Cost elements

Purchase (one-time capital expenditure)

Financial leasing (off-balance sheet/on-balance sheet)

All-inclusive service rental (operating expenses)

Initial/Capital Cost

Highest (total asset value)

Medium (down payment/estimated residual value)

Minimum (first installment only)

Depreciation/Amortization

Depreciation is accrued on the balance sheet.

Off-balance sheet (mostly operating leases), with no depreciation; or depreciation under finance leases.

none

Financing costs

Bank loan interest or opportunity cost

Fixed lease interest

Included in the rent, but usually lower.

Maintenance/Repair Costs

Bearing all the costs, and with large cost fluctuations.

The cost is usually high, and you will still need to be responsible for it yourself or purchase the service separately.

Lowest cost, included in rent, stable and predictable costs.

Labor/Management Costs

High (requires professional maintenance personnel and spare parts inventory management)

Medium to high level (still requires management of maintenance processes, insurance, etc.)

Minimum (service provider responsible for all repairs, maintenance, and dispatch)

Spare parts inventory cost

High (critical spare parts must be available)

Medium

none

Residual value/disposal proceeds

There is (a residual value may be obtained upon disposal).

None (returned to the leasing company upon expiration)

none

Tax impact

Tax-deductible depreciation of assets

Rental income can be deducted from taxable income (operating lease).

Rent can be deducted from taxes as an expense.

model

TCO characteristics

Economic efficiency analysis

in conclusion

Buy

Total Cost of Ownership (TCO) fluctuates greatly and initial investment is high, but customized modifications and maintenance can be completely controlled.

Inefficient. Unless it's highly specialized and extremely long-life tooling, high maintenance and downtime costs will quickly drive up TCO.

Not recommended

All-inclusive service

TCO has the highest predictability, with maintenance and downtime risks transferred to the service provider.

Most efficient. The rental fee includes preventative maintenance and rapid response repairs, ensuring extremely high equipment uptime and minimizing downtime losses. Businesses can focus their resources on core manufacturing.

Recommended (especially for core production processes)

Financial leasing

Costs fall between the two, but self-management and maintenance are still required.

Medium. Suitable for businesses that want to avoid large one-time purchases but still want to eventually own the asset.

Consider carefully

model

TCO characteristics

Economic efficiency analysis

in conclusion

Buy

The initial investment is huge, the asset management burden is heavy, and the residual value handling is complicated.

Inefficient. Large-scale asset purchases tie up huge amounts of cash flow and result in residual value losses when upgrading equipment.

Not recommended

All-inclusive service

Highly flexible, the fleet size can be adjusted according to seasonal fluctuations (short-term leases or flexible contracts).

Highly efficient. All-inclusive services allow businesses to quickly expand or shrink their fleets according to business needs, ensuring sufficient capacity during peak periods and avoiding idle costs during off-peak periods.

Recommended (especially for scenarios with large fleet sizes and high demand elasticity)

Financial leasing

It offers medium-term asset solutions, but is less flexible than all-inclusive services.

Medium. Suitable for specific scenarios where there is a clear plan for the lifespan of the forklift and frequent equipment replacement is not desired.

Consider carefully