Forklift purchases are some of the most significant expenses for an operation. When businesses are looking to invest in forklifts, there are multiple considerations and things they need to know before taking the plunge. We have rounded up some of our top tips for making the best decision when it comes to purchasing a forklift.
New Versus Used and Renting Versus Purchasing a Forklift
The industry rule of thumb for determining whether to buy a new or used forklift or opt to rent is how much you will use the piece of equipment. If your operations only require an hour or two per day, you can save money upfront by purchasing a used piece of equipment. If you are using the forklift for 3-5+/hours each day, you should go with a new truck because it will be more reliable and help you avoid maintenance issues.
Businesses with seasonal needs such as retail operations in Q4 should consider renting forklifts during their busy season so they do not incur unnecessary expenses and have equipment sitting around unused the majority of the year. Additionally, suppose you know your business will be changing in the near future, such as an increase in volume or a move to a new facility. In that case, we advise renting for the short term to adequately invest in the correct equipment for your business model or projections more precisely down the road.
Financing Versus Leasing Forklifts
The decision to lease versus purchase a forklift depends on your accounting team and your business’s cash flexibility. Leasing may be advantageous if you are going to have high hours on the equipment and need new forklifts every three to five years; plus, it preserves cash and increases flexibility. Should you choose to purchase, it is important to decide if you want to purchase via working capital or consider a capital lease in which you own the asset but pay for it over time.
Determining the Quantity of Forklifts Needed
We work with our customers by looking at their velocity reports to determine how much product is going in and out of the door, what is being moved, how big the facility is, and how to improve product flow to make educated recommendations about the number and mix of forklifts needed for optimal operations.
Forklifts come with a myriad of options, from those designed for productivity, those for operator comfort and convenience and those designed to further protect the operator in certain environments. Businesses should select the options that will most benefit their organizational efficiency and operators, ranging from reverse alarms and strobe lights to cupholders and fans in the cabin for comfort.
Hidden or Additional Fees When Purchasing a Forklift
We pride ourselves on customer transparency, so that you fully understand what is included with each purchase. Typically, when purchasing a forklift, the battery is included along with a charger if it is a new piece of equipment. Other costs to be aware of include freight and installation. If those are not included in your upfront amount, determine what those additional amounts will be for planning purposes.
Cost of Ownership
While the upfront purchase price may be higher, Raymond has the lowest cost of ownership, both from a maintenance perspective but also in battery recharging costs and in terms of pallet moves per day. While some companies are vertically integrated, Raymond flows the Toyota Productions Systems philosophy of sourcing the best products from the best manufacturers worldwide. This is especially important given the current supply chain challenges, as it allows for flexibility in sourcing parts and decreasing lead time.
We recommend signing up for a maintenance package when you are purchasing a forklift. It is ideal to lock in a price upfront, so you can hedge the maintenance costs of the forklift as it ages, particularly in these inflationary times.
Our Partnership is Not Fleeting
At Abel Womack, our team works closely with our customers to advise them on the forklifts needed to help their operation succeed through long-term efficiency, productivity, and cost savings. Please contact our specialists today for more information on determining the right fleet or lift truck options and for all your material handling needs.
Additional reading: 10 Reasons it’s Time to Upgrade Your Forklift