In this article, we explore the pros and cons of renting a forklift and buying one. Which is better for your company’s specific needs?
Should you buy or rent a forklift? What’s the best thing to do? Well, there is no correct or wrong answer to this. Truth is, there are pros and cons for buying and renting. It’s your individual needs as a business and operations that determine if you should rent or buy.
How many forklifts do you run in a day?
The answer to this question will make it clear if you need to buy or rent a forklift. However, there is a number of other variables that should be considered before you rent/buy forklift.
These factors include evaluating your financial capabilities, and cost of renting v/s ownership among other factors. With all these different variables, it’s best to understand the pros and cons to help you decide which is better for your business needs.
Pros of Buying a Forklift
Once the sale is complete, you’ll own the forklift, so you can make any modifications necessary. Maintenance is your sole responsibility, which means you have to ensure problems are fixed immediately.
You don’t need to wait for the forklift rental company to address mechanical problems or need permission to make modifications. Since you’re the owner, you can sell the forklift once you’re done with it, giving you an opportunity to recover some of the initial cost.
2. Tax Incentives
Do you know what section 179 of the IRS Tax Code says? It allows you to fully deduct the cost of some of the newly purchased machinery in the first year. If your forklift fails to meet the threshold, you may file for depreciation deduction for it.
3. No Usage Limits
Since you own the forklift, you’re free to use it at any time without any obligations. With a rental, you are generally billed on the number of hours you us the lift.
Your own employees will also have a better opportunity of mastering it since it’s at their disposal any time.
Cons of Buying a Forklift
1. Higher Initial Cost
You’ll be required to meet a higher initial cost that may be difficult to budget. You may find it also difficult to pay for the forklift all at once.
The higher initial cost may make it impossible to buy the model you want and may force you to buy a lower-cost option.
2. Maintenance Cost
You’re solely responsible for all maintenance cost, and this can be high depending on the mechanical issues at hand. You could end up burdened with a broken forklift that you can’t sell or return.
Does your forklift warranty cover repairs? Keep an eye to know for how long it’s covered.
3. Getting Stuck with an Outdated Model
Even though ownership is probably the biggest advantage to purchasing a forklift, it can also be the main disadvantage. If you buy a high-tech forklift, you run the risk that the machine may become technologically obsolete down the road.
What happens when a forklift becomes technologically obsolete? You’ll be forced to buy a new forklift long before you had budgeted for.
Pros of Renting a Forklift
Renting a forklift gives your business significant flexibility with its operations.
If your business is experiencing a decline in business or rapid growth, you can easily remove or add a forklift rental from your fleet.
2. Predictable Monthly Spending
Some rental companies include the cost of forklift maintenance as part of the monthly rental fee. This is known as the maintenance package. What’s the benefit of buying a maintenance package? It makes it easy for you to budget since you don’t have to deal with any unpleasant surprises from forklift breakdown.
3. Test New Equipment
By utilizing a rental program, you can test new models without having the obligation to buying it. After the rent term, you can decide whether to buy your own or rent it once more.
4. Improved Productivity
Most rental programs have frequent replacement schedules aimed at reducing the average age of their client’s fleet. This gives you an opportunity to have relatively new fleet, hence reducing downtime and boosting the likelihood of peak efficiency.
5. Regular Equipment Replacement
Renting allows for regular equipment replacement. This means you have a chance to use newer models of forklifts. Your employees will enjoy the safety and productivity benefits associated with newer models.
6. Lower Initial Costs
Renting helps your business benefit from the high performance of newer technologies without incurring the cost of buying it.
If your business is new, you don’t have to incur the high cost of buying forklifts. This flexibility makes it easy to scale your business and offers you room to make adjustments.
If your needs change at any given point in time, you can easily request for a different type of forklift.
Cons of Renting a Forklift
1. High Monthly Cost
Renting a forklift is likely to have a high monthly cost compared to buying a forklift.
The rental company charges for their equipment since they incur the cost of repairs and depreciation. They have to account for all these expenses and that’s why the monthly fee of renting forklift is usually higher.
2. It Doesn’t Cater to Specialized Needs
A forklift’s rental company usually supplies the most common types of forklifts. What happens if you have a specialized need? You’ll have to buy a forklift.
3. Where Is Your Business Located?
Have you considered the location of your company before deciding to rent? If you don’t have a rental provider near you, or your business is located far from a metropolitan region, you may incur huge transportation costs for delivering and picking up the forklift.
Therefore, it’s advisable to buy your forklift if your business’s location is a challenge.
4. There Are Allowable Hours of Usage
Some rental companies specify the maximum usage hours. What happens if you exceed a maximum number of hours allowed? Violation is likely to attract penalties.
Fully Understand Every Pro and Con before Renting a Forklift
Considered alone, any of the above pros or cons could be the determinant factor in your decision.
However, you should take each pro and con into consideration and fully understand each before renting a forklift or buying.
That means, for instance, comparing the relative cost to your business needs or your potential maintenance services might outweigh the cost of your location (or vice versa).
Whatever your decision, just ensure you have a committed forklift rental partner who will make your rental experience more beneficial. Are you looking for products and service for material handling? Contact us today.