Choosing whether to hire or purchase a forklift is a critical decision for any business. Except for your employees, heavy equipment like forklifts are likely to be one of your greatest expenses. If you’re looking to reduce your material handling costs, it will be critical that you choose the right arrangement for your heavy equipment.
Fortunately, businesses have the option to purchase, lease, or rent forklifts depending on their needs. But, how can you be sure that the arrangement you’ve chosen is the ideal one for your business? Today, we’ll cover everything you need to know about the pros and cons of hiring or purchasing a forklift.
Short-Term Forklift Hire
For many businesses, a short-term hire arrangement makes the most sense for their needs. Renting allows a business to address its short-term needs with a relatively cost-effective solution. Any maintenance and service costs are also built into the price of the equipment. Once the project is complete, the rental is returned, and no additional costs are incurred.
Short-term hires are also ideal for special cases. For example, you need equipment at a remote job site for several weeks. Or, you’re auditing operations within your warehouse, and you need new equipment to experiment with different picking methods. Whatever the case, short-term hire is a low-risk way to acquire the equipment you need.
Renting is also an excellent way to access the capabilities and service of an equipment provider. With a short-term rental, you can see how a dealer responds to service and repair needs before deciding if you’d like to purchase or lease equipment from them.
Perhaps the largest reason why companies opt for short-term forklift hire is seasonality. Many businesses experience a significant seasonal rush, where they must rapidly ramp up operations. Once the rush has passed, the short-term rental equipment is returned, which eliminates ongoing rental and storage costs while providing additional flexibility for your company.
Downsides of Short-Term Hire
There are a few drawbacks you’ll need to contend with when opting for short-term hire, and they might be large enough for you to consider alternatives.
The first drawback is cost. Short-term rentals are the most expensive of the three arrangements. A business offering forklifts for hire has a fleet of equipment at any time, most of it is sitting idle, awaiting hire. The high cost of a rental helps pay for the expenses of the unhired machines. Maintenance costs are also built into the price when you hire a lift, further raising the bottom line.
Another area of concern is the quality of equipment you’re receiving. Renters don’t exercise the same care with a rental as a machine they own or lease, so it’s common for a rented machine to be riddled with dents, dings, and quirks that you wouldn’t have with a long term hire, or purchase.
Long-Term Forklift Hire
Long-term hire or leasing is fast becoming the most popular way to obtain fork trucks and other equipment.
Leasing equipment has many tangible benefits, including lower upfront costs, flexibility, and constantly updated equipment.
Compared to purchasing a forklift outright, leasing requires a smaller initial investment. The initial cost is lower, but you’ll be receiving the same brand new equipment. Having new equipment also allows you to operate more efficiently than you would be with an ageing forklift, and you’re guaranteed a new fork truck each time you renew your lease.
At the end of your lease, you also have complete flexibility. If you love the machine, you could choose to purchase it outright. Otherwise, return it for a newer model, or switch to something altogether different.
Many dealers also allow you to build a maintenance package into your monthly payment, so you can more accurately track the total cost of the equipment without having to account for unforeseen circumstances.
Downsides to Long-Term Hire
Long-term hire does have some negatives that may make an outright purchase a better fit for your business.
The most obvious downside is that you don’t own your asset, you’re merely paying a substantial fee to use it. Most leasing agents also impose usage limits on their equipment, similar to the mileage restrictions if you lease a vehicle. If you put more hours on the forklift than your leasing agreement allows, there may be significant costs. The last issue can be a negative or a positive, depending on the company. When you lease a fork truck, you’re also putting your faith in the leasing agent to efficiently and properly provide service and repair when necessary. If the company is slow to make repairs or perform maintenance, it can result in costly downtime.
Finally, if you would like to get more information about the rental options available to you, do get in touch with our team. We are a leading provider of forklift hire services in Leicestershire, Nottinghamshire, Birmingham, Northamptonshire, Warwickshire, Derbyshire, West Midlands & East Midlands.
Buying a Forklift
Buying a forklift does present some advantages you can only realize through purchasing equipment.
Businesses with lots of capital on hand or access to inexpensive lines of credit may find that purchasing a forklift makes the most sense for them. When you purchase one outright, you’re able to add that asset to your books. You can also borrow against your forklift for other purchases, or sell it to finance new equipment in the future.
Over the lifetime of the fork truck, buying the machine outright will prove to be the least costly arrangement of the three. You can also buy a second-hand lift truck, which further reduces your investment costs.
Downsides of Buying a Forklift
Purchasing a machine outright does have some drawbacks.
For one, purchasing a forklift represents the highest upfront cost of any arrangement. Depending on the model you choose, a forklift can easily cost upwards of £30,000. Purchasing a forklift also eliminates the flexibility that comes with short or long-term hire arrangements.
If you need more help on deciding whether buying forklifts is the right decision for your company, do get in touch with our team at Angus. We offer forklift sales services in Leicestershire, Nottinghamshire, Northamptonshire, Warwickshire, Derbyshire, Birmingham, East Midlands, and West Midlands.
Final Word
At Angus Lift Trucks, we know that choosing between owning or leasing a forklift is a personal decision, and the correct answer will depend on the unique needs of your business.
There’s something to be said about owning these assets. Still, many large companies are choosing to forgo that leverage for the flexibility and ease of for hire equipment.
As you decide on the best arrangement for your warehouse, consider your current needs, and how you expect them to change over the next twenty years. Meet with the stakeholders on your team to get their input, and choose the arrangement that will deliver maximum value for your company.
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