Compare Renting/Leasing vs Buying a Forklift Costs
Renting/Leasing a Forklift Overview
Forklifts are expensive machines. That’s why nearly all of them are leased or financed, not purchased outright.
Forklifts can be leased from the manufacturer or through a third-party equipment leasing company. You’ll pay little or no money down, then spread payments for the machine over a number of years, usually one to five. When the lease term expires, you can purchase the machine, exchange it for a newer model or simply return it.
Renting works a little differently; there’s no option to purchase at the end of the agreement. If you need the forklift for one quick job, you can opt for a short-term rental spanning days, weeks or months. Long-term rentals are available for a span of 12 months or more.
Please note that all forklift operators are required by OSHA to be properly trained and evaluated. You should also review their quick card for safe forklift operation. The National Safety Council offers OSHA compliant forklift training using virtual reality.
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Cost of Renting/Leasing a Forklift
The cost to lease a forklift depends on the price of the machine, your credit rating and the length of the lease. According to material handling and warehouse equipment expert Dan Beer, you might pay $600 to $650 per month to lease a $25,000 forklift for five years. A $50,000 machine might go for $1,000 to $1,350 per month.
Your monthly payment will also be impacted by the buyout option you select. Most leasing companies offer a $100 buyout plan that will slightly increase your monthly payments. But at the end of the lease, the forklift will be yours for $100. If you skip this option, you’ll pay fair market value.
Renting or Leasing Forklift Pros
- Lower upfront costs - Renting or leasing requires little or no upfront expense. You can acquire the expensive equipment you need without shelling out tens of thousands of dollars.
- No long-term commitment - Renting is a great way to “test out” a forklift you’re thinking of buying. Leasing requires a longer commitment, but you have the option to trade in the forklift for a newer or better model when the lease term expires.
Renting or Leasing Forklift Cons
- Higher long-term cost - Leasing is almost always more expensive than buying. Renting is even more expensive than leasing, so it’s really only a good idea for very short-term needs.
Buying a Forklift Overview
If your needs are long term, you might want to consider purchasing a forklift. You’ll always have the machine when you need it, and you’ll spend less over the long term than with renting or leasing.
Due to the high cost, forklifts are rarely purchased with cash. They’re usually financed, much like you’d finance your car. Expect to make a downpayment and then monthly payments over about five years.
Buying Forklift Prices
A standard, 5,000-pound capacity electric forklift typically sells for $18,000 to $25,000. Budget up to another $5,000 for a battery and charger. The same size internal combustion forklift costs anywhere from $15,000 to $28,000, depending on features. Generally, electric forklifts are more expensive than similar internal combustion models.
Large internal combustion forklifts with a 10,000-pound capacity sell for about $28,000 to $50,000. Extremely large-capacity forklifts could go for as much as $100,000.
In addition to the purchase price, you’ll want to consider purchasing a service plan that covers routine maintenance and breakdowns. This is particularly important if you purchase a used forklift.
Buying Forklift Pros
- Lower long-term costs - Leasing is almost always more expensive than buying when you consider the total cost of ownership. And renting is always more expensive than buying.
- Ownership - At the end of a fair market value lease, you don’t have anything to show for five years of payments. When you buy outright, you’ll own a very valuable machine long after all of the payments have been made.
Buying Forklift Cons
- Technological changes - With a lease, you can upgrade your forklift every few years as technology changes and the models improve. When you buy, the only option is to sell the old forklift and buy a new one, which can be a hassle.