Should I rent or buy a forklift? 4 Things To Consider First
There is no right or wrong answer. Let’s face it, there are pros and cons for both renting and buying. It really depends upon your operations and individual needs as a company.
If you’re running a high throughput distribution center, you’ll probably be running several forklifts all day long – then owning would make the most sense. If you have a garden center, you may only need a forklift for heavy lifting now and then. With a construction project, you may only need a forklift or specialized equipment for a few months. For short term use, renting would be the best route. What if you’d like to test out the latest equipment with newer tech before you buy? Renting would allow you an opportunity for a trial period.
4 Major Things To Consider Before You Rent/Buy Forklift Trucks
Before you decide to rent/buy heavy equipment, there are 4 important things you should have a good understanding of:
1. What is your current financial situation?
Based upon your capital flow and projection for the future, consider what would be the best option:
Renting: Renting out a forklift allows for more capital flow and you don’t have the overhead costs of maintenance.
Buying: New forklifts may be a better option for you if you’re using the equipment often and you get a return on investment when it's time to sell.
You could also look into leasing or buying used forklifts and equipment to see if those options suit your needs better.
2. What's the cost of ownership vs renting?
Along with ownership comes the cost of maintaining and servicing equipment, safety considerations, insurance, licensing, fuel, batteries, etc. This adds up fast. If you’re renting, that fee will include most of those costs plus a markup - equipment transportation is also a cost factor. But some companies find that regular rental payments are easier to budget for than unexpected costs acquired by forklift ownership. Plus, the rental company is usually responsible for all maintenance/servicing costs.
3. How often will the equipment be used?
Discern if your operations call for consistent, daily use of a forklift or if it’s being used on an as-need basis with intermittent runs. 100% utilization is a good way to determine if you should rent vs. buy. What’s 100% utilization? If a forklift is operated 22 days or 176 hours per month, that’s’ considered 100% utilization. If you’re running at 100% utilization, buying would most likely be the right option for you.
To calculate value based upon utilization, take the cost of renting the equipment with the approximate amount of time you’ll need it. Then calculate the approximate monthly payments you’d incur from buying within the same timeframe. Take a look at your break-even point and that will give you a good idea of when renting becomes more expensive than owning. You can also contact one of our account managers who can assist you with calculating what’s best for your needs.
4. Will you need equipment availability 24/7?
If your needs are occasionally unexpected, purchasing a forklift or other heavy equipment will guarantee that you’ll always have the equipment when you need it. However, renting may be a better option if your need for a variety of equipment may fluctuate depending upon your projects. You’ll also eliminate storage costs for equipment that may sit for longer periods of time.
Want to make it easy?
Knowing your operational and equipment needs, financial capabilities, and future plans up front will equip you to make a better decision - but sometimes it can be a headache figuring that out. That’s what we’re here for. Fairchild Equipment has a very large selection of new, used, and rental equipment. We help people make decisions like this every day - all day long. We’d love to assist and equip you with the right information to help make your decision easier.