Just over 30% of capital purchases in the US are done through leasing. Approximately 80% of businesses in the US lease at least some of their equipment. Here are a few reasons why.
Keep up with the newest technology
Material handling equipment is constantly being improved and updated, especially within the last few years. Newer forklifts can come readily equipped for automation or telematics solutions and each generation is more productive, reliable and energy efficient. When leasing equipment, it means you are replacing your equipment every few years and you won’t be stuck with outdated/antiquated equipment ever again!
Plan for replacements in accordance with lead times
Lead times in the last few years have been unpredictable because of supply chain issues, material shortages and labor shortages. When you lease equipment, you have the luxury to plan well in advance when it comes to replacing the equipment. If an old/non-leased piece of equipment fails and is not worth fixing, you may have to wait a year or more to have it replaced, spend more than you would like on renting a piece of equipment or, if you can find the spec you need, purchase preowned equipment. With leased equipment, the term is finite and allows for planning.
No long-term commitment
Things are always changing in a warehouse. Whether it is the products you store, the amount of product you have on hand, or the employees that work for you, it’s nice to never be stuck with a piece of equipment you don’t need, aren’t using, or won’t fit into a new space you are considering. If you want to move into a new warehouse or restructure your current space, you have the flexibility to return the equipment after the term is up instead of trading it in or trying to sell it private party. In some cases, you can negotiate the ability to swap equipment before the lease term is up.
Lower your out-of-pocket cost by paying as you go
With leases you have the ability to pay as you go instead of forking over a lump sum at one time. This will help to match the cost of the equipment with the actual use of the equipment. Cash is king and leases help you maintain the royal status.
Leases work well with long term maintenance agreements
Since leased equipment is new and has a finite term, you can get full maintenance during the lease term- a very efficient, cost effective form of maintenance program where pretty much everything is covered in one monthly lump sum.
If you are interested in leasing a piece of material handling equipment, contact your local material handling provider for assistance.