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Forklift Rentals: Lease vs Purchase

We own a forklift rental fleet of 250 units. What are your thoughts on leasing your rental fleet versus owning your rental fleet?
– Mark T. Maechling, President, Cal-Lift, Inc. (City of Commerce, CA)

Dave Griffith: Leasing is not a bad idea as long as you manage the mix and the terms. Given the volatility of markets, having some rental fleet that you can put on a non-sale basis is a good way to manage the balance sheet. You may make slightly less on the rental, and as long as you have a purchase option to feed your used activity, it’s not a bad strategy to manage risk and cash.

Richard Donnelly: We currently do not lease any of our rental trucks. From an operational and fleet management viewpoint, there isn’t much difference if you lease or own your fleet. Most companies that lease some of their fleet are trying to grow the size of the rental fleet, or they might want to use the capital in other areas of their business. In our dealership, we feel we have more flexibility in managing the rental fleet if we own it.

Duncan Murphy: We lease only in the case of a specific long-term contract that would consume most of the useful life of the truck, or in the case it lacks marketability for rental or used truck sale because of specifications. An example of the former would be a pallet truck in a packing house for multiple years. An example of the latter would be a unit with a ten-foot lowered single stage mast. Your company’s asset base and access to cash can also influence your financing. Typically we want to own all rentals since they are the best source of reliable and profitable used trucks.

Material Handling Equipment Distributors Association

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