Buying vs Renting Forklifts: You'll want to consider the different forklift purchase options when you need this crucial equipment. At Medley, we rent and sell new and used forklifts. Whatever your choice, we can help you find a solution that meets your company's needs and lets you get the job done right.
Pros and Cons of Buying a Forklift
Purchasing a forklift comes with an upfront investment, but the lower long-term costs might make it the right choice. Consider the following pros and cons of buying a forklift for your fleet.
Pros of Buying
Buying your own forklift comes with many advantages, such as:
- Gaining a capital asset: When you purchase a forklift, the new equipment becomes a capital asset you can use for collateral loans. You can also sell it when you no longer need it, allowing you to get some of your investment back. Purchasing a new forklift will give you the highest return on your investment.
- Few limitations: In the case of damage or overdue maintenance, owning the equipment means you won't have to pay any additional penalties.
- Tax advantages and investments: Many businesses take advantage of tax benefits from buying used equipment. Section 179 of the U.S. tax code even allows companies to write off used equipment purchases while receiving bonus depreciation.
- The lowest long-term cost: If you frequently need one, purchasing a forklift is more affordable than leasing or renting to own. You can easily factor your financing into your annual budget since long-term rental fees tend to be much higher than monthly financing costs. If you ever resell, you can also get a better return on investment if you've taken good care of it.
Cons of Buying
While there are several advantages to owning your equipment, buying a forklift also comes with a few cons, including the following:
- It requires upfront costs: When you buy a forklift, you'll need cash on hand for the initial investment.
- You're responsible for repair costs: When you own the equipment, you're responsible for any maintenance and repair your equipment might require. That's why regular maintenance is crucial to keep your equipment in good working condition.
- You can't return it if business slows: You won't have the convenience of returning the forklift to save costs when business slows down. However, if you no longer need it, you can resell it and try to make a return on your investment.
Pros and Cons of Renting a Forklift
Although renting a forklift comes with potential penalties and higher fees, it also allows the convenience of only paying for the equipment when needed. If you're thinking of renting, consider the following pros and cons.
Pros of Renting
It may be more convenient to rent the forklift you need, especially if you only need it for a few projects. Here are the pros of renting:
- Flexibility: When you rent a forklift, you have the flexibility to use it for as long as you need it before returning it. Most rentals are available daily or for a few months at a time. Renting can be an economical way to have additional equipment to fill a temporary need, such as for specific, short-term projects.
- No maintenance required: Renting a forklift means you won't have to worry about maintenance. Your contract will typically include any maintenance needs, so your company won't need to source or invoice a provider.
- Try different models without commitment: Renting a forklift allows you to try out different models without commitment. If you discover one model doesn't work as well for a project as you'd like, you can return it and try a different one until you find what you need. You can also rent equipment with the latest technology without the upfront price of buying new.
- Easy budgeting: Budgeting can be easier when you lease a forklift since you'll only have the rental cost without paying a large upfront sum. You might have more options at the end of the lease, such as lower monthly costs toward fair market value.
Cons of Renting
While renting a forklift has many advantages, the convenience comes with a few cons, including:
- Potential penalties: While renting brings flexibility, it can also come with penalties. For example, when you lease a forklift, you can only use it for a limited number of hours. Like vehicle leasing, you'll have to pay an extra fee for any time you use it beyond your contracted limit.
- Higher monthly costs: The convenience of renting comes with higher monthly costs than purchasing a forklift outright. Renting also comes with contracts, renewal dates and fees. Depending on the lease terms and interest, renting equipment might end up costing you more than buying it.
- Equipment doesn't count toward valuation or collateral: Unlike equipment you purchase, you can't use rental forklifts as an asset or collateral for a business loan. Since you don't own it, you can't sell it.
Factors to Consider Before Buying or Renting a Forklift
Before deciding whether you will buy or rent a forklift for your company, consider these factors:
- Budget: While renting and buying both come with a price tag, purchasing a forklift requires a significant initial investment. Consider how much you're prepared to spend. Purchasing is often better for your wallet in the long run, but if a big purchase isn't feasible, you might temporarily rent to cover your needs.
- Work requirements: Consider your work needs, including how often you'll use the forklift. Purchasing might be a better option if a forklift is crucial to your operations. However, renting may be the more economical choice if you need the equipment for a promotion or seasonal project.
- Maintenance: You'll want to think about how hard your forklift will need to work. Purchasing might be the better choice if you have heavy work requirements and can maintain your forklift. You'll have to pay for any damage whether you buy or rent, but the penalties in your rental contract may be steeper.
- Storage: If you don't have room to store your forklift during the year, you might want to consider renting. With a rental, you're only responsible for the equipment when you need it — your provider might even deliver it to your job site.
How Medley Equipment Company Can Help
Buying vs Renting Forklifts: When considering whether to rent or buy a forklift, the best choice for your company will depend on your specific situation. Both options have their advantages and disadvantages. In some cases, renting might be the better option for your money, but buying is a wise investment if you need your equipment for the long term.
At Medley, our experts can help you decide whether renting or buying is best for your company. Whichever you choose, you'll get access to top-quality new and used forklifts.
Working with us means fast response times, regular maintenance programs and excellent customer service every step of the way. Contact us today to get started. Buying vs Renting Forklifts