Whether you decide to buy or lease a forklift, it all comes down to the particulars of its application and the preferences of your business. Let’s be honest, forklifts are expensive. Right next to your employees, forklifts will probably be your largest expense, even if you are using used forklifts in Sydney.
As a new business owner, the core part of your job is to look at ways to measure the costs and try your best to reduce them. With the financial tools becoming more and more advanced and hard to understand, and the material handling equipment like forklifts becoming costlier and complex, it may be the best time to rethink the way you purchase large equipment for your business.
Keeping that in mind, should you buy or lease a forklift for your company? Let’s have a look at both the options.
Renting and Leasing Forklifts.
Before we begin, it may be a good idea to understand when you should acquire and lease new equipment for your business.
Leasing and renting are almost the same. Rentals are usually short term in nature, let’s say for about a week or few months. The biggest advantage of renting out large equipment like a forklift is that you get to experiment and learn about it. If you are not sure how good the equipment is from a particular dealer, it is always a good idea to rent it out and test it to see how the manufacturer or dealer responds to mechanical issues.
Perhaps you are entering a peak season and you know that you’ll need additional equipment to meet the demands of your customers, rent out a forklift for a couple of months instead of buying one.
But keep in mind that renting in the long term is actually more expensive than buying the equipment itself.
Leasing the forklift, on the other hand, means that by the end of all the payments, you will be able to acquire the forklift for your business. This is a good option if you know that you’ll permanently need a new forklift for your business.
Depending on the requirements of your business, sometimes purchasing a forklift is better than renting or leasing. For example, if you intend to use a forklift for just an hour a week, leasing it would really not make much sense. Why not buy a used forklift instead and save big on costs?
But make sure you have no intention of changing the use of the forklift and it will usually last two decades. You also need to make sure that you have enough cash on hand to purchase it. Every company has its own policies and it is important to talk to your partners or financial advisors before taking the move.
Buying vs Leasing – Which is Best?
If you look at the Fortune 500 in America, you’ll realize that more and more companies are leasing forklifts instead of buying one. This is because it is more important these days to match your costs with revenues. Leasing gives you the opportunity to keep testing new technology every few years.
Since every company has different needs, it would be really hard to conclude on either option. Look at your financial status, your operational needs, customer demands, and other factors, then make a decision.