12 Aug Forklift Lease Options
What is a forklift lease?
A forklift lease is a financial way for you to use a forklift for a certain amount of time. You pay for the use of the equipment only, so it is sometimes called a rental. Leasing a forklift may be financial answer for your company. But how do you know?
There are different options available when you are ready to finance a forklift truck:
Operating or Residual Lease:
The Operating lease is the most popular type of material handling lease. It is known as a Fair Market Value Lease (FMV). It is essentially a long-term forklift rental yet offers the lowest monthly payments. You pay for the use of the forklift(s), once the lease ends, you buy the truck for fair market value, continue leasing month-to-month or turn it in. So, if you’d like to purchase the forklift after the lease terminates, a FMV lease may not be your best option. You pay for only the time you use the truck without the full cost of ownership. Please note, you will be liable for any damage done to the forklift while in your possession. So, if your company works in harsh environments, this may not be the lease for you.
A Capital lease – also called a $1 Buyout or Full Payout Lease, $1.00 purchase option lease. This lease is more like a loan if you choose to buy the forklift at the end of the term. Unlike an operating lease, a capital lease passes ownership to you once you’ve made all your payments. At the end of a Capital lease there is a low purchase price. You can buy the forklift for a small amount low as $1. This type of lease works well for severe operating conditions and high-hour applications.
One-pay leases are perfect for seasonal work. They allow you to make a lump sum payment and are perfect for when you have a lot of cash on hand. It allows for great cash flow and does not strap you to a monthly bill. There is a downside to a one-pay lease, you need to be willing to assume some risk. Since you’re paying for the lift truck upfront, if something happens to the truck, you absorb the cost. Insurance only covers the market value of the truck.
If you want to keep the timeline of their lease open-ended, then the Flex lease is for you. You know how your business moves and with the Flex lease you can terminate the lease early if you don’t need it any longer or continue to lease the forklift at a lower rate. If you choose to terminate the lease, you opt out at the specified time given in the lease and return the truck. You do not own the truck. With all leases, it is your responsibility to maintain the forklift during the duration of your lease.
If you are considering a forklift lease, contact us and let us partner with you. Your Material Handling Consultant will assist you with solutions made to grow with your business.