Forklifts are expensive pieces of equipment, so there’s a big decision to be made when it comes to your business – do you rent or buy?
For some, it might be an easy decision, but even then, it’s worth taking a moment to consider the pros and cons of both options before making any final calls.
Buying a forklift
Obviously, buying a forklift is more expensive than renting one, but like all business purchases, it must be viewed as a long-term investment.
Some companies like to own all their capital equipment if they can afford to, and that’s one advantage of buying a forklift; it’s yours. Rentals need to be returned in the same condition, and if anything happens to them on your watch, then you’re the one paying for the damages.
The industry your business is in also plays a factor in the decision to rent or buy. If work is steady all-year-round, then you’re probably going to get the use out of any equipment you purchase. And if your company is strong, growing year on year with a good track record, then financially it might make more sense to buy than to rent.
Where your business or worksite is located should also be taken into consideration. Renting a forklift in a remote location might incur delivery charges, adding to the overall cost. On top of that, any job with an undetermined end date might drag on for months, again adding to the final invoice.
If you buy a forklift, then it’s part of your business, an asset you can incorporate into your training schedule. Rentals may require training for your staff who are unfamiliar with this new heavy equipment.
And, of course, not all forklifts are the same. If you need a specialised forklift then the rental cost might be higher than a regular forklift. If you own that specialised vehicle in the first place, then that’s one less thing to worry about.
Renting a forklift
Again, the first thing to consider is the cost of renting a forklift compared to buying one. With a lower up-front cost, renting is a smarter choice for smaller companies, start-ups, or any business without a strong line of credit.
Staying on the financial side of things, renting equipment can be considered an operational expense for tax purposes (as opposed to a capital expense), so that can make things easier when it comes to balancing the books.
Renting a forklift also offers more flexibility, especially important if your business is going through changes, good or bad. We never know what the future holds, COVID-19 being a good example, so the ability to cut costs when work slows down or hire equipment if things suddenly speed up is a huge advantage.
Not owning the forklift also has its advantages. When you rent it, you’re not responsible for the maintenance costs. If there’s a problem with it, you simply hand it back and get a replacement while someone else fixes it. Also, if you own the equipment, then you are responsible for meeting the minimum safety standards as required by law. Renting doesn’t have this problem.
Just like regular cars, forklifts come in the latest models, and renting one gives you the opportunity to use the most up-to-date vehicles on the market. Older forklifts might not meet the latest Health & Safety Standards, especially if you’re buying secondhand, but this isn’t an issue when renting.
One often overlooked aspect is transportation. If you have your own forklifts, then you need to bring them yourself to the worksite. This can be not only difficult and time-consuming, but expensive. If you rent a forklift, then the rental company will deliver it wherever you want it and pick it up again once you’re done.
Leasing a forklift
There is a middle-ground when it comes to buying or renting a forklift; leasing.
Leasing is just like renting, but over a longer period. IT’s particularly handy for seasonal businesses, like fruit picking.
Leasing has most of the same advantages as renting, but you are tied in for a certain period, whether the equipment is needed or not. This is great if you’re busy, but a waste of money if the forklift is just sitting there for weeks on end.
So which is better? Renting or buying?
There is no simple answer to that question.
Whether renting or buying a forklift is right for you depends on many factors. It can be a difficult decision, depending on time, money, and the state of your business now and in the foreseeable future.
If you’re short on cash flow, then renting is probably the best option. If you know you’re going to be busy and will get the most out of it, you’re probably better to buy.
The decision is yours, and whether it’s an obvious one or not, it shouldn’t be taken without some serious thought and research.
Whatever you decide, we’re here to help
Whether you decide to rent or buy a forklift, we’ve got you covered.
Our casual Forklift hire rental fleet can cover just about any requirement for a forklift to cover a quick job or a specific task.
You can hire the equipment you need hourly, daily, or weekly with prompt delivery to your site. All forklifts will be delivered in good working order with fuel, oil, and coolant up to level, and a wide range of attachments (fork extensions, paper roll clamps, carton clamps, push-pulls, etc) are also available for hire.
If you need equipment on a longer timeline but don’t want to buy, we also have leasing terms to suit your needs. The contract will be for a fixed period at a fixed monthly price, including all routine maintenance and fair wear and tear as defined by the NZ Forklift Industry Association Fair Wear and Tear Guide.
And of course we have a wide variety of new and used forklifts for sale with models rotating regularly. Diesel, petrol, LPG, and electric machines as well as reach trucks, order pickers, counterbalance, and container handlers – we’ve got everything you need!
If you’re unsure what type of equipment you need, no matter what industry you work in, with nearly forty years in business, the team at Northern Forklifts have the expertise to help select the best forklift for your job.
Contact us today if you would like to know more about buying or renting a forklift. Our friendly and experienced staff will be only too happy to help.