Innovative data providing first-time insights on equipment incentives, dealer service and manufacturer signals (and more coming).
Easily search for active financial incentive offers from most manufacturers.
Compare benchmarks to identify service investment levels across 20+ dealers.
Identify critical signals from the investor calls of equipment manufacturers.
Innovative data providing first-time insights on equipment incentives, dealer service and manufacturer signals (and more coming).
Easily search for active financial incentive offers from most manufacturers.
Compare benchmarks to identify service investment levels across 20+ dealers.
Identify critical signals from the investor calls of equipment manufacturers.
As you enter a rental agreement, there’s more than just the base rental rate. Key components of a rental agreement include:
Within terms and conditions, you are normally agreeing to a standard amount of usage per week, as determined by a number of shifts. These shifts are then connected to a range of allowed utilization hours of any specific machine. A snapshot of that table, is below.
Note that each row, above, equates to 1,2 or 3 shifts per day (per week). The first row represents one shift per day (which equates to 40 hours of potential utilization per week), while the second row represents two shifts and the third row three shifts (or greater).
The first column is the “Rate Multiplier” column and is critical in calculating Overhours Billing. It is multiplied by the base rate to calculate the Base Rental Rate part of your invoice. This is used by rental suppliers to ensure that increased utilization equates to a higher total rental rate expense.
Let’s illustrate via an example. Say that your base rate is $1,000 per week and your agreement assumes 1 shift per day. The total expense per week would be:
Rate Multiplier x Weekly Rental Rate = 1.0 x $1,000 = $1,000 per week
Since 1.0 represents expectations of 1.0 shift per day, and it was inline with agreement expectations, all is well.
Now, let’s say that one week you use the machine 45 hours, pushing your rate multiplier from 1.0 to 1.5 using the table above. In this bill the math would be:
Rate Multiplier x Weekly Rental Rate = 1.5 x $1,000 = $1,500
The additional $500 would be considered Overhours Billing, or the gap between agreement expectation and above expected equipment usage.
One of the biggest misconceptions about Overhours Billing is that equipment rental companies charge for various extras to make a quick buck.
Overhours Billing comes down to the fact that equipment owners need to cover fixed and operating costs of equipment for a particular time period that exceeds the one set in the rental agreement. That’s especially important in case of harsh equipment usage during overtime, which would incur higher maintenance costs and potentially expensive repairs.
Some of the expenses construction equipment rental companies need to cover include:
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