Buying v. Leasing Warehouse Equipment: Which Option is Right For Your Business?

Buying v. Leasing Warehouse Equipment: Which Option is Right For Your Business?

It is well known that warehouse equipment, from pallet racks and forklifts to drive-in shelving and mezzanines, is a considerable expense, especially for small and medium-sized businesses. For this reason, many business owners choose to lease their warehouse equipment instead of buying it outright. However, every business is different and has different priorities and financial requirements. If you need to bring in new or used warehouse equipment for your business this year, some excellent tax deduction opportunities might make you forego leasing and consider purchasing high-quality used material handling equipment from Used Warehouse Equipment.

Both Sides of the Argument 

Before we get into the specifics of purchasing and tax deductions, we must look at why people lease their equipment. Watch the short video below to learn more about the benefits of leasing warehouse equipment.

As you can see, leasing is an excellent way to reduce substantial upfront costs and have flexibility with which, historically, purchasing equipment could not compete. But, there are some drawbacks to leasing that cause many to second-guess their decision to rent their equipment. Here are two of the most common concessions:

  • You do not own the equipment. This reason is a bit on the nose, but some business owners find it hard to justify paying for storage racks or forklifts that they will eventually have to return or continue paying for indefinitely.
  • Trading in leased equipment for newer models can cost you in other ways. Implementing and training workers to use the more modern equipment can usurp valuable time at the warehouse, and can cause issues with dependent equipment already in the warehouse. 

Section 179: The Tax Break Loophole

When considering long-term business management, the initial expense of buying warehouse equipment is a strong deterrent for small-and mid-sized company owners, especially if they are not cash-rich. However, there is a new IRS tax benefit, Section 179, that gives companies an incentive to invest in capital equipment for increased productivity and revenue. 

With Section 179 in your back pocket, purchasing new or used warehouse equipment for your business is not as daunting as it once was. Unfortunately, this excellent opportunity only lasts until December 31, 2019. So, the time is ripe to put pen to paper, calculate your current and projected expenses and decide whether or not purchasing warehouse equipment is in your best interest. 

Typically, tax benefits are not the most persuasive reasons to buy warehouse equipment — however, if the price is right, you could use the tax breaks to your advantage and save thousands of dollars and plenty of work hours by purchasing our competitively-priced material handling equipment. For more information on Section 179 or our extensive inventory, contact our representatives at Used Warehouse Equipment today!

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