Negosentro | Forklifts – Whether to Buy or Rent for Your Business | Forklifts are expensive machines. In fact, they are the second-largest expense after employees in a business. That is why as a business owner or manager, you have to decide whether to buy or rent a forklift(s). Whether you decide to buy or rent a forklift, the decision will affect your business financially. And depending on the nature of your business, both options could have a negative or positive impact on your business. For this reason, you must support your decision with facts. To do this, you will need to conduct a cost-benefit analysis on your business.
In this article, you will understand the difference between buying, leasing, and renting a forklift and how you can make the right decision for your business.
Renting and Leasing a Forklift
Renting and Leasing a forklift are somewhat related. There is just a small difference between the two. In most cases, renting is short-term, maybe a few weeks or months.
If you are thinking about buying a forklift but are not sure, then renting is the best option for you. Renting gives you the opportunity to experiment with the machine. During the rental period, you can assess the capabilities of the machine as well as find out how the dealer responds to machine breakdowns.
Do you have a hypothesis you want to try it? (i.e a new method of picking) Rent a forklift for a few months and compare its performance with that of your existing machines. This will help you decide whether to buy a new machine or stay with the ones you have.
Another good time to rent a forklift is during the peak seasons. You might be having a few machines of your own, but they are not enough to sustain your business during this period. In this case, you will need to rent a forklift. Similarly, if your business is seasonal, you do not need to buy a forklift. It will end up rotting in your parking during the off-peak season. You just need to rent during the peak seasons and return the machine(s) to the dealer during off-peak.
Who can Rent a Forklift(s)
There are so many industries that prefer renting to buying a forklift. These are:
Pros of Renting a Forklift
The maintenance cost is included in the rental price: the dealer covers the cost of repairing the machine in case of a breakdown.
- You can experiment with the machine
- You have the chance to operate an expensive machine at a low cost
- Saves money
- It’s a solution to your short-term equipment needs
- Saves time
- Increases temporary production
- Increases overall productivity
- Makes it easy to manage on-demand resources
Cons of Renting a Forklift
- In most cases the maintenance service is poor
- You will be penalized in case of overuse
- You lose the chance to purchase the machine
When it comes to leasing, the cost will depend on a number of things. One of them is the value of the machine. For instance, a forklift worth $25000 will cost you $600 per month and $1100 per month for a machine worth $50000. Apart from the leasing cost, you will have to incur an additional cost of maintaining the machine to your overall price. One advantage of leasing a forklift is that unlike renting, you can still buy the machine after the lease period has expired.
Pros of Leasing
- You get tax advantages because it is a tax-deductible operational expense
- You get the latest technology- you can replace your machine with a newer one
- If you like the machine, you can buy it
- Low initial costs
- Improved productivity
Cons of Leasing
- Cost of leasing is higher especially if you decide to buy the machine
- You will be penalized for overuse
- The maintenance service is poor- make sure you investigate your dealer before you commit to any lease agreements.
- You cannot use it as an asset to borrow against because the dealer maintains the ownership.
Buying a Forklift
Although forklifts are expensive, buying one can be a good investment depending on the business. For example, if you have a full-time business and the need for a machine is long-term, you need to invest in a forklift. Renting is a too expensive option for you.
Buy a forklift if:
- You have the intention to own all your capital equipment
- Your business can afford or has good credit options
- Your business is stable and needs the machine for long-term use
The decision to rent or buy forklift Sunshine Coast is not an easy one. Making the wrong choice is enough to bring your entire business. But if you make the right decision, your business can hit new heights you never imagined were possible to reach. Take your time to weigh out the options and make the decision that best suits your business.