Prime Advantage has invited industry experts to share insights on achieving manufacturing and business success. In this post, Tim Neroni, President and Managing Partner at KMH Systems, Inc., discusses what to consider when deciding whether to rent or purchase material handling equipment.
Material handling equipment is an absolute necessity for modern businesses to stay competitive and increase worker productivity. Forklifts come in many varieties and have a range of capabilities and prices, but their fundamental purpose is to allow workers to move inventory quickly and efficiently.
The issue for some, especially most small businesses, is the issue of whether to buy or rent the equipment. There is no simple right or wrong to this question, since it comes down the individual company's situation.
Save Money on Terms
Long or short term rentals can be arranged for a weekly or monthly price with a rental company. Short term rental prices can vary; however, most forklift companies do have regular pricing, and you should always ask what deals are available to you. When a forklift is purchased, the owner is responsible for all maintenance costs and any associated issues such as downtime. Over the course of a year, this alone can add significant amounts to the cost of the forklift that may not be in your budget. Also, as the forklift ages, maintenance costs increase simultaneously. The added cost of service equipment and organizing temporary replacements, if necessary, must also be considered when budgeting for buying instead of simply renting, a forklift.
Forklift owners must make sure their vehicles are properly maintained and meet all relevant safety requirements. Many accidents involving forklifts are due to neglected maintenance schedules and poor working conditions. Companies renting forklifts are responsible for the training and working conditions of forklift legislation and can offer expert advice such as personal protective equipment, checklists and operating instructions and differing rental term plans to allow your company flexibility.
Upgrading Your Forklift Options
Renting a forklift enables an element of flexibility for a workplace. The customer can select the appropriate model to rent for a specific job which may be different to a model that is required for another task. The same level of flexibility cannot be obtained when purchasing a forklift which can lead to higher costs for an organization and/or inefficient working practices.
Top Reasons to Rent
- Forklift purchases require you to invest a significant amount of capital or have well established credit
- As your purchased equipment ages you will not get benefits of newer tech
- New equipment is not available immediately
- It can be hard to estimate the length of some jobs and therefore the cost
- Your cost is much lower for short to medium term rentals
- Rentals are generally available for businesses with minimal credit
- There is no need for in-house mechanics
- You can use the latest equipment depending on rental company