Factors That Affect the Construction Equipment Rental Rate

Factors That Affect the Construction Equipment Rental Rate

Construction equipment rentals provide construction companies with a flexible and cost-effective method to deliver heavy construction equipment on time and to specified sites. Major construction equipment suppliers include; bulldozers, backhoes, excavators, loaders, boom lifts, cranes, forklifts, cable plows, generators, pressure washers, shredders, and many more. The heavy construction equipment market is predicted to see unprecedented growth in the next two to four years, resulting in significant cost growth for construction companies across the construction equipment rental Dubai.

Long-term agreement:

In the construction equipment rental industry, renting a machine is usually done for some time as a one-time fix. It is normally undertaken for those construction companies whose needs are not known until they need the machinery, and for whom the machines are not intended as a long-term investment. For construction companies, this is referred to as an on-site lease. 

Rental fees:

Major construction equipment rental expenses include rental fees, job-site administration costs, repair and servicing expenses, and maintenance expenses. The rental fees are based on the usage of the machinery and also include a charge for the removal and storage of the machinery when it is not being used. Job site administration expenses cover the operating expenses for the site such as power, gas, water, sewer, etc. which is inclusive of a cut-off cost when the lease comes to an end. These include travel, housing, and meals expenses.

Types of material handling lease:

Leasing material handling machines is the second largest segment in the construction equipment rental market. There are two types of material handling leases, namely, capital lease and resource rentals. Capital lease involves the payment of capital for machinery over a specified period. 

Consider financing options:

Other considerations to be made when renting machinery are the financing options available, the availability of used machinery, and the maintenance records of the rental machines. To avoid the burden of financing, most construction companies opt to take loans from banks. However, for large-scale projects, they can go for working capital loans from the banks. 

Service agreements:

One of the factors that have an impact on the rental rate of construction equipment rental services is the availability of spare parts and service agreements. These factors affect the overall operational cost of the construction equipment and hence, the rental rate. Some additional considerations that also affect the long-term average rental rate are the following: whether the client is going to renew the lease every year, if the client is going to use the same machine more than once during the year.

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