When should you rent, and when should you buy, a utility vehicle? That question often hits the desk of your operations manager during periods of growth or seasonal peaks.
From Fort Worth to Dallas, there are tons of industries sprawling across warehouse and manufacturing spaces that rely on internal transportation. Whether ensuring workers can safely navigate every corner of their manufacturing floor or moving large components between a loading dock and warehouse aisles, companies need the help of a utility vehicle.
Running a warehouse facility comes with the unique challenge of ensuring your bottom line moves as efficiently as your physical inventory.
If your facility is experiencing high seasons or has outgrown its current industrial utility vehicle fleet, not having that extra capacity can throw a wrench in your supply chain. Let’s explore some scenarios that highlight the value of both buying and renting.
Renting vs Buying a Utility Vehicle: Financial Freedom
Renting a utility vehicle bears many perks for your business. The biggest incentive to rent a utility vehicle, from a monthly operating budget perspective, is often keeping your working capital free.
While buying a new electric utility vehicle is an expenditure your company can spread out over several years, renting allows you to operate that particular truck or cart without dipping into long-term costs. For accounting teams, shifting the purchase into a rental can change how that utility vehicle is classified on a balance sheet. Moving from a capital expenditure (CAPEX) to an operating expense (OPEX) opens up financing for other projects.
Outside of the initial investment of buying versus renting, there is the question of maintenance and more unexpected costs.
If your rented utility vehicle breaks down, who fixes it? The short answer is someone else. Renter agreements usually require the equipment provider to handle any maintenance costs not caused by abuse or negligence. This can protect your team from the “hidden costs” of equipment being out of commission. There’s no need to staff your own electrical technicians to handle proprietary repairs — and that “red-tagged” vehicle won’t pile up on your maintenance lead’s desk.
- Does your equipment fluctuate by more than 25% throughout the year?
- Does your budget line item prefer fixed monthly payments that include maintenance?
- Is your facility transitioning to a different power source (electric)?
If you answered “Yes” to 2 or more of these questions, renting may be right for your business.
Seasonal Demand
North Texas is home to many industries that experience peaks in production or material movement. From retailers gearing up for the holidays to farms shipping during harvest season, companies whose equipment needs grow by more than 25% during some seasons should consider a rental program.
Renting an industrial utility vehicle during seasonal spikes allows you to expand your fleet for three months and then return the units once business normalizes — eliminating the headache of storage and upkeep on a “ghost fleet” that you really only use twice a year.
Technology Refreshes
Battery technology is advancing more quickly every year. With so many attractive options on the market, a facilities director should feel empowered to “test drive” new electric utility vehicle models whenever possible. If your company has been in talks with local sustainability leaders about carbon-neutral certification, you don’t want to be stuck with a clunky piece of equipment in five years.
Rental programs let teams try different makes and models of lithium-ion powered utility vehicles to ensure their run-times and charging infrastructure meet your needs.
Buying a Utility Vehicle: Long-Term Value
Of course, there’s a time and place for purchasing your own utility vehicles. Facilities with consistent year-round needs are perfect candidates for buying. When you own your utility vehicles outright, you can customize that fleet however you like. Some trucks may need specific racking to transport parts safely, and other programs might require towing hitches to supply trailers with material. These options might not be available through rental agreements.
The overall investment in buying a utility vehicle will usually be lower than renting, over the total life of the vehicle. With proper maintenance, your purchased equipment should last upwards of ten years. Once you pay off the initial financing, that vehicle adds to your facility’s overall value. Not to mention, purchasing industrial utility vehicles can allow your procurement team to take advantage of depreciation against your company’s taxes.
Maintenance & Customization
When you’re buying your own utility vehicles, you decide how and when those units are maintained. If your facility has extremely particular safety standards, using your own team of technicians can ensure every battery cell and bolt meets your standards. Technicians can take more pride in their work when they’re not handing equipment back to a different crew every week. Purchase programs eliminate “rental fatigue” and keep your operation running smoothly.
Before You Buy a Utility Vehicle
Do your homework: How often will you use the vehicle? If you can answer yes to the following questions, you may want to consider purchasing.
- Will the utility vehicle be used more than 15 days out of the month?
- Does your current shop have the tools and knowledge to maintain an electric utility vehicle?
- Is the project or contract your utility vehicle is supporting secured for at least 3-5 years?
- Can your accountant acquire better tax benefits through a financing program over leasing?
Your Dallas Truck and Equipment Finder
No matter which side of the buy-versus-rent fence you fall on, location is key when securing your next partnership. If you’re looking to minimize delivery costs on your rental units or need quick parts delivery for your owned fleet, ensure your provider has a strong presence within the Dallas-Fort Worth metroplex.
SWMHC has been serving the North Texas industrial community for over 50 years. Our team has a comprehensive understanding of how logistics fluctuate across different industries. After all, in the busiest industrial corridor in the state, “uptime is currency.”
Two of the most important questions we ask our customers are “Where are you located?” and “What brands do you currently use?” Electric utility vehicles used in Denton will have different battery maintenance schedules than units sitting in the Arizona sun. With over fifteen different truck brands, we have the experience and expertise to help you navigate these buying or rental decisions.
North Texas Tips
- Do your providers have access to parts for your specific brands? There’s nothing worse than waiting on parts that could arrive tomorrow if you worked with a local vendor.
- If you own your fleet, ensure your provider has technicians who can reach your facility (Dallas, Fort Worth, etc.) within 4 hours for emergency breakdowns.
- When renting tools or equipment, make sure your provider offers training credits that comply with OSHA standards.
Contact Southwest Materials Handling Co. | Your Partners in Productivity
Here at Southwest Materials Handling Co., we take pride in serving the North Texas industry for generations. As a family-owned and operated truck dealership, we hold ourselves to a higher standard of honesty and integrity. Our goal isn’t to make a quick sale and disappear; we view your facility as a long-term “solution partner”.
Whether renting out a whole fleet of industrial utility vehicles or ready to purchase your first Taylor-Dunn or Columbia electric unit, we’re here to help you navigate those choices. Every facility in the Dallas-Fort Worth area has different constraints. We understand you might be hindered by narrow aisles or looking to make your warehouse more sustainable. From our indoor showroom to our online vehicle selector, we’re here to keep your business productive.
Which brings us to our last point. We offer services that expand far past sales. Our team of mechanics provides premier fleet maintenance and emergency repair services to keep your vehicles on the clock. And when you’re ready to expand your warehouse knowledge, we also provide OSHA-certified training for all of our equipment.