Renting a Commercial Dishwasher Adds Up Quickly
There's no way around it: kitchen equipment is expensive. The high upfront costs of starting a restaurant or replacing equipment makes it tempting to cut corners to save money, but that can actually mean spending more in the long run. One way many operators end up spending way more than necessary is by renting a commercial dishwasher.
Dishwasher Rental Long-term Costs
It is easy to see how renting a commercial dishwasher can be tempting. Purchasing a warewasher can cost thousands of dollars, while renting means you can get one installed for only a few hundred dollars upfront. However, renting, or even leasing, can cost you up to two times as much as purchasing outright over the life of the unit. Below are some ways that renting or leasing will cost you more.
- Most companies that rent or lease commercial kitchen equipment require that each piece be insured at total replacement cost, meaning you will carry higher insurance premiums.
- Commercial dishwashers may qualify you for tax benefits, such as a Section 179 deduction1. Section 179 allows you to deduct the full purchase cost of equipment up to $2,000,000 and can earn you up to $500,000 back on your total equipment purchases. These impressive tax deductions will not apply to rented equipment. Please note that these numbers are accurate for the 2016 tax year, but the tax code changes often so be sure to look up current codes before purchasing.
- While no one wants to contemplate business failure, it is a potential reality that must be considered. If you sign a contract for a warewasher rental and your business goes under, you can be left with high penalties or buyouts. However, if you own your washer and the worst case scenario happens, you can recoup some of your costs by selling it to another restaurant owner or a used equipment dealer.
- Commercial dishwashers use a lot of energy and water, so you can save a lot of money by investing in energy-efficient equipment. Because using more water means you'll buy more chemicals, rental companies rarely offer energy-efficient models. This keeps you spending more on water, power, and chemicals, and prevents you from taking advantage of the tax credits and other monetary incentives available for purchasing ENERGY STAR equipment.
Freedom to Negotiate
Another major factor when it comes to commercial dishwasher rental is the fact that you are irrevocably, at least for the length of the contract, tying yourself to one company for chemicals and service. This means that you have to pay their prices for their chemicals – even if they have a price hike two months into the contract. You have no room to negotiate or look for other suppliers that may cut you a better deal.
Most rental and lease contracts include maintenance and service, which can be a boon to foodservice operators choosing to rent. However, the maintenance on commercial dishwashers is fairly simple: clean the filter out every day, wipe out the washing chamber every once in a while, and run a delime cycle every two to four weeks, based on usage. The only other regular maintenance that is needed is making sure the chemical lines do not need cleaning or replacing, which your chemical company should do regardless of whether you rent or own the machine.
When it comes to emergency service, it may seem beneficial to have a rental company that can send out service technicians, but that is not always the case. As with the chemical purchases, you are bound to the rental company to wait on its repair services, and are unable to shop around for faster service if it may be a few days before there's an opening in its schedule. Additionally, rental companies don't always use factory-authorized service technicians, so you may end up dealing with sub-par service that leaves your commercial dishwasher in less than optimal condition.
1. Restaurant Insurance. Castle Rock Agency Inc. Accessed January 2016.
2. Understanding the Section 179 Deduction. Section 179.org. Accessed January 2016.