equipment usage, track costs per job, and stay on top of your margins without a spreadsheet.
NZ Tradie Tools provides free calculators, templates and guides for New Zealand tradies. Visit tradietools.nz.