The decision of when to rent versus buy a forklift for your business rarely is the same for two companies. You have a unique set of circumstances, budgetary restraints and business needs that will make buying or renting the better option for you.
So, should you buy or rent? If you choose to make a purchase, is new or used the better choice? Evaluate the pros and cons of each to find the right way to acquire material handling equipment for your business.
Buying a New Forklift
Are you thinking about buying one or more new lift trucks for your company? You may find buying a new forklift to be your best option, depending on your operation’s requirements and your budget.
Benefits of Buying New
The perks of buying a new forklift include both practical and financial benefits. If your business has the right requirements, you can enjoy gains like:
- Customization: The newest lift truck models have a variety of options and technology to improve efficiency. When you buy a new forklift, you can choose which of these add-ons to include, giving you customization power over the vehicle even before it leaves the dealer.
- Tax advantages: When buying a new lift truck, despite inevitable depreciation, you also can deduct the depreciation costs from your taxes, giving you the advantage of owning a new forklift. To ensure that you get the correct tax advantages from your purchase, consult with a tax attorney or business tax preparer.
- Additional assets for your company: Your company gains assets from your addition of new lift trucks. At the end of their usable life, you can sell them off and use the money toward the purchase of new forklifts. You might get more money from selling equipment you purchased new compared to one you bought used, especially if the former is still in good condition when you sell it.
- Warranty coverage: New forklifts often come with robust warranties that cover the costs of repairs or part replacements for several months. You could save a significant amount of money if you need to take advantage of the warranty coverage for your fleet of lift trucks.
- A better long-term investment: Over time, you will spend less on the purchase of a new lift truck compared to renting the vehicle for the same amount of time. Plus, you gain an asset that you can later sell, which you cannot do with a rented forklift.
- Less downtime and lower maintenance costs: New lift trucks do not have preexisting issues, allowing you to use them for heavy operation for a long time before they begin to show signs of wear. With better performance from your new forklift, you have less downtime, which allows you to get more done at work.
Drawbacks of Buying New
Be sure to consider the initial cost of buying new and the good credit needed to qualify for loans. Also know that new equipment depreciates once you buy it.
When You Should Consider Buying a New Forklift
There are several situations in which buying a new forklift is the best solution for a business. These include the following:
- Need to purchase a customized lift truck: If your business requires the ability to completely customize your lift trucks, you should buy them new. These new vehicles will have customization options you can order from the dealer to suit your company’s needs.
- Require specialized accessories only available on new models: If you require specific mast heights or accessories, you may not be able to find those with rental or used forklifts. Getting a new lift truck will be the fastest, easiest way to find the customized forklifts you need.
- Have heavy use requirements for your forklifts: Companies that use forklifts daily throughout the year instead of seasonally will have a better return on their investment in new models. Heavier use of your fleet will put the trucks under more stress. Good warranty coverage and reduced downtime with new material handling equipment will allow your employees to use the lift trucks frequently for a long time before the machinery begins to show signs of wear and needs extensive or frequent repairs.
- Want the option to match all forklifts in your fleet: Many companies choose to have the same make and model for all fleet vehicles, including those used for materials handling. That helps standardize processes like training and maintenance schedules. New forklifts make matching existing fleet vehicles simpler due to your ability to customize each order.
- Need the tax advantages of buying new material handling equipment: If you want the tax advantages of buying new equipment, you should purchase new forklifts instead of renting them.
Buying a Used Forklift
If you want the perks of buying a forklift but have a stricter budget, you may decide that getting a used lift truck is a better choice for your company. Used forklifts have unique benefits and drawbacks compared to new models. If you will own your lift trucks, you still need to decide whether new or used models are right for your company. Weigh the following advantages and disadvantages of used forklifts to see if you should opt for this type of vehicle.
Benefits of Buying Used
Benefits of a used lift vehicle include a lower initial cost and being able to get the forklift faster than choosing a new, customized model. These perks make a used lift truck a better choice than buying new for many businesses.
The greatest benefit of buying a used forklift is the cost compared to a new model. You will not spend as much on a used machine as on a new one, but you still will own the lift truck for the rest of its operating life. By owning the equipment, you can use it as needed without worrying about rental contracts governing usage.
Another benefit of buying a used piece of equipment is the ability to get it immediately. Unlike new models that may require time to add customized options, used models are ready for purchase and delivery to your facility as quickly as possible.
Drawbacks of Buying Used
The drawbacks of getting a used forklift depend on where you make your purchase. You could end up with a poorly functioning lift truck or one that has a dramatically shortened life span.
1. Quality Considerations
Buying a forklift from an individual or another company does not come with any guarantees about the quality of the equipment. Avoid getting a lemon by sticking to dealer-approved sellers. Often, these sellers will only choose used equipment from trusted brand names in good condition to sell.
