Making the case for flexible leasing

It’s time to invest in new forklifts or other types of material handling equipment for your business. Maybe you have some new contracts in the pipeline, perhaps you’re opening a new facility or your existing stock of lift trucks is teetering on the edge of obsolescence.

Regardless of the reason behind the decision, it’s an important one that shouldn’t be taken lightly. In fact, it pays to evaluate your company’s current situation, financial capabilities and plans before making that decision.

The question is, what option will offer the best return on investment (ROI) for your company?

For the three key stakeholders—the fleet manager, the chief financial officer (CFO) and chief operations officer (COO)—leasing forklifts provides an array of benefits that range from lower upfront costs to less strain on internal resources to newer fleets that break down less often. Here’s a look at the ROI that all three executives can expect from their decisions to lease forklifts.

The case for fleet managers

Charged with keeping their fleets operational and productive, fleet managers lease forklifts for a number of reasons. In most cases, they want to avoid equipment downtime and obsolescence and ensure that their operations maintain a certain level of superior, state-of-the-art machinery and vehicles. When leasing, fleet managers know that they’re not going to get saddled with outdated equipment that needs an undue amount of attention, care and maintenance. As material handling equipment ages, it breaks down more frequently and must be taken out of service. This can create major challenges for a busy operation that depends on the reliability of that equipment.

Also, fleet managers aren’t typically in the repair business. In fact, the last thing they want to have to add to their long, daily to-do lists is “change the oil and filters” or “change the tires” on multiple forklifts. By taking out a full maintenance contract with the lease, fleet managers can take a hands-off approach to maintaining their material handling equipment.

Finally, leasing allows fleet managers to do their jobs across multiple locations, not all of which are in sync when it comes to their material handling needs.

“Toyota can help that fleet manager truly understand the application and how the Toyota lift truck fits into it and quantify how many trucks are truly needed,” says Dave Crandall, former Toyota Industries Commercial Finance (TICF) chairman and CEO. That, in turn, translates into significant cost savings.

The case for CFOs

From the CFO’s perspective, leasing a forklift provides a very competitive payment versus owning such an asset outright. Continually asked to find ways to cut costs while also ensuring that a company’s logistics operations run smoothly, a CFO who uses leasing can more effectively budget for—and know ahead of time—what his or her company’s fixed equipment costs are going to be.

And rather than having to depreciate equipment over a specific number of years for tax purposes, most organizations can gain advantages by paying a monthly lease fee versus one upfront financial outlay. When companies know what their fixed costs will be on their leased equipment for the long term versus the variability in costs year over year with an owned and aging fleet, it provides budgeting security.

Crandall says, “CFOs have to ask themselves if they could be doing more with the cash that they’re using to secure lift trucks and whether one of Toyota’s customized, streamlined solutions can help reduce the fleet’s total cost of ownership and expense structure.”

The case for COOs

COOs have a lot on their plates these days. They must balance the need for uptime with the ongoing need to cut costs and gain efficiencies.

Rich Pignotti, TICF regional sales manager, says, “It really comes down to which equipment is going to be best for which application because a nonoperational forklift is costing you money.”

For COOs, leasing provides not only a highly reliable vehicle but also an efficient one that helps enhance the company’s bottom line. When leasing or financing equipment, COOs bring on a partner that will provide a flexible, customized solution that helps businesses to become more profitable.

This article was provided by Toyota Material Handling. More information is available at www.toyotaforklift.com.