Wet hire vs dry hire: the real cost

Dry hire is the machine on its own: you supply the operator, the fuel and the day to day servicing, and you carry the downtime. Wet hire is the machine with an operator, and normally fuel and maintenance, at a higher rate that carries the risk for you. Dry hire is cheaper per hour; wet hire is cheaper per problem. Buying beats both once the machine is working most weeks, and on a 20 tonne excavator that crossover usually arrives inside 2 years.

This guide is written for the WA contractors who live this decision: drilling, earthmoving, civil, crushing and maintenance businesses whose fleet is a mix of owned, hired and rent to own gear that nobody has sat down and costed as one thing. We fund equipment for that industry, so the last third of the guide is about the move most of them end up making, which is buying out the machines they never give back.

What each one actually includes

The hourly rate is where every comparison starts and where most of them go wrong, because the 2 rates are not measuring the same thing. A dry hire rate covers the machine and, depending on the agreement, some or none of the servicing. Everything else is yours: the operator's wages and on costs, fuel, ground engaging tools, transport to site, insurance excess, and the cost of the days the machine sits broken while a crew waits. A wet hire rate bundles most of that in. When a contractor says wet hire is double the price, the honest comparison is usually closer than that once the operator and the downtime are added to the dry side.

What wet hire does not include is control. The operator works for the hire company, the machine leaves when the agreement ends, and the rate is set for the job, not the year. For a short lift, a specialist program or an intermittent need, that is exactly right. For a machine that is on every site you run, it is expensive certainty.

The utilisation crossover

Utilisation is the whole decision. A machine on hire costs the same whether it works 20 hours a week or 50; a machine you own costs the same repayment either way. Below a certain number of hours the hire company is carrying an asset you would otherwise be paying for while it sits idle, and hire wins. Above it, you are paying the hire company's margin, their finance cost and their profit on a machine that is effectively yours, and owning wins.

Where the crossover sits depends on the machine, the rate and the utilisation, and the cleanest way to find it is to add up what you have paid. A contractor who has had the same excavator on dry hire for 14 months and has a further 12 months of work for it is not making a hire decision any more. They are financing the machine at the most expensive rate available and getting no equity for it.

A worked example: the 20 tonne excavator

The figures are illustrative, not a quote, and the point is the arithmetic rather than the rate. Take a 20 tonne excavator with a purchase price of $380,000 and a dry hire rate of $12,000 a month.

• 12 months of dry hire: $144,000, which is 38% of the machine's price. You own nothing.
• 24 months of dry hire: $288,000, which is 76% of the price. You own nothing.
• 36 months of dry hire: $432,000, which is 114% of the price. You have paid for the machine and a bit more, and you still own nothing.

Against that, an equipment loan on the same $380,000 machine is a repayment set by the term, the balloon and the rate, and at the end of it you own an asset with a resale value. The repayment for your own machine, term and balloon is a 10 second job in our equipment finance calculator. The conclusion does not need the exact figure: a machine that will work steadily for 2 years or more is cheaper to own than to dry hire, and the gap widens every month after that.

Rental purchase options, read carefully

An RPO looks like the best of both. You hire the machine, part of the rent accrues toward a purchase price, and you decide later. For a machine you are genuinely unsure about, it is a fair path. The trap is that the rent is set at hire rates, so by the time the option date arrives the effective price of the machine is usually well above what an equipment loan would have cost from day 1. The question to ask before signing is simple: what is the payout figure at the option date, and what would the loan repayments on this machine have totalled by then. If the RPO wins that comparison, take it. It usually does not.

When wet hire is the right call

Wet hire earns its rate when the machine is specialised, the work is short, or the operator is the scarce part. A crane for a 3 day lift, a specialist drill rig for one program, a dozer for a fortnight of pad preparation, a piece of plant your crew has never run: all wet hire. The higher rate buys a productive machine with a competent operator and none of the ownership risk, for exactly as long as the job lasts. Nobody should own a machine that works 6 weeks a year.

Buying out the gear you already rent

Most WA contractors are not choosing between hire and purchase from a standing start. They are sitting on machines that have been on dry hire or RPO for a year or more, that are core to the fleet, and that have quietly become the most expensive finance the business has. Buying them out is one of the most common equipment finance transactions in this industry, and it is usually the easiest to approve, because the machine has already proven it earns.

The lender assesses the machine on age, hours and value, and the business on its trading. The payout figure to the hire company is the purchase price. If the payout is fair against the machine's value and the repayment sits inside the cash flow the machine already generates, the deal converts a monthly cost that never ends into a repayment that does, and usually cuts the monthly figure at the same time. We compare the payout, the value and the loan side by side and say plainly whether it stacks up. The same analysis applies to gear that was financed expensively in a hurry and can be refinanced.

For the equipment side in depth, including master facilities for operators who buy more than once a year, see mining and civil equipment finance. For the rest of the contractor funding picture, the mobilisation and the working capital that sit around the machines, see mining services finance.

Not sure where the fleet cost actually sits?

Our free mining cash flow check takes 2 minutes and covers rental drag alongside the other 7 pressures that hit contractor cash flow: mobilisation, slow claims, retention, breakdowns, growth, ATO quarters and counterparty concentration. Tick what sounds familiar and we come back with a straight read on what is worth fixing first. If you would rather talk it through, contact us or call 0483 292 005.

Your equipment finance for mining and civil contractors specialist

Rowan Edwards, co-founder. Rowan is a former commercial banker and Credit Representative 579182, and he runs Rockwall's equipment finance for mining and civil contractors work personally. He runs the hire versus own comparison on real payout figures and real utilisation, and structures the buyout so the repayment sits inside what the machine already earns. More on the team.

Frequently asked questions

General information only, current at 2 September 2026. Hire rates, purchase prices and percentages in this guide are illustrative patterns, not quotes. It does not take your circumstances into account and it is not tax, legal or accounting advice. Confirm the tax treatment of any hire, RPO or purchase with your accountant.