Financing Your Forklift: To Purchase or Lease?

May 13, 2019 6:07 pm Published by Leave your thoughts

Are you looking into getting a new forklift for your business? Beyond just the type of forklift you get, one of the first decisions you’ll have to make is whether you’ll be leasing or purchasing the machine. Neither answer is automatically better than the other—every situation is different, so you must take some important factors into consideration to ensure you make the right decision for your company.

While you might like to be the “owner” of the equipment, that’s not necessarily the right decision for you. Here are just a few factors you’ll want to keep in mind when deciding between purchasing and forklift leasing in Lafayette, LA:

  • Maintenance: The cost of maintenance should be taken into consideration when making your decision. There are some circumstances in which maintenance programs are included in financing contracts, which can result in it making more sense to go with purchasing rather than leasing, as it in turn becomes easier for you to keep your forklifts in prime condition for years to come.
  • Resale value: Market values for your equipment for the purposes of resale can be expected to fluctuate over time based on economic conditions, the brand of equipment you purchase, its specifications, how well you keep up with maintenance and its condition. Of course, no piece of equipment is going to be worth as much in a few years as it is when you get it new. If you’re worried about sinking too much money into the equipment, there are some circumstances in which leasing makes more sense.
  • Operational expenses: One of the main benefits of leasing equipment through a forklift dealer in Lafayette, LA is that the lease payments can be classified as an operational expense, which means payments for the lease can be deducted as a business expense on your tax returns. This goes a long way toward reducing the net cost of your lease.
  • Cash flow: Payments for your operating leases are typically going to be lower than what you’d pay for a fully paid-out finance contract, in which ownership gets transferred after you’ve made your final payment. In this way, businesses can benefit from leases in that they can save capital for other aspects of running their business, including expanding their inventory, developing brand-new products, marketing their services or finding other profitable and beneficial uses for the cash they have, rather than devoting it solely to equipment that will depreciate in value.
  • Flexibility: There is a lot more flexibility with leasing than purchasing. Forklift leases can be adjusted as needed based on the number of hours accumulated. The lower the hours, the lower the payments can be—you’re only paying for as much use as you’re getting out of the forklift. While the amount of time you have to pay back a purchase can be flexible, you’re still going to ultimately be responsible for paying off the entire value of the vehicle.

For more information about whether you should lease or purchase your forklift, we encourage you to contact George’s Lift Truck Service, LLC today. We also offer forklift rentals in Lafayette, LA, which can be a great solution if you only need the equipment for a limited time.

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