A forklift is an indispensable tool for several businesses. Heavy equipment investments in general tend to have high upfront costs. If you’re considering acquiring a forklift, there are a number of reasons why you should lease rather than purchase one.
Lower Upfront Cost & Simplifies Expenses
The main benefit to leasing is a low or zero upfront cost to obtain a forklift. This way, cash can be used in other areas of your business. Depending on the model leased, you can expect to pay a set amount per month which also simplifies the budgeting. Accounting for the expense can be easy. There are tax advantages for leasing, as it can be considered an operational expense.
Buying a forklift outright can be a high upfront cost, and the depreciation value can be difficult to calculate. Maintenance expenses can vary greatly, and it’ll depend on several factors such as usage patterns, make, model, and if it’s pre-owned or new. Leasing leaves a lot of the guesswork out of the equation and compiles everything for you, allowing you to focus more on running your business.
Forklift Leasing Including Maintenance & Repairs
Another cost-saving element of leasing a forklift is maintenance. Sometimes as part of the contract, a maintenance fee is established as part of the monthly lease price. A maintenance package ensures stability for your expenses, rather than large spikes if a key component breaks down.
Ensure you check with the lessor about the types of leases in which repairs can be covered. This is quite beneficial if you want your lease cost to be steady and predictable throughout the term.
Avoid falling Behind on Forklift Technology
By using a leasing option, forklift operators can embrace and test newer models with technological advancements. This can increase safety, productivity, and overall enjoyment. An increased replacement schedule of assets, like a forklift, keeps the average age of your fleet lower. This in turn leads to fewer breakdowns and business downtime. For your business, you can decide at the end of the lease term if the equipment is something you’d consider purchasing. Otherwise, there isn’t much pressure to commit to purchasing it if the new model didn’t live up to your - or the operator’s - expectations. Overall, it’s a great benefit to literally try it before you buy it.
More Flexibility Based on Business Needs
Leasing a forklift may give your business much-needed flexibility. Maybe you’re expecting or experiencing a sudden influx of customer demand. After this surge, what if the need for a forklift isn’t financially justified? That’s when leasing comes into play. It’ll be less expensive than renting and you’re guaranteed to have it leased for the duration. It’s great when you have a predictable period of fast-paced business use.
Another reason related to technology is the operation cost and size of the leased forklift. For example, it’s possible that the cost of a reliable battery-operated forklift is too expensive compared to a smaller, propane-powered forklift for you. By leasing a battery-operated forklift, it could help your business transition to a greener fleet with lower or equivalent upkeep costs, even with the lease cost in the equation.
Given the Option, Most Companies Lease
For the majority of businesses that have the option of leasing or buying, it’s more often better to lease. If you’re operating a fast-paced business that requires forklift operation of more than 1,500 hours per year, leasing tends to be more beneficial. If you’re confident that your forklift usage needs won’t diminish over the term, leasing will definitely be a solid option for you. Does the type of equipment change a lot at your worksite? If so, then leasing can help accommodate that, by having a steady flow of newer forklift equipment for specific tasks.
If you’re purchasing a forklift, a large investment into an asset may not look so good to investors or your business partners. That cost has to be logistically justified with depreciation costs in mind, which also can be unpredictable. Instead of one large capital expenditure, leasing helps them become smaller, trouble-free payments. It’ll greatly reduce bookkeeping and paperwork so you can budget your company’s finances easier.