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Can I Financial Lease My Fork Truck?
As with many expensive vehicles and machinery you have a range of options when choosing to purchase a brand new item. Outright purchase of a truck maybe suitable for your business but if you prefer to allocate heavy costs over a period of time rather than take an initial hit you maybe suited to a financial lease agreement.
The difference between a lease and contract hire is that normally you will be responsible for looking after the forktruck. All maintenance, service costs, insurance and repairs will be your responsibility as opposed to the fork truck hire company. This means that you are free to choose another company to look after you and your fork truck. While this maybe the same company that leases you the forktruck, it doesn't necessarily have to be. At the end of the lease period you will normally be able to extend the lease by paying a nominal lease which should pass on savings over the long term when compared to contract hire. You may also be able to sell the forklift truck on and keep most of the sale price or use the sum towards a future lease.
As you don't actually own the fork truck the lease cost should also be fully set against tax, although you should always check with your accountant when making decisions based on financial rules and regulations. While a financial lease may offer you more choices than formal contract hire it is worth calculating the full cost over a set period, say 3 years, of fork truck operation and the options available to you at the end of the period. If you require this flexibility then leasing your fork truck maybe the best option for your business. If you have a fleet of fork lift trucks then you may also benefit from economies of scale in relation to servicing, parts, insurance and maintenance. Reducing such costs per unit over the period may make the Contract Hire option for the same number of units very expensive in comparison.
Before purchasing your fork lift truck gather the options available to you and sit down with your accountant or finance director to discuss if a financial lease is your best choice or other alternatives are more attractive.