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How to Calculate Equipment Rental Rates

August 28, 2024

How Are Equipment Rental Rates Calculated?

Determining rates for any product or service can be difficult at first, since you want to make sure that you're setting a price that is both beneficial to you and affordable to your ideal customers and clients. Multiple factors play a part in calculating fair rental pricing, including the following examples:

Length of time rental equipment is needed
Average price of job equipment is used for
Mileage, if applicable
Type of equipment
Type of technological features/speciality, etc.

You will want to evaluate every aspect involved in transporting the equipment, what kind of job(s) the equipment is used for, if the equipment is used for speciality work, and what kind of maintenance costs go into keeping the equipment available for rental. Once you've gathered this information, there are a few more steps to calculating rental rates that will work best for your needs.

Additional Steps in Calculating Equipment Rental Rates

Pick the Best Pricing Strategy: You can choose between flexible pricing that is based multiple factors including maintenance, length of time the equipment is rented out, and mileage used, if applicable. Flexible pricing requires more effort on your part to calculate, but is often bests aligns with the usage of the equipment. Fixed prices are straightforward and that can be an attractor for customers, but the turnover may be lacking during busier rental seasons as a result.
Market Research: Conducting market research is one of the best ways to see what competitors are charging for similar equipment rentals in nearby areas depending on other factors, including varying brands, resale values, average equipment lifespans, and maintenance. This helps you to establish a scale to work from, as well.
Calculate Hourly & Daily Rates: To best compare what works best for your business, you can calculate hourly and daily rates to set your profit margin and establish a base rental rate.

Contact Our Equipment Rental Company Today!

Lee's Rental provides backhoe, jackhammer, trenching, forklift equipment rentals and more throughout Big Spring, TX. If you're interested in learning more about equipment rentals, contact us today!

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