2. Accessory Compatibility
Also consider that you may not get the newest accessories, as most used lift trucks come from previous years. Depending on the model year, the used lift truck you purchase might not necessarily adhere to the latest safety requirements. Always check the model against the newest regulations to ensure you get a compliant piece of equipment. A qualified dealer can help you meet these requirements.
3. Decreased Life Span
With heavy use, used lift trucks often do not have the same life span as new models. This factor may be fine for some operations that only plan to use forklifts for a few years before replacing the fleet or branching into new operations that mean getting different equipment.
When a Used Forklift Purchase Might Be the Best Option
While cost may be an important factor, do not let it become the sole reason you choose a used lift truck over a new model. The best situation for buying a used lift truck is when you have a facility that requires light use from the equipment, like less than four hours daily, and you have access to a trustworthy seller of quality used equipment.
Renting a Forklift
Forklift rentals are a highly popular option for many companies that may want to try out new models, need seasonal lift trucks or must supplement their fleet at times. As you would when buying a used forklift, find a reputable rental company that will offer quality material handling equipment and supportive maintenance.
Whether you should choose rental for your lift trucks depends on your operations and if you need a short-term option for your business.
Benefits of Renting
Pros of forklift rental include the following:
- Savings on maintenance and storage: The savings offered by renting material handling equipment come from not needing to pay for maintenance or off-season storage. These savings can accumulate, making renting a financially viable option for many.
- Low financial investment: You rent the equipment for as long as you need it, creating a lower financial investment than if you chose to buy the lift truck. You will not shoulder the burden of depreciation of the equipment when you rent, either.
- Fast access to forklifts: You might need to wait for customized newly bought forklifts from the manufacturer or dealer. When you rent, you get the equipment faster because the rental company has the options on-site. When you find your company has an immediate need for one or more lift trucks for your fleet, you can find them fast through rental.
- Ability to use highly specific equipment: Sometimes, you may need to use a specific piece of material handling equipment for a short time. For example, you might have a brief period of needing a higher capacity forklift or one with a taller mast for a job. Renting lets you use these specific types of equipment without paying the long-term costs of purchasing them.
- Options for renting attachments: If you already own forklifts for your company, you can rent attachments to suit temporary needs or to decide if you want to invest in them. Attachment rentals give you the option to try the tools before you buy them, saving money over time. You could also rent attachments for your rental fleet, giving you customization options.
- Flexible use calendars: The ability to flexibly use lift trucks only when you need them most is the biggest perk of renting. You can add vehicles to your fleet during heavy-use seasons or only use lift trucks at specific times of the year without storing extra equipment or maintaining it when not in use.
Drawbacks of Renting
Renting a forklift comes with considerations, including the cost over time and the hazards of not choosing a good rental company.
1. Additional Fees
You also have to use extra caution with any rented equipment to avoid incurring additional costs. Compared to purchasing a lift truck, renting can cost more over time if you need the equipment long-term, though you do not need a down payment or financing. Rental costs also may vary depending on where you acquire the equipment from.
2. Company Reputation
Your choice of a rental company is vital to your experience. Choosing the wrong provider could mean you have a poorly maintained lift truck to use. Only select quality rental companies with good reputations and upfront maintenance terms.
3. Return Conditions
If you have ever rented a car, you know that renting a lift truck also comes with an agreement that states you will return the forklift in good condition. Therefore, you need to instruct your workers to take extra care when using any rented equipment. If you return the forklift to the rental company in a poor state, you could pay extra to repair the damage. Read the terms of the rental agreement to find out more about these types of costs.
When Forklift Rental Is the Best Solution
Despite forklift rental cons, the pros often outweigh them in some situations. Overall, renting a forklift is suitable for short-term needs. Renting will be the ideal solution for your company if you want to test new models in your warehouse, dock, recycling center or other facility before buying them. A rented lift truck can also provide your workers with extra equipment during exceptionally busy times of the year, such as the holiday season at a retail distribution center.
Buying or Renting a Forklift? Fairchild Equipment Can Help
Find the best solution for your business with help from our team at Fairchild Equipment. We offer forklift rental and sales and add value to your experience by finding the top solutions for your needs. You need a partner to help you equip your construction site, distribution center, dockyard, manufacturing facility or recycling operation with the material handling equipment to handle your products without breaking your operating costs. Let us help.
We at Fairchild Equipment serve several locations throughout Minnesota, including Duluth, Bloomington, Ham Lake and Grand Rapids. Plus, we have several options for those in towns around Wisconsin, such as Stevens Point, Green Bay, Menomonee Falls, Marinette and Beloit. Check out our listing of dealer and service locations for the one near you.
You deserve more than a rental company or salesperson who tries to upsell you. Trust us at Fairchild Equipment to give you fleet evaluations and recommendations so you can ensure your rental or purchase of a forklift will provide you with the best return on investment (ROI) possible. Contact us to get started today or call us at (844) 432-4724.