I Need a Forklift: Should I Buy or Rent? Part II
Last week, we discussed a common dilemma faced by managers when they reach a critical stage of business growth: When it’s time to procure a forklift, is it better to own or rent? When materials handling tasks grow beyond the reach of unassisted human power, should the on-site forklift be a permanent or temporary resident? While last week’s blog emphasized the benefits of renting, this week we’ll list a few reasons why buying might be the best option.
When it’s time to commit, it’s time.
Renting when it’s better to buy will only prolong an inevitable decision, and that prolongation comes at a cost. The day-to-day cost breakdown of renting versus buying typically puts a higher price tag on renting, which works well for those who only need the truck for short-term projects or hectic seasonal business peaks. But if you treat every day like a temporary rush, how long can you continue this pattern before the cost of renting meets and exceeds the cost of a purchase? Not long. Realistically predict the day you’ll no longer need the truck, and plan around that day. If you can’t see that day on the horizon, consider making your long-term investment now.
Buying costs begin to drop on the first day.
Renting rates stay the same from day to day. But when you buy a forklift, it begins to pay for itself on day one, and each day the per-day rate goes down slightly. You may be making interest payments, but as time goes by, the interest payments drop as your profits and productivity increase. Calculate for depreciation when you crunch the numbers, but recognize that once the truck is yours, you’ll retain a higher share of its per-day net value.
No matter how new or well-maintained they appear, rented lift trucks are still somewhat unknown. Their previous owners and usage history are not always available, and any wear and tear, misuse, factory problems or safety issues may not be readily apparent. A new or nearly new lift truck purchase, on the other hand, means maintenance records start with you. You’ll have a detailed account of every factory flaw and every replacement part, which can protect safety and productivity over the long run. You’ll also be able to control the brand, model and features of the truck on which your business depends.
Timing also matters.
When you own an on-site lift truck, you can put it into use immediately when needed. It’s always there, so if rush orders or urgent needs arise, you won’t have to wait for delivery or paperwork before you get behind the controls and get to work.
- Liftow Ltd.