Should I Rent or Buy a Forklift?
by Dana Bowen, on November 25, 2019 at 5:30 AM
Forklifts are a significant investment for any business - determining whether to rent or buy the next addition to your fleet can be a difficult decision to make. When new equipment needs arise, you must consider not only the current financial status of your company, but also how the forklift will be used. To better understand this question, here are three key questions to ask yourself when deciding whether to rent or buy a new forklift.
Can my business afford larger upfront costs?
This first question is a very revealing one: purchasing a new forklift requires a significant outlay. Long-term and short-term rentals can allow for greater relative cash flow in your operating budget, freeing up capital for other needs. However, there are tax advantages like the popular Section 179 tax deduction to consider when evaluating whether to buy your next forklift.
How often will the equipment be used?
Beyond the financial aspects of acquiring new equipment, it’s important to be clear of how this forklift fits into your fleet and business plan. If the new forklift is integral to your business and will be used consistently, purchasing could make more sense as a long-term. If, however, this is for a more specialized or short-term seasonal need, such as an adjustable wheel-base forklift, renting might make the most sense for your business.
What maintenance costs do I anticipate for this forklift?
Finally, determining the total cost of ownership for your forklift is essential. When deciding whether to rent or buy a new forklift, maintenance costs are key to calculating the total cost of ownership. Rental equipment has much lower maintenance costs due to the nature of short-term contracts. Purchasing equipment means that your business is responsible for all maintenance, contributing to a higher overall cost of ownership. Be sure to calculate the cash flow costs of refreshing your fleet periodically to maximize the economic life of your forklifts. Compare that total cost to the cost of repeated rentals for speciality equipment to determine whether purchasing might save your business money over time.
Ultimately, there are benefits to both renting and buying forklifts for your fleet. Based upon your unique financial situation and business needs, the right solution can vary. At MidColumbia Forklift, we’re happy to help you find the right equipment and purchasing solution for your business. Contact us today to see how we can help meet your material handling needs.