How To Decide Between a Forklift Lease and Purchase
Forklifts are a major investment. The decision to rent, lease, or buy a forklift will impact your operations in the long term. The cost-effectiveness of a forklift lease or purchase depends on your unique situation. Do you need an entire fleet or just a few lift trucks? Do you want gas-powered or electric forklifts? With material handling equipment becoming stronger by the year, it’s a good idea to reconsider how you purchase forklifts.
The best thing warehouse managers can do for their fleet is take the time to evaluate the advantages and disadvantages of purchasing, leasing, or renting a forklift. Understanding factors like the maintenance cost year by year for a forklift makes the decision simpler. Keep reading if you’re unsure where to start with your cost analysis.
Forklift Rental Costs and Benefits
Rentals are a short-term solution. Renting a forklift can last from a few weeks to several months. When you have a seasonal peak and need to move more freight than usual, it’s a good idea to rent a few lift trucks to meet the demand. The cost to rent a few forklifts to bolster your numbers during the holiday rush is worthwhile if you don’t need permanent assets.
Renting gives warehouse managers the flexibility to experiment. Rental costs for forklifts are often paid on a month-to-month basis, during which you can swap equipment with your dealer. If you want to try out a new type of forklift without buying one, renting the machine for a week or two allows you to test whether the lift truck is compatible with your fleet.
Rentals are more expensive than the purchasing or leasing options because the forklift rental price includes the maintenance cost and the time that the lift truck is idle at the supplier before dispatch. You also rarely have the option to purchase a rental from the dealer. The machine heads back to the dealership as soon as you stop paying the forklift rental cost.
How Much Is It To Lease a Forklift?
Monthly leasing payments vary depending on the type of forklift and the lease term. For example, a forklift with a value of $25,000 could cost around $600 a month to lease. Much like the cost to rent, maintenance fees can be included as part of the monthly leasing payment. With the ability to pay for forklift maintenance ahead of time, you can forecast your budget more accurately.
The forklift leasing option reduces downtime by providing a predictable replacement cycle. When you sign a lease term, you set the number of years for the agreement. You can match the replacement schedule to your unique needs, increasing productivity and efficiency at your facility. Leases also have a tax advantage—in most states, leasing is a tax-deductible operational expense.
Do you need assets to help with the seasonal rush? HTX Material Handling offers advanced industrial technology to help you meet demand. Contact us today to learn more.
Common leasing options include:
- Operational Lease – This forklift lease option offers the lowest monthly lease payment. Known as a non-ownership lease, it’s structured to maximize use and productivity and comes with a tax advantage. Because the lessee isn’t the lift truck owner, they can claim monthly lease payments as an operational expense.
- Capital Lease – Capital leases are like a loan. The asset is considered the lessee’s property. A capital lease is a long-term forklift leasing option that’s best used for machines with a long economic life and low risk of failure.
Much like the cost to rent, leasing a forklift is more expensive than buying the asset. If you decide to purchase the machine at the end of the lease term, it’ll cost more than if you’d bought it outright beforehand. Leases can also restrict the hours of usage. If you exceed the agreed-upon limit, you pay the penalty.
Before entering an agreement with a leasing company, make sure you understand the service details. Take the time to investigate the dealer’s repair and planned maintenance capabilities. Entering a forklift leasing term is a significant decision. You want to partner with a supplier who can help you avoid downtime.
Is a Forklift Purchase Worthwhile?
Buying a forklift is your best option if you want total ownership. If your company is stable and plans to use the lift truck for at least 20 years or you need the asset on your books as capital equipment, a forklift purchase is recommended. As an owner, you’re free to customize your forklift to your liking with modifications and other installments.
You also have the option to resell your lift truck, which can increase your return on investment if you’ve kept the machine in good condition with routine forklift maintenance. There are many ways to approach a forklift purchase. Evaluate your situation and review your company’s policies to find the best match.
HTX Material Handling Offers a Wide Variety of Forklifts for Rental and Purchase
Do you value quality, durability, and longevity in lift trucks? HTX Material Handling offers high-quality industrial equipment from top-of-the-line brands. Our rental equipment exceeds industry safety standards and can accommodate your facility’s specific needs. We update our inventory with state-of-the-art technology to ensure you get nothing but the best. If you prefer to own your assets, we offer machines from Hubtex, Baoli, and Linde.