What's In Your Rental Fleet?Written By Pam Gruebnau
Article Date: 03-01-2006
Copyright (C) 2006 Associated Equipment Distributors. All Rights Reserved.
Do you have the equipment your customers need?
In 1980, 57 percent of today’s dealers were in the rental business. In the 26 years since, the use of rental equipment by contractors, industry and municipalities has grown dramatically, both in dollars and units. And, although as recently as seven years ago, some dealers said they’d never rent equipment, today 99 percent of dealers have rental fleets, up from 89 percent in 2000.
That’s according to the new AED Rental 2006 study. To compile the data for the study, AED surveyed dealers, manufacturers, rental companies and end users about their rental activities. The objective was to capture a current picture of the construction equipment rental industry, document important rental trends, and provide operational comparisons and performance benchmarks for rental operations.
That 99 percent figure includes Heavy dealers (majority of equipment sold is 100-hp plus), Medium dealers (majority of equipment sold is <100 hp), and Specialized dealers (material processing and industrial equipment, and engines).
Not only do almost all dealers have rental fleets, the vast majority of them (92 percent) offer both rent-to-rent (equipment is returned after the rental period) and rent-to-own equipment (equipment is converted to a sale at some point during the rental period, usually for a pre-arranged price and applying a pre-determined percentage of the rental fees to the purchase).
Or as one dealer put it when asked the difference between rent-to-rent and rent-to-own, "Rent-to-own is equipment that goes out on rental and becomes a sale, and I’m very happy. And rent-to-rent is equipment that goes out on rental, but it comes back and I’m not so happy."
To find out what’s in those rental fleets, we asked dealers not only what types of products they have available for rental, but how many units they keep in the rental fleet. We also asked rental companies what they have in their fleets.
And then we asked end users what they rent and where they rent it. The following is some of what we found.
About 50 percent of end users use <100-hp crawler dozers in their work and half of that group rent them. As you might expect, those contractors are twice as likely to rent <100-hp crawler dozers from equipment dealers as from national and regional rental companies, although only 41 percent of equipment dealers said they have the smaller crawlers in their rental fleets.
One-third of end users told us they use larger – 100-hp-plus – crawler dozers in their work, and, just as with the smaller dozers, half of that group say they rent them.
Fifty-four percent of end users that rent larger dozers said they usually rent them from equipment dealers, although a surprisingly large number – 30 percent – said they rent the bigger dozers from national and regional rental companies.
Thirty percent of dealers said they have 100-hp-plus dozers in their rental fleets.
More than half of end users are using <100-hp excavators in their work and 58 percent of that group rent them. Half usually rent <100-hp excavators from equipment dealers, while a third rent them from national and regional rental companies.
To meet that need, 56 percent of dealers have <100-hp excavators in their rental fleets, compared to just 24 percent of rental companies.
Larger excavators (100-hp-plus) are used by 45 percent of end users, and 56 percent rent them. However, only half of those end users said they rent 100-hp-plus excavators from equipment dealers, while a third said they rent them from national and regional rental companies.
And, while 60 percent of dealers told us they have 100-hp-plus excavators in their rental fleets, only 16 percent of rental companies do.
Fifty-four percent of end users use mini-excavators in their work and a whopping two-thirds of that group rent them. About the same number of end users said they usually rent mini-excavators from equipment dealers (38 percent) as rent them from national and regional rental companies (41 percent).
However, if you add in the 12 percent of end users that said they usually rent mini-excavators from "mom and pop" rental stores, a total of 53 percent of end users are renting the smallest excavators from rental companies.
But, while end users said they’re more likely to rent mini-excavators from rental companies, 67 percent of
dealers have mini-excavators in their rental fleets.
Skid-Steers and Backhoes
Skid-steer loaders are one of the most popular machines in the construction industry, and more than two-thirds of end users told us they use skid-steer loaders in their work. Of that number, 44 percent rent them.
About the same number of contractors rent skid-steer loaders from equipment dealers (42 percent) as from national and regional rental companies (40 percent).
But rental companies are far more likely to have them in their fleets; 76 percent of rental companies said they have skid-steers in their rental fleets, compared to 68 percent of dealers.
While as many end users said they use backhoe-loaders in their work as skid-steer loaders (68 percent), only 35 percent rent them. Half said they usually rent backhoes from equipment dealers and a third rent them from national and regional rental companies. Correspondingly, dealers are more likely to have backhoe-loaders in their rental fleets (76 percent) than rental companies (59 percent).
More than half of end users said they need <100-hp wheel loaders in their work, and nearly 60 percent of that group rent them. Half rent the smaller loaders from equipment dealers and a third rent them from national and regional rental companies. Still, only 17 percent of rental companies say they have <100-hp wheel loaders in their fleets, compared to 45 percent of equipment dealers.
Only about a third of end users use 100-hp-plus wheel loaders in their work and most prefer to own them. Only a third of those that use 100-hp-plus loaders said they rent them. More than 50 percent rent 100-hp-plus wheel loaders from dealers and 28 percent rent them from national and regional rental companies. Just 12 percent of rental companies said they have 100-hp-plus loaders in their fleets – which is surprising, both because we didn’t expect so many rental companies to have big loaders and because so many end users say they are renting 100-hp-plus loaders from rental companies. Half of equipment dealers have 100-hp-plus wheel loaders in their rental fleets.
One-fourth of end users use ride-on trenchers in their work and 59 percent rent them. However, more contractors say they usually rent them from national and regional rental companies (42 percent) than from equipment dealers (32 percent).And, as you would expect, more than twice as many rental companies (37 percent) have ride-on trenchers in their rental fleets than equipment dealers (17 percent).
Nearly half of end users are using ride-on roller/compactors in their work and 59 percent rent them. A third rent them from dealers, while half rent them from national and regional rental companies. Add the 10 percent of end users that rent ride-on roller/compactors from "mom and pop" rental stores, and a total of 60 percent of end users rent rollers from rental companies.
Although more end users are renting roller/compactors from rental companies, a larger percentage of dealers have them in their rental fleets.One-third of end users told us they use walk-behind roller/compactors in their work, and 56 percent rent them. Half rent walk-behind roller/compactors from national and regional rental companies and 25 percent rent them from equipment dealers.
Although twice as many contractors said they usually rent walk-behind roller/compactors from rental companies, about the same percentage of dealers (25 percent) and rental companies (28 percent) have them in their rental fleets.
Aerial-Work Platforms and Scissorlifts
Forty-four percent of end users use aerial-work platforms in their work and two-thirds rent them. Only 27 percent of end users rent aerial-work platforms from dealers, while twice as many (54 percent) rent them from national and regional rental companies. Another 10 percent rent aerial-work platforms from "mom and pop" rental stores.
Thirty-six percent of end users use scissorlifts in their work and the majority (71 percent) rent them. Only 27 percent of end users rent scissorlifts from dealers, compared to 55 percent that rent them from national and regional rental companies and 10 percent that rent them from "mom and pop" stores.
Fifty-five percent of rental companies have scissorlifts in their rental and 44 percent have scissorlifts, while only one in five dealers has aerial-work platforms and/or scissorlifts in the rental fleet.
What’s in your rental fleet? The number one reason end users gave for determining where they will rent equipment is product availability.
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