10 Things You May Not Know About Renting

Sept. 28, 2010

Renting equipment has become so common that it's hard to overlook. But gathering anecdotes by driving by construction sites hardly makes anyone an expert on rental choices.

Renting equipment has become so common that it's hard to overlook. But gathering anecdotes by driving by construction sites hardly makes anyone an expert on rental choices.

The growing population of machines in rental fleets suggests that renters are exercising the option more often. When you ask people about how they prefer to put machines to work, however, you discover some interesting things about how renting fits into the scheme of acquiring horsepower that includes buying new, buying used, or leasing machines. Ten observations noted here are drawn primarily from the results of a Construction Equipment study that did just that. The research addressed how equipment managers usually choose to acquire various kinds of machines.

We hope this sample of results challenges enough of the assumptions that might arise from drive-by impressions that you'll consider all the alternatives the next time you're looking for equipment to put to work.

Renters Steady, Rentals RisingThe percentage of fleet managers who rented equipment soared in 2000, when most of the industry was surprised with more work volume than forecast for the year. But by 2001, the percentage of those who rented dropped back to 1999 levels, where it had been holding steady since 1997.Obviously, regular renters are renting more machines, though. Pieces of equipment in rental fleets across the United States increased 24 percent to nearly 60,000 units between 1995 and 1999 (the last time the Universe of Construction Equipment study was compiled).
Dealers as Popular as Rental StoresNearly as many people usually rent from equipment dealers as rent from rental companies, but the variations by fleet size are telling. The larger the fleet, the more likely the manager rents from a dealer. The smaller the fleet, the more likely its manager rents at a more traditional rental outlet. No other sources of rental equipment scored even close, but a notable portion of managers of the largest fleets (14 percent) usually rent from other contractors.
Few Rentals End in a SaleThe larger the fleet, the more likely its manager will rent machines with an option to buy. But only 44 percent of rental-purchase contracts end with a sale.
  • Half of Building Contractors Rent Pavers
    Renting pavers is nearly as popular as buying used

  • One Reason to RentLimited use for the machine stands dramatically above any other reason to rent. Even the distant trailing reasons are, essentially, restatements of "limited use for the machine."
    Cranes: Buying Used Rivals RentalsNearly as many people usually buy used cranes as rent them. Fifty-seven percent of those managing the smallest fleets usually rent. Only 22 percent of managers of over-$10-million fleets rent, and 43 percent of them usually buy new cranes. Managers of fleets in the $1-million-to-$10-million range keep the used market lively—46 percent usually buy used cranes.
    Underground: More Renters Than BuyersMore managers usually rent than buy new trenchers, directional boring machines, cable plows and such. The percentage is inflated by 50 percent of the vast population of folks who manage fleets worth $1 million or less who usually rent utility installation equipment. Only 30 percent of decision-makers for fleets valued over $1 million usually rent underground equipment (half of them usually buy new.)
    Small Fleets Lift Fork RentalThirty-five percent of the telescopic forklifts and half of the rough-terrain vertical-mast units in the United States are part of fleets valued at $1 million or less. Managers of these smaller fleets prefer to either rent or buy used machines (46 percent). This large target market, centered among the building trades, influenced rental-fleet buyers so heavily during the latter 1990s that virtually all of the new telescopic forklifts put in service between 1995 and 1999 (plus 40 percent of the vertical-mast units) went into rental fleets.
    Light Earthmovers: Population, Not PreferenceBackhoe-loaders, skid-steer loaders, and other light earthmovers are a rental-lot staple, but not because managers prefer to rent them. Low entry cost makes them easier to buy most of them. But because there is such great demand for these machines, there are more than 170,000 skid-steers and backhoes in rental fleets just to pick up the odd jobs. That's more than the entire population of wheel loaders in the United States—dramatically more than all the crawler dozers or hydraulic excavators, and more than all the graders, haul trucks, and scrapers combined.
    Access Equipment: Buyers Edge Out RentersThe larger the fleet, the more likely the manager is to buy new aerial-work platforms—nearly 60 percent of people managing fleets worth $10 million or more usually buy new. Forty-three percent of those at under-$1-million fleets rent. General building contractors are the most likely type of contractor to rent, at 47 percent.