Renting heavy equipment is a major step for every small business owner. Having the machinery you need helps your company take on major tasks more effectively and leads to better bottom-line results. Getting the right equipment in the right place at the right time is simply a vital consideration. If you missed Part 1 of this series, you’ll want to start there, with assessing your project, financial situation and anticipated equipment needs.
Understanding the core components of a rental agreement
There are three major pieces of every rental agreement. Recognizing what each of them means for your rental agreement leads to fewer surprises and a deal that takes all of your needs into account.
Dealers need to have a good understanding of the hours you plan to actively use the equipment to create an accurate rental agreement that’s effective and fair for everyone involved. This is beyond the high-level months, weeks or days estimate you may figure when you decide you want to rent a piece of equipment. Although it can be difficult to calculate a near-exact number in some situations, thinking your upcoming project through and developing as accurate an estimate as possible helps your dealer help you.
The number of hours you use your rented heavy equipment over the course of the agreement, on a daily, weekly and monthly basis, is a primary determinant of your rental rate. Going too high on your use projection could leave you paying more than you should - another very important point to keep in mind.
Your specific needs for the configuration of equipment also impact the terms of the lease and the payment you make each month. If you can use the machinery as-is or with just a few small modifications, there won’t be much of a change from the base price. However, a more significant change in configuration can lead to a noticeable increase in cost. This is one area where knowledge of other options and a detailed conversation with your dealer can make a big difference. If you ask about similar equipment that could fill the same role without extensive changes in configuration, you may find a way to get the gear you need without spending more than you’re comfortable with.
Many dealers have a proximity clause in their rental agreement, which means you might have to pay more if the equipment is used for a destination project. Although not a factor for every small-business owner, it’s definitely worth remembering if you travel an appreciable distance to complete some jobs. Ask about the proximity clause if you might travel to a jobsite with your equipment, and your dealer should be able to point you toward a provider in that area who may be able to give you a better deal.
Making the most of negotiations
Along with the three foundational elements of a rental agreement, keep these two pointers in mind for the best possible negotiation:
Avoid rush delivery fees and the possibility that your dealer won’t have the necessary machinery on hand by starting the conversation well before the heavy equipment is needed, whenever possible. Some rush jobs are unpreventable, but many projects are known about well ahead of time. Keep your dealer in the loop and make an agreement early on to maximize savings.
5. Project Length
Talk about the specifics of your project with your dealer before requesting to rent individual pieces of equipment. They can recommend the best choice for your unique situation, whether that means leasing or including a rental purchase option in the agreement if you plan on doing a lot of similar work in the future. An addition or change can save you money while providing the exact equipment you need.
These tips for renting heavy equipment give you the tools you need to have the most productive, cost-efficient and positive discussions and negotiations possible with your equipment dealer. Use our advice to get your job up, running and moving in the right direction.