I’ve just spent a great deal of time researching the equipment rental business.. (at the request of my boss) What I found amazed me. remember I’ve been doing this now for 15 years..
On major equipment like forklifts etc. The differances are amazing!
You could rent a new or near new forklift from a rental house like RSC or United for example and pay anywhere from $2500 to $3500 for the same thing.. (6000# 42 foot reach)
Plus each had a way to collect more from you.. For example one would charge you a flat 14 % for an insurance policy with a $500.00 deductable and several common items not covered.. Another had a relatively good insurance policy but would not take a contractors equipment policy, while some did..
One charged $125.00 an hour for clean up and leved it on everybody while another included clean up as part of the rental as long as it wasn’t paint or concrete.
Make up fuel varied a lot from $5.75 a gallon to market price.. One charged not only $5.50 a gallon but mechanics time at $65 an hour as labor..
Several had an enviormental charge which in all cases was pretty nominal. $5.00-$20.00
Several rental houses had daily charges weekly charges and monthly charges.. The grim part was that each played a differant game once you went over the monthly charge..
The expensive one charged $3500 for a month and then hit you for a weekly charge of $1155 and a daily charge of $550..
So if you kept it 37 days you paid $3500 for the first 28 days (everybodies month was 28 days long) $1155 for the 7 days of a week and $1100 for the extra two days. A total of $5755!
Plus all the other expenses.. (insurance, delivery,cleanup, fuel, salestax, etc.)
Others prorated it so the costs were much more competitive. However there was no standard method used for prorating.. None however were as simple as the dealers methods of prorating..
Lower rental rates could be had by smaller rental houses who often rented out older equipment. Their rates were as much as $1400 a month less than the major rental houses.. They too weren’t as complex in their rental calculations.. with most clean up was included and some neglected to specify insurance while all of them would accept contractors equipment policies..
Bigger outfits like RSC and United featured quick repair, replacement., availability. (assuming they had a replacement or the parts on hand) While smaller yards with older equipment failed to discuss the prospect at all. The reality is telehandlers tend to be very reliable.. Operators quickly learn that hotrodding or abusing the equipment risks spilling the load or tipping over thus they tend to be driven extremely carefully..
The best deal of all seems to come from Dealers..
Rental rates were as much as $1500 per month lower than rental houses for new equipment. plus they wanted contractors insurance saving you another 14% Clean up with most was included again except for paint and concrete. delivery was on par with the rental houses since they all needed to be delivered on a lowboy.
The logic for the lower rates was sales.. dealers need good used forklifts to sell and the best way is to make their own used forklifts. Few forklifts are traded in (In 15 years I’ve had 4, all traded because the contractor wanted a bigger machine)
Few rental houses are anxious to do rent to owns. Whereby the rent applies towards purchase. Most dealers are willing to at least speak about it.. some have severe limits while mine applies 100% for just about as long as you’d like..
Replies
What is the puchase price for a lift comparable to the one you were describing rental rates for. I believe it was a 6000# 42 foot reach. I know it will vary by brands or options but can you give a rough estimate what a new one would cost.
CCal,
Actaully the final price tends to be very similar.. Competition forces factories and dealers to sell pretty much for the same price. For example I often use my competitors price as my quote.. Heck I'll gladly match it on an apples to apples deal..
Anyway the bread and butter forklift tends to sell for around $75,000. 6000# 42 foot. options can add up to $10,000 over that price.. However usage can quickly remove $10,000 on a near new forklift.. (from a dealer, rental houses aren't anxious to sell near new equipment.. )
Couple of options you should seriously consider adding include foam filled tires.. Tires are the # 1 maintinance item It doesn't matter what brand.. nails are all too common, rebar and other metal tears them apart. Some brands require the use of ballast in their tires. If you get a leak and the ballast leaks out it's a major expense to get someone to come out and add it back in.. Tires are a major contributing factor in tip overs as well. It's pretty hard to tell if a tire has 75 PSI or 35PSI and when you have people 42 feet in the air or a heavy load up there it's not good to find out that the tires is soft from a nail hole you didn't notice!
In northern states you should definately consider having special fluid installed instead of normal hydraulic fluid. Forklifts are commonly used for a few minutes at a time thus the hydraulic fluid remains pretty thick in cold weather.. that thick fluid places a real strain on seals and fittings. It's not uncommon for many brands of forklifts to have hydraulic clyinders leaking in a few cold winters here.. rebuilding an extension clyinder for example can easily cost $1500 to $2000
If you use special fluid that problem is eliminated..
