Vital Considerations Whether to Rent, Buy, or Lease Your Forklift
August 12, 2019
Forklifts are essential pieces of equipment commonly used in industrial lifting. However, they are quite expensive to purchase and maintain. There are various options to consider when looking for forklifts to find the right fit for your business. Let us dive straight into some of them.
Renting Your Forklift
Renting is almost similar to leasing only that in renting, the rental period is shorter – a few weeks or months. Renting is recommended for seasonal contractors who have peak contractual periods that require moving of extra freight. Rent forklift products also when you want to experiment on whether you'll need to lease or buy your lifting equipment. Additionally, you may rent a different forklift model to determine whether it can boost productivity.
Renting a forklift can be necessary when transporting large HVAC equipment such as Charge air coolers or Boilers.
However, be advised that many rentals can be more expensive compared to buying or leasing options. They are costly because of the maintenance cost included. You need to ensure that rental fees imposed by dealers are covering the idle time when the equipment is not used in rental assignments.
Leasing Your Forklift
Leasing charges may depend on different aspects such as the actual cost of the forklift equipment. For example, a forklift that costs $25,000 will demand a monthly leasing fee of $600 or approximately 1,100/month for a $50,000 forklift equipment. On top of this, you will need to carter for an extra maintenance fee. Furthermore, monthly leasing costs can depend on different circumstances.
Forklift Leasing Versus Purchase
There are various benefits related to forklift leasing, and they include:
Tax benefits – most states consider leasing as a tax-deductible operational expense. However, it is wise to confirm applicable state laws and tax regulations.
Be technologically aware – you can be able to replace your equipment regularly when you lease. These regular replacements of forklift equipment can see the introduction of newer models that offer higher productivity and safety advantages.
Budgeted maintenance – maintenance fee can be added as part of your total leasing fee per month. You'll thus have a predictable monthly cost that allows for accurate budgeting.
Lower initial costs – contractors enjoy complete forklift performance without having to pay for the total purchase cost. Leases can run from three to five-year term and monthly lease together with the maintenance cost match jointly with forklift utilization.
These are the main advantages of leasing your forklift over purchasing a new one. However, always remember that it is more expensive to lease your forklifts over time than buy them at once. Additionally, you may face penalties in case of overusing the equipment. Furthermore, leased forklifts are not permanent assets you can use to borrow a loan.
Before you rent forklift products, consider the advantages of purchasing them. Buying your forklift equipment may be suitable if your company prefers to own all its capital equipment. Also, it would be easier to purchase forklift equipment when you have competitive access to a line of credit, have a stable business, or have ready cash in hand.
Every company will approach the lease-buy options from a different perspective. However, rentals offer quick short-term solutions to contractors with seasonal peaks. On the other side, large corporations would instead lease forklifts than purchase them. Furthermore, with the rapid rates of change in supply chain businesses currently, leasing offers superior flexibility.
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