FORKLIFTS - WHEN TO BUY, AND WHEN TO HIRE

Generally, if you have the capital, it is more economical to buy outright - simply because direct purchase means no middleman between the forklift truck supplier and the forklift truck user.

Sometimes the convenience of meeting fluctuating workloads alone makes hire worthwhile by eliminating the need for maintenance facilities, AEC looks at the pros and cons of buying and hiring.

You need to ask yourself a few questions to make an informed decision on whether to buy or hire a forklift tuck:

• Could capital outlay on buying and maintaining forklifts over a period of years be more profitably used on other resources? Could it be less expensive over that period to pay rental charges and be free of the other unpredictable maintenance and spares costs, which increase with the age of a forklift?

• Is short-term hire, when forklifts are used as and when the need arises, more economically viable than owning a permanent fleet?

Hire companies frequently buy in quantities and at a discount, which means hirers get a better deal. The people responsible for buying and maintaining hire fleets are more likely than most to know "best buys", how forklifts perform in practice rather than in brochures and what after-sales maintenance and spares are likely to cost over a forklift's working life. Hire companies are maintenance specialists so they have the incentive to be, and usually are, better than others need to be.
To the cost advantages which forklift hirers pass on to users may be added the savings which users can find in being free from the overheads associated with purchasing. These savings fall under four headings:

Maintenance - Apart from the day-to-day care required by any industrial vehicle, hire and rental contracts cover preventative maintenance and service.

Opportunity Cost - This is what you gain by using resources in one way rather than another.

This boils down to what you would have saved if instead of buying a fleet of forklifts over a period of, say, five years, you had hired them. If the total cost - taking into account depreciation and residual value - of buying and maintaining a forklift turns out to be more than the cost of hiring, you hire.

Administrative Time - Buying and using forklifts is a specialised job involving companies specifications to get the right forklift for your requirements, knowing the optimum time to replace a truck and a knowledge of the reliability of basic, expensive components like torque converters, gearboxes, clutches, batteries etc. to discern through the gloss of trade literature which forklifts will, over the course of years, give the best value for money. This time-expensive research can be literally expensive when the wrong decision is made.

Dealing with the Unpredictable - In an uncertain economic climate there are powerful arguments for hiring - contract or short term. When you hire and your handling load falls below a predicted level you are not faced with an idle plant as well as an idle forklift.

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