Rent vs Buy vs Lease
Historically, renting forklifts has always been considered something you did short term, i.e. by the day, week or month.
In recent years renting has been gaining in popularity as a viable alternative to buying or leasing longer term, i.e. 12, 24, 36, 48, 60 or 72 months.
Here’s Why.
Advantages of Renting Forklifts Long Term, i.e. Beyond 12 Months
- One monthly payment includes truck, interest and negotiated maintenance costs
- Budgeting is much easier and accurate with one monthly payment
- Lines of credit or cash remain available for more important business costs, ie inventory
- Maintenance costs are now controlled and not subject to increases or overcharging by the dealer
- Supervisory time spent deciding on which repairs to authorise and issuing purchase orders is significantly reduced
- Supervisory time spent making sure planned maintenance and other repairs are completed on time is reduced
- Supervisory time spent approving repair invoices and running reports on forklift costs is significantly reduced
- Supervisory time spent justifying repair costs and tracking maintenance costs per forklift is eliminate
- Upgrading is decided in advance which eliminates exposure to costly major component repairs
- Dealer is now responsible for completing repairs on time and in accordance with the manufacturer’s guidelines
- The cost of parts, the labour cost per hour or travel time costs from the dealer are no longer relevant
- The cost of shop supplies, environmental levy’s or fuel surcharges may no longer be relevant
- Much easier to “trade up” into a different truck if business conditions change or if the truck is no longer suitable
- Forklift fleet stays up to date with the latest in cost efficiency, productivity and safety enhancements
- Customer employed resident forklift technicians can now focus on production equipment and facility maintenance
- Productivity gains should be realised from a more efficient, up to date, well maintained fleet of forklift trucks
- Liability exposure with your insurance company will be reduced
- Downtime costs may be reduced if properly negotiated with the dealer at the start of the rental period
- Financial return on assets ratio will be improved because the forklift asset is removed from the balance sheet
Applications Where Renting Long Term Makes Sense
- High hour usage, i.e. 1500 hours per year or more (possibly less depending on the circumstances)
- Abusive applications, i.e. Fish processing, stevedoring, mining, foundry, tannery, chemical / fertilizer plants etc.
- New business or new application start up, i.e. Limited credit, not sure what truck is suitable over the longer term
- Employee challenges, i.e. expertise and time to control and track maintenance and other forklift costs are limited
