Deciding on whether to buy, hire or lease a forklift truck depends on the individual needs and circumstances of the company. In this blog we look at the pros and cons of hiring, buying, or leasing a forklift truck.
Hiring a Forklift Truck
- Hiring a forklift truck or a fleet does not need large upfront cash or easy access to borrowing. In the current uncertain times with Covid-19 pandemic, this is a major benefit. By not incurring a large upfront cost, you could spend more on other areas like increasing your workforce or spending more on marketing or production.
- Certain costs such as maintenance and repairs to the forklift truck are not your responsibility
- Hiring a forklift truck over the busy periods like Christmas to supplement your existing fleet could be prudent as no-one wants the equipment to be idle over long periods of time.
- If you need a specialist forklift for certain tasks or projects, then it would be cheaper to hire one over the specific period of time.
- Overall, hiring a forklift truck which is used continuously is more expensive than buying or leasing one.
- If you hire a forklift and change them regularly, the staff will need a period of adjustment.
- Forklifts are hired out to a number of clients and you may not get the equipment in prime condition compared to buying new or leasing.
- If you are not sure of your future requirements, either for specification or usage, it may be better to hire a forklift initially.
Buying a Forklift Truck
- Overall buying a forklift truck is the most cost effective long term option, especially if you operate multiple shifts, handle specialist products or have a steady predictable workflow.
- You can customise the forklift truck for your specialist needs
- By buying a forklift truck, you will be able to depreciate it, resulting in tax write-offs
- It will be an asset on your books
- When you want to change or upgrade your forklift, you can use it as collateral to finance the new purchase or you can sell it.
- Buying lets the employees familiarise themselves with the equipment and if you have the same fleet with the same brands and models, this will also help.
- To reduce costs, you can buy a second hand forklift truck
- Buying a forklift reduces flexibility as you are stuck with what you have bought
- Hire or leased forklift has to be returned in a certain condition as stipulated in the contract. However, if you own it minor nicks are not a major concern.
- Owning a forklift or fleet of them requires additional paperwork like the Thorough Examination .
Leasing a Forklift Truck
- Leasing is basically hiring for a longer term. It is usually cheaper than hiring but more expensive than buying
- Like hiring, the upfront cost of leasing is a lot lower
- You may also have an option to include maintenance package into your monthly payments. This will enable you to accurately track the total costs without having to account for any unforeseen circumstances.
- Generally, you will get a new forklift truck at the start of the lease and every time you renew and hence you will get an upgrade with the latest models
- You have the flexibility of upgrading to a different specification at the end of your lease, based on your current requirements
- At the end of the lease you also have the flexibility to purchase it.
- Like hiring, you do not own the forklift and hence it is not an asset on your books.
- Most lease agreements have a usage limit. If your usage is higher, you will have to pay extra.
- You are also relying on the lessor to provide timely service and repairs when necessary. Any delays will result in downtime.
In conclusion, whether to hire, buy or lease will depend on your individual circumstances. As mentioned above each has its pros and cons.
Wallace School of Transport is a fully accredited RTITB company with over 50 years' experience. You can be trained either at your own work site or at Wallace Centre in Park Royal. If you have any questions, call Wallace Forklift Training on 020 8453 3440, choose option 3 or click here to email us.