A forklift is an expensive, but essential piece of equipment for logistics businesses. While outright ownership might seem like a straightforward option, this can tie up your resources and put pressure on cash flow.

Leasing, on the other hand, enables you to spread out the cost of the asset and even hand over responsibility for upkeep and maintenance. Leasing can afford you greater flexibility in your fleet arrangement, access to the latest equipment and free up capital for other purchases.

Leasing allows your business to grow without putting your working capital at risk. With fixed monthly payments, this option allows you to forecast budgets accurately.

Forklift leasing will usually cover all maintenance and service costs over the period you have the vehicle. With Forklift leasing, you are able to change your truck during the lease, which is extremely helpful if your requirements change. This type of leasing is usually for used trucks, rather than new ones. 

With fixed monthly repayments, you are able to forecast your budgets accurately, however, you may find better rates with other forms of leasing. Nevertheless, if you need a forklift in the medium to long-term, and simultaneously value the continuous availability of your fleet, with no risk, leasing may be the right option for you.

Forklift Hire Purchase

Hire purchase involves you ultimately purchasing the forklift by paying in instalments. If you want to actually own the forklift without paying the whole amount upfront, hire purchase is likely to be the best option. 

It’s important to be aware that by choosing this method, you will be responsible for paying for all maintenance and service costs. However, as you are paying for the forklift alone, this does make the rates of repayment are often more favourable compared to other forms of leasing.

Additionally, while you may have to fork out (excuse the pun) for maintenance costs, buying on hire purchase can have positive tax benefits, allowing you to show your forklift hire purchase as an asset on your balance sheet. This means you can offset your capital allowances against taxable income at typically 25% per annum rate on your reducing balance. However, small businesses can offset this equipment value by 40% in the first year - meaning there is a significant saving to be had!

Another benefit of hire purchase is that you get a much wider choice of trucks, from brand new to slightly used. But bear in mind that you will only get one forklift per lease, so make sure you choose wisely. 

Forklift Contract Hire

Contract hire bridges the gap between leasing and hire purchase. A more concrete contract is drawn up compared to leasing, but unlike hire purchase, you will not own the truck at the end of the contract terms. This has the benefit of allowing you generous rates, making repayments lower, as the secure contract makes you less of a liability. The flat repayment charge means you can easily budget going forward.

Annual services and many ongoing maintenance costs will be covered as part of your repayments, which means you won’t have to worry about covering any large mechanical bills. That being said you will still have to cover consumables such as tyres and forks, and in the event that the forklift is damaged by a customer.

It is important to realise that you will be committed to your contract for the full duration, so ensure you are able to fulfil that. You may not be able to alter your vehicle if your needs change, so make sure you invest in a machine that will be able to handle your projected growth over the next few years. 

Forklift Finance Lease

Finance lease allows you to lease a truck with fixed monthly payments, similar to leasing, but excludes maintenance. Unlike hire purchase, you will not own the vehicle, and at the end of the primary period, the agreement may be terminated or continued at a nominal rent.

What’s Right for You?

With a range of flexible finance packages to suit your individual requirements, whether you’re a small independent looking for a single pallet truck, or a transnational in need of a fleet, we are certain there is an option to suit your business needs.

To discuss finance options further, get in touch and a member of our team will be happy to speak with you.