The end of your forklift lease is an opportunity to evaluate whether your current fleet still meets your needs. While many businesses simply replace leased units with similar new forklifts when a lease ends, you might find that your operation, budget, and growth plans have changed.
Before you renew your forklift lease, replace the truck, or purchase the equipment, take a closer look at your material handling fleet. Here’s what to do as your equipment lease comes to an end.
Step 1: Inspect the Forklift Before the Lease Ends
Before making a financial decision, understand the condition of every forklift coming off lease. Review the lease terms to determine what condition the equipment must be in when it is returned. Normal wear may be acceptable. Damaged tires, seats, body panels, attachments, or other components could result in additional charges.
What to Check During a Forklift Lease Inspection
Schedule an inspection early enough to address potential issues before the return date. Your Shoppa’s Customer Service Specialist (CSS) can identify needed repairs and help you compare the cost of completing the work with the potential charges for returning the equipment as-is.
A lease return inspection should cover:
- Current operating condition
- Tire and seat condition
- Visible damage
- Outstanding maintenance needs
- Hours of use
- Lease return requirements
Do not wait until the equipment is scheduled for pickup. Early planning gives you more control over repair costs, scheduling, and replacement availability.
Step 2: Review Your Forklift Fleet Usage and Needs
The fleet you needed at the beginning of your lease term may not be the fleet you need today. Review the usage data for your unit, including:
- Annual operating hours
- Application and work environment
- Capacity requirements
- Lift height
- Attachments
- The type of work each forklift performs
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Questions to Ask During a Forklift Fleet Review
Use the end of the lease to reconsider both the size and makeup of your fleet. Ask yourself, your warehouse and equipment managers, and your operators:
- Do you still need the same number of forklifts?
- Are some units consistently underused?
- Are you renting equipment during recurring peak periods?
- Would a different type of forklift better fit the application?
- Could an electric forklift replace an internal combustion unit?
- Are you paying for specifications you rarely use?
Some companies repeatedly order the same number and type of forklifts without verifying whether that equipment setup still meets their operational needs. Usage and equipment specifications can also affect lease payments and residual values. A fleet review can improve performance and deliver cost savings.
How Usage and Specifications Affect Forklift Lease Costs
A forklift lease quoted for 2,000 annual operating hours may cost more than necessary if the truck is only actually used for a few hours each day. Equipment specifications can also affect residual value. An uncommon mast or highly specialized configuration may have a lower residual value than an equipment configuration with higher demand. Rely on your Shoppa’s Territory Manager to help ensure your lease terms and specifications reduce your cost if needed.
Step 3: Decide Whether to Return, Replace, or Buy the Forklift
Once you understand the condition and usage of the equipment, consider your options.
Option 1: Replace the forklift
Replacing the unit may make sense when:
- Maintenance costs are rising
- The application has changed
- New equipment would improve safety or productivity
- You need different capacity, height, or attachments
- The existing unit has accumulated significant hours
- You want to standardize or modernize the fleet
Replacement does not always mean selecting the same model again. This is the time to evaluate alternatives like used forklifts, electric forklift models, different classes of equipment, or updated specifications.
Option 2: Buy the Forklift at the End of the Lease
Buying the equipment may be practical when the forklift:
- Is in good condition
- Has relatively low hours
- Still fits the application
- Has substantial useful life remaining
A well-maintained Toyota forklift can last well beyond its initial lease term (far longer when taken care of properly), as could a unit that has accumulated only a few thousand hours during a five-year lease.
Understand the Forklift Lease Buyout Price
When you decide to buy equipment at the end of your lease, purchase terms depend on the original lease structure. Most leases are fair market value leases, with the purchase price set according to both equipment and market conditions.
Option 3: Extend the Forklift Lease Temporarily
An extension can provide breathing room while you wait for replacement equipment or finalize a fleet plan. Just make sure not to let an extension become the default without reviewing the cost. Continuing to pay for equipment that no longer fits your operation can become expensive over time.
When to Start Planning for the End of a Forklift Lease
Begin the process several months before your lease ends. That gives your team time to:
- Inspect the equipment
- Review fleet usage
- Compare financial options
- Identify needed repairs
- Plan for equipment lead times
- Plan for pickup, return, or replacement
Bring operations, purchasing, finance, and the employees who use the equipment into the process as needed. The person approving the purchase may understand the budget. The people on the floor understand how the forklifts perform. Both perspectives will help you make the right decision.
Overwhelmed by Your End-of-Lease Options?
Talk to an expert. Shoppa’s can inspect your current forklifts, review fleet usage and spending, and help you decide whether to renew, return, replace, or purchase your equipment before your lease ends.
Get a complimentary consultation