Should your business rent or buy a forklift?

A business’ choice if they’re going to invest on a forklift, or rather just rent or lease always depends on how important, cost-efficient, and useful it is to the daily operations.

We all know that investing on forklifts requires a large capital. Very huge in a sense that it is almost next to your manpower or salaries and wages expenses.

It is a must for every business to thoroughly review and assess huge expenses and weigh each pro and cons in order to come up with the best decision on how to reduce costs. With many financing options nowadays, one can weigh if it is best to purchase it in cash, or is it more cost efficient to purchase it through leasing, or just rent it in order not to carry its depreciation?

This blog post will help you arrive at the best decision on whether to purchase, lease, or rent a forklift.

Let’s take a look at the benefits of renting and buying a forklift.

Forklift Rental

What is the difference between rental and leasing?

The two are almost similar except for some factors that totally distinguish one from the other. While leasing is usually on a long-term basis, rental is somehow on a shorter term. Renting a forklift is feasible if the use of it for your business is only seasonal in nature and that is usually during the peak days of your business.

Leasing, on the other hand, is on a longer term. There are two types of leasing, the operating lease (similar to rental) or finance lease (asset is owned by the company at the end of the term). Either of the options, leasing or rental can be your avenue for experimenting on its pros and cons.

More often, warehouse managers opt to rent forklifts with different classes or model in order to compare one’s capacity and usefulness to the business.

Rentals though are usually more expensive in nature as compared to leasing or purchase.It’s because you are in charge of the maintenance costs.

Purchasing your own forklift

How about on the option of buying a forklift? It is best to purchase a forklift for your business if:

• • • Your company will most likely prefer to have its own forklift as an investment.
    • You have an existing credit line to support the purchase
    • The forklift is expected to serve your company for a long-term period, say 10-20 years.

Things to consider

Before deciding on whether to purchase or rent a forklift, consider some points as follows:

• • • Initial Cost: As mentioned, forklifts are expensive. It costs initially around $20,000. The higher the capacity, the price increases and could reach $100,000. Some business that is relatively small does not afford to invest in such huge amount. A second-hand forklift at a lesser price could be possible, but if your goal is its quality, then choose to rent in order to enjoy higher quality forklifts.
  • Duration of Usage: If the use of a forklift is only seasonal or on a project basis, then it's not cost-effective to invest. But if forklifts are used in the daily operations, then investing could be a more feasible option.
  • Operating Forklifts: If you have a business that requires regular use of this equipments, you need to consider getting a forklift training from a professional school. This website, for example, the master drive offers full course training for forklift and telehandler operations. Investing in the equipment is one thing, operating it is another.

Which option should you choose?

Leasing, renting, or buying a forklift has its own advantages and disadvantages. Some companies even combine all options as every option has its use to them.

In the end, your company’s decision will still depend on how useful it is to your daily operations, and how much money will your company is willing to invest.

Kate helps businesses build effective processes for vetting ideal clients and building a business that doesn’t take every hour of every day.