Since the early 20th century, when it was invented, the forklift has been an indispensable piece of equipment in warehouse and manufacturing environments. They are used to pick up and move merchandise from one place to another, and their manufacture and sale has created a billion dollar industry.

However, like any type of equipment, your forklift needs to be retired—sooner or later. The logical thing is to retire it at the end of its “economic life,” which is the point when the cost of operation exceeds the value that the forklift provides. But how do you know when exactly that point is, so that you can put your forklift “out to pasture,” so to speak? Here are three signs you need to look out for.

Increase in Maintenance Costs

Determining the cost of maintenance in relation to the forklift’s value is usually the easiest indicator of retiring your equipment. Like a car, a forklift can develop mechanical or electrical issues, and it would require parts and labor to get them fixed. Maintenance costs are easy to calculate during the first couple of years in a forklift’s life. In fact, within the early period—like the first year of ownership—there might not be anything to fix at all.

However, maintenance costs begin to rise after a few years into ownership, when several thousand hours of hours have been logged in. For instance, there might be no maintenance costs in the first year, but maintenance might cost around $2 per hour in the second year and $4 per hour in the third year.

By the seventh year of ownership or within 10,000 hours, you should expect to have started making major repairs or replacements. Components falling under this category include transmissions, motors, engines, and electronic systems. If you are spending more of the forklift’s purchase price on maintaining it, then it might be time to retire the vehicle.

Decrease in Productivity

An increase in maintenance time has a major impact on the forklift’s productivity. When the forklift is being repaired, you cannot use it. So, the longer you hold on to your forklift, the more downtime due to repairs you might experience. A loss of work hours, coupled with the funds used for the repairs, actually makes you lose a considerable amount of money. It is strongly recommended to strongly consider replacing the forklift after about six to seven years of ownership, or after 10,000 hours.

Another factor in the forklift’s decrease in productivity is outdated features. With the constant advance of technology, newer forklifts virtually render many of the older ones obsolete in terms of functionality, ergonomics, and safety. Getting a newer forklift is particularly useful for high-volume multi-shift operations.

Decrease in Trade-In Value

As maintenance costs rise and productivity declines, the trade-in value of your forklift plummets. Thus, it is not only important to know when to let it go for maintenance and productivity purposes. You can also get the most out of it when trading it for a newer forklift. If it is fully depreciated, chances are that it would not be worth trading it in. The ideal situation would be to get out the forklift at around seven years, when the vehicle’s trade-in value is not too far off from its book value.