Auxilary hydraulics and side tilt or swing carriages are a really diserable option. Swing carriages are new and kinda turn a forklift into a mini crane. You swing the carriage from side to side and can place several roof trusses without moving the forklift. That plus you can swing your work platform along side a building that you might not otherwise be able to get at.
Add cabs and heaters if you work where winters are cold and you hate to sit on a wet seat.. ( that plus instruments tend to give less problem when they are out of the weather)...
Wider carriages are the norm for builders 60and 72 inch wide are common options Masons always use 48 inch carriages and that makes handleing long trusses hard..
Jibs and buckets are other common options.. and frankly I can't remember the last time I failed to sell a work platform with the forklift..
One option just starting to gain acceptance is remote control units.. You have a unit that operates all the controls from up in the work basket (except drive) and that allows one person to raise and lower extend retract and tlit or swing the workplatform saving real manhours..
Good grascios!
Should we be buying or renting?
blue
Blue,
It takes about 5 years to pay for a forklift and while you are doing so your payments are about $500.00 a month less than rent at the cheapest place would be..
Since forklifts have a usefull 20 year life your actual per month costs are like $375 per month.. Rent is only worthwhile if you only rent one or two months a year
Frenchy, I think I disagree with you..somewhat.
Rent might still be good if you were renting for 6 months. The reason I say that is because if you are off 6 months, the payment will make it very hard to stay solvent.
blue
Blueeyeddevil,
Ok, if you rent of six months you will spend 15 to 30 thousand dollars. a year. If you lease (with either a dollar buyout or a tax lease witha 20% residual) your annual payments would be between $14000 & $18000 a year. We offer skip payment programs so you can skip paying during the down months and make it up later. Interest rates aren't the only thing to look at!
Rent will likely get more and more expensive and never end whereby ownership costs (other than maintinance) would end after just 5 years with a dollar buyout and 7 years with a tax lease..
Forklifts have an effective 20 to 25 year life. Thus you will have at least 15 years of "free" use. They are so gently used as to be the equipment equivelant of driven by a little old lady..
Face it If you start hotrodding or abusing the forklift you will spill the load or tip it over. It only takes reloading a few bunkers of wood for the operator to get the message.
Forklifts used by masons are exempt! They are extremely abusive and I've yet to see a mason grease his lift.. (heck, all of the grease fittings on the front of the lift are covered with cement anyway!) Never buy a forklift used by a mason!
Back in 01 I bought a 97 Skytrack for 25k, used it for 18 months , then sold it for 23k.
A year ago I bought an 01 Lull for 35k, I might sell it in the fall, the dealer says I should be able to get 32 for it.
Why would anyone consider renting?
Jayzog,
I suspect that you might be in for a surprise this fall. The slowdown has demand for forlifts really soft.
Hold on though,, with the rate of housing required demand will be forced to increase or people will sleep on the streets.. America is about to touch 300 million people sometime in October.
People will either own a home or rent a home. In either case something will need to be built to accomidate them..
People will either own a home or rent a home. In either case something will need to be built to accomidate them..
Yes . By the consumer reports which doesnt have anything to do with construction it still shows the needs as strong if not stronger .
We are entering the rental boom but very soft resdiential sales.
Right now the rentals are a better deal but that has just happened this year.
Tim
Frenchy, hijackin you here but you're probably the best guy for a guess at this one.
A friend bought a seat for his 580 Case yesterday used for $500. It was one of 10 that came from trade ins from the city government.
Same customer bought all 10 used backhoes and wanted the seats changed to another type.
These traded in machines all had 300 hours or less.
Can you think of any reason a city gov would trade in 10 almost new machines?
Joe H
JoeH
Government organizations have access to really great deals.. factories often use the government purchasing power as their dumping ground for surplus equipment. and give them deals too good to refuse..
That plus cities and towns etc. are doing extremely well lately.. Property values are often increasing dramatically and with it the tax basis. No city manager I know ever wants to reduce his useage of taxes and in spite of more and more dollars coming in they constantly try to creep in additional fees and such..
cities and towns etc. are doing extremely well lately
You're right about that. They bought all new police cars last year & a few nice SUV policemobiles too.
Tax dollars being squandered as fast as they get it & needing more all the time.
Joe H
"Property values are often increasing dramatically and with it the tax basis. No city manager I know ever wants to reduce his useage of taxes and in spite of more and more dollars coming in they constantly try to creep in additional fees and such.. "If they reduced the rates to only what the need them it would be easier to live on Wallmarts salary.
very good BillHartmann,
I agree (and it put agreat big grin on my face)!
Excellent post. Maybe offer an expanded version as an article for FH or JLC?
Allen
Frenchy;
Generally, what you have posted is true....but I'll throw out another scenario: My small crew and I do everything from custom homes (foundation to roof) and some renovations, remodels and additions.
In addition, I own a fair sized rural property with mountained timberland along with riparian areas along a large creek and some pastureland.
In a given year, I may use a dozer, a front-end loader, a trackloader, a large or small excavator, a telescoping forklift or a large boomlift.
I can't justify buying or leasing all that iron.
I mostly rent from RSC or United and have negotiated my own rates for the equipment I need. Like you, I have been at this for over 15 years and have built a relationship of trust with the rental firms. I do my own refueling, clean up the equip before I return it and tell them about any operational problems I encountered.
I often rent on weekends for short jobs, especially at home, because they assess a 1 day rate and only charge more if I exceed 8 hours on the meter.
I do own a small skid steer and a D-4 Cat, but I'll often rent even these items if the job entails something my own equipment is too slow or not tooled up for.
And, it's been my experience that the rental firms are pretty willing to arrange rent to own, especially on older equipment. RSC in my area keeps a pretty low-houred stable of machinery so I can usually be assured of having a problem-free experience without the hassle of long-term maintenance.
They also accept my Inland Marine insurance binder.
Notchman,
Renting a piece for a few days or weeks does make sense.. Heck I rent for short term and like you I have a great relationship with my rental house.. However the rental house does make a profit. plus they have expenses of ownership that an owner doesn't.
I rented a nail gun to roof my house and when I was finished after just a month the rent was equal to the retail cost of a brand new gun. That was over nine years ago. I still look at it and notice that nine years later they still are getting rent from it. (It has a purple splotch of paint on the housing so I know it's the same one)...
Rent includes the basic cost of the equipment, an assumption that it will require far more maintinace than ownership. That it needs to be at 100% all of the time.. You couldn't rent out a piece of equipment that needed a little minor work such as a defective door latch or broken windshield wiper.
The cost of advertizing, the cost over other overhead and accounting, bookeeping, insurance ofr rental equipment is much higher than insurance n equipment you own,
and finally the big one, profit.
good post... if i were starting out.. i'd wanna be just like dieselpig and buy a lift
or maybe blue's crane.. but i think the man-platform like diesel & tim have is more versatile and useful to a remodeler / addition type operation we run
Mike Smith Rhode Island : Design / Build / Repair / Restore
Mike,
I sell and rent both man lifts and work platforms.. I would never own a man lift!
They are too specialized and far too limited in ability as well.. In addition the maintinace on man lifts is tremendous.. Many times what is required on a forklift..
To give you an example the factories all put several spare wires int their loams.. That is so when the wire breaks they can transfer the circuit to another wire. Periodically the whole loam needs to be replaced which is a monumental task.
Manlifts used in Sandblast or painting operations may require loam replacement every other year or more often!
They have extremely limited rough terrain capability.. the drive is hydraulic and not very effective when the going gets rough.. They are extremely heavy for their capability. In addition the powerplants tend to be extremely fussy especially the older air cooled ones..
All of them have tiny lifting capacity limited to 500 pounds.. that's not 500 pounds plus the operator that is 500 pounds total.. Most have tilt limits of around 5degrees or so That is when the base is more than 5 degrees out of level it won't boom up.. They are designed to operate on flat level improved ground..
Few have decent sized baskets. none are as large as a forklifts basket.
They do have their place.. some people are happy with them.. I simply would not choose to own one in leu of a forklift..
That said for your operation Mike, I would suggest one of theo tow behind models.. 40 feet is possible sometimes more depending on brand.. they tow behind a pickup and you place them where you will be working. They have no travel ability, rather you lower it to the ground and then move it to the next spot. much easier on the lawn than a manlift that will travel and much cheaper to purchase..
i saw one of the tow-behinds at the yard of the local rental shop
possibilities
as for man-lifts
i was really referring to the rough terrain forklifts that dieselpig & tim uhler have
they both have man lift cages that attach to the forks
i think tim has a 16' one
they really seemed to creat the versatility i would need to justify owning one
the job-to-job transfer and the between- job storing would be problematical
Mike Smith Rhode Island : Design / Build / Repair / Restore
I hear you. Mine's parked in my driveway right now. Looks a little out of place next to the wife's Civic. View Image
We've got ours stored on an empty lot in the last subdivision we worked in....I think. No one's looked at it for awhile and maybe someone stole it.
I wonder what our theft policy looks like.
blue
