Forklift trucks are an essential tool for many business owners all over the world. Both major and modest-sized companies rely on them daily to operate safely and efficiently, so whether you’re in the market for a brand new fleet or perhaps require your first ever model for a new and growing business, a forklift truck is certainly one of the best tools at your disposal.
As with any much-needed business tool, however, forklifts can also be pretty expensive, so it’s important to know how cost-effective they will be for your individual business needs. Every business strives for an increase in productivity, but cutting costs wherever you can is also a no-brainer, and depending on your company preference, it may turn out to be more beneficial to either hire or purchase your forklift trucks outright.
Unsure about whether a forklift rental or purchase is best for your business requirements? Take a look at our brief guide below to see if we can help you in your consideration. We’ve done the heavy lifting – so to speak – and outlined some of the benefits and downsides to both renting and buying your forklift trucks outright, so you can make the choice that’s right for you.
Why Hire A Forklift Truck?
Hiring rather than buying your forklift trucks upfront can be a great solution for many business owners, as it provides greater flexibility. Perhaps your company is in need of a forklift for a specific period such as a seasonal peak or whilst working on a short-term basis with a particular client. After all, why have an expensive piece of equipment sitting idle if you know you won’t need it regularly?
If you’re prepared to pay the maintenance and insurance costs that come with a rental agreement, a hired forklift can also have the added bonus of letting you experiment with the latest technology – perfect for small businesses looking to try and test new productivity measures. Read on to see whether hiring a forklift truck (or a fleet of them) may or may not be the right choice for your business:
Benefits Of Hiring:
- Having lower (initial) costs: Perhaps the most attractive benefit of hiring (especially to small businesses) is the fact that you can make use of expensive equipment without paying the full costs upfront. Companies pay for what they use, so whether you enter into a 3 or 5-year rental agreement with your forklift dealer, you’ll have a clear view as to what you’re spending from the word go.
- A boost in productivity: Choosing a contract hire agreement to supply your business with forklifts will mean greater productivity since regular replacement machines will reduce the risk of downtime due to ageing equipment. An efficient labour workforce is only as good as the tools they’re provided with, and up to date models will give them (and your business) the best chance of success.
- Fixed costs help with budgeting: The last thing any company needs (particularly small and first-time businesses) is to be hit with surprise fees. Thankfully, renting a forklift prevents this as you’ll be provided with a fixed costing schedule – allowing you to budget confidently.
- You can try out the latest tech: Renting from a forklift dealer gives you the opportunity to experiment with the newest technology on the market, giving you the advantage over your competitors who could be using outdated, less efficient forklift models.
- Option to upgrade while hiring: Unlike sticking with a bought and paid for model of forklift, being under a rental contract with a forklift dealer allows you to upgrade or switch to a different truck as and when your needs change.
- Temporary solution to breakdowns/busy periods: When your business is experiencing an unforeseen high demand or you’re faced with a broken or faulty forklift in your fleet, a rental replacement can be a great short-term rescue, ensuring you meet your deadlines (and possibly with greater productivity too)
Downsides Of Hiring:
- Higher long-term costs: As flexible as a rental option may be at first, the hard facts are that it will cost your business more in the long run. Deciding to purchase your rented model at the end of a lease agreement, for instance, will run up greater costs than if you had simply purchased one from the start.
- Can incur penalties for over-use: Most rental agreements will typically include a clause that covers the hours you are contracted for on each vehicle, and if you exceed those, you are liable to pay a penalty. The over-use of forklifts can happen more easily than you might expect too, especially during peak business periods.
- Unable to make personal modifications: While you’ll have the option to fully upgrade, not owning the forklift outright will mean being unable to make adjustments or add/remove certain parts as needed.
- You won’t have an asset: Owning your own forklift gives you the freedom to resell or rent out to someone if you please. With no asset of your own to borrow against, a rented forklift provides no such financial security and breathing room.
- You are liable for damages: The cost of the equipment being stolen, lost or damaged comes straight out of the company pocket. As a result, extra care and maintenance need to be taken on your part to protect the truck (or fleet of trucks) from things like frost damage in winter etc.
- Chance of poor maintenance service: Unless you can be sure that the hire company has a good reputation, there could be a chance of average or possibly even poor maintenance. Since the service is provided by the dealer themselves, repairs may not be carried out at the speed or quality you’d appreciate. Be sure to investigate leasing companies thoroughly beforehand.
Why Buy A Forklift Truck?
Having a forklift truck your company owns outright can be a great investment. In spite of the initial high cost, having a fleet of forklifts or even a single, reliable model is a worthwhile piece of machinery to have in your corner.
If it makes sense for your business, forklift ownership can eliminate a lot of the headaches associated with leases and terms set by outsider contracts – allowing you to focus on making the best use of the trucks, as and when you please. To give you a better idea of the commitment behind purchasing a forklift, we’ve highlighted some of the key pros and cons below:
Benefits Of Buying:
- An added asset to your company: Owning a forklift outright counts as another asset to the company name. It also grants you added security should you need to offset a large one-off payment towards a tax debt.
- Freedom of use: As the rightful owner of your forklift or fleet of trucks, you are not tied down by any clauses or penalties and can use the vehicles as and when you please, avoiding the hassle of hiring for short-term work.
- Reduced costs for light business operations: If your business requires light lifting duties and boasts a clean work area, purchasing a forklift may be a better choice in the long run when you consider the lower repair costs and high residual value if used in a clean, simple working environment.
- Can benefit staff training: If your business is using the same model of forklift, training your staff to operate them becomes a breeze as they all become familiar and confident with it, and a workforce singing from the same hymn sheet can only mean greater productivity for your business.
- Buying pre-owned can aid short-term cash flow: Not every small or medium sized business can spare the upfront capital for a brand new fleet of trucks, so if this is the case for your company, purchasing a reliable pre-owned forklift can be a great way to spare much-needed start-up funds.
Downsides Of Buying:
- Large upfront capital investment: There’s no two ways about it, buying your forklift (or fleet of forklifts) outright means parting with a lot of capital in one fell swoop. Assuming your business is stable and you anticipate using the forklifts for more than 10 years, then this can be a risk worth taking.
- The risks with refurbished models: Buying pre-owned and refurbished forklifts is a common practice by businesses to save money, but buying a revamped model is not without its risks. Some vehicles may be fixed with low-quality parts or may even be outdated, hazardous model passed off as fully refurbished.
- End of warranty costs: Once your fleet of forklifts has reached the end of their warranty period, any unresolved repairs will be waiting to sting you in the company pocket.
- Can’t adapt to all working environments: Owning a specific type of forklift (i.e. a specific weight or lift capacity) will be restrictive if your operating environment should change. Unless you’re confident that your forklift needs won’t change for your business, this can be an issue.
- Being stuck with obsolete equipment: A major disadvantage in terms of productivity is the fact that a brand new forklift you own outright today will soon be outdated and inefficient by current market standards.
Ultimately, the choice to buy or hire forklift trucks will come down to your unique business needs, your budget and your personal preference. Hopefully, our above guide to the hows and whys of hiring or buying a forklift have helped shed light on which will be the right choice for your company.
Have any further questions about buying or renting forklifts? Our expert team is happy to answer any queries you might have about everything from the hiring and purchasing process to the forklift equipment itself. Get in touch with us today for further advice.