When you buy one or more forklifts, there is a large one-off payment to make, so obviously, that’s a budget consideration before you make a decision. However, the big advantage, if you can afford to buy, is that once you’ve made that upfront payment, that’s it. There aren’t any more ongoing payments that you have to budget for, and it is more cost effective in the long run.
From a further financial point of view, you can also list the forklift as an asset on your accounts, and of course, any payments you make to buy in items for your business are offset against any tax you might pay. If you’re coming to the end of the financial year, and still have a large tax liability, investing in forklifts for your business that you need anyway can be a sound decision to reduce what you pay out in taxes.
From a practical business point of view, you own the forklift trucks, and that allows your drivers to get used to each vehicle, rather than having to learn a new vehicle every so often if you rent a new one, which can save time and increase efficiency.
One other advantage of buying your fleet is that you can do what you like to each truck. You own it, so you can customise it to suit, including painting it with your branding and your logo to promote your brand and present a professional image.
The obvious advantage of hiring over buying is that it allows you to avoid having to pay a large amount upfront, and it’s great for budgeting as you always know what your payment is going to be every month. If you’re a start-up company, without a huge cash influx initially, this can be an excellent option to get you off the ground until you have money coming in regularly and can afford to buy your own fleet. Bear in mind that you might end up paying more over time for hired forklifts, rather than buying them outright, but it’s still a good option if you’re just starting out.
Hiring forklifts is the ideal option if you have a seasonal business. It makes no sense at all to own a fleet of trucks if you only use them for three months out of every year. You can hire in what you need as and when you need it, and only pay for what you actually use. And you don’t have to find a permanent storage space for them when they aren’t in use, which frees up space that you can put to better use.
If you have a special project coming up that requires a particular type of forklift, hiring one for the short term makes far more sense than buying something that you might only use a couple of times. There’s no sense in buying a side loader or a teletruck and having it sit idle taking up space for most of the year when you can hire it for a few weeks and then send it back.
If you buy all of your forklifts, you will have to do safety checks and maintenance. That can take up a lot of time and have cost implications if you have a large fleet. You’ll be responsible for the annual LOLER (Lifting Operations and Lifting Equipment Regulations) 1998 inspection for each truck, too, and any repairs that might be necessary, following the inspection. With hiring, on the other hand, all of that extra work is the responsibility of the hiring company, while you just carry on running your business.
With advantages and disadvantages to both options, whether you hire or buy will depend on where you are in your business, what your business plan and short and long-term goals are, and, of course, on your budget.
HITEC specialises in hire and sales of materials handling vehicles, including forklift trucks. Get In Touch to discuss how we can help you with your material handling needs.