The questions that haunts most people when they seek to acquire a forklift is whether they should lease or buy. Although most people expect an easy answer to this question, there is no cut-and-dried one-size-fits-all advice in such a scenario. Everything depends on a number of factors that are unique to every individual need. To help you arrive at the best way forward when faced with a similar question, let’s look at the different determinants.
Buying a forklift
Buying a forklift may seem logical to most people at first as it comes with ownership of the equipment. The assumption is however true for operators with lighter loads or large amounts of excess capital. Buying also makes sense if your requirement demands a high degree of customization and special attachments or if you routinely move your equipment between different locations.
Equipment purchases from working capital represent the lowest acquisition cost in most instances. Other benefits include:
- Immediate ownership
- Zero service fees, interest, or finance charges
- Flexibility to invest extra hours without attracting additional costs
- Peace of mind
- Allows for customization
- The forklift purchase is tax deductible
Conversion of liquid cash into assets
Depletion of cash sometimes necessitating borrowing
Leasing a forklift may be the best foot forward in a number of scenarios, such as when you want to test different types of forklifts for sale, your requirement is temporary or seasonal, and when your operations are characterized by heavy forklift use.
Payments for forklifts for rent are usually made from the balance sheet as operational expense, allowing them to be deducted from in tax returns under business expenses. Here are some of the benefits of having an operational lease.
- Allows you to save capital for other pressing issues such as product development and inventory expansion.
- Heavy users don’t have to worry about depreciation and trade-in/resale values
- You are free from investing in obsolescence
- Lease contracts are flexible
Leasing has its fair share of disadvantages, which include:
- The risk of paying more in the end due to interest and other charges
- May not include ownership option (Paid-up Contract)
- Some providers of forklifts for rent restrict their equipment to a single location
Let Us Help
If you need expert help deciding whether to buy or lease, our team at Accurate Forklift is always there for you. Discuss your requirement with us for expert and ethical advice that best caters to your unique situation. We also offer forklifts for sale and forklifts for rent in Atlanta. Call us today at 770-692-1455 or mail to [email protected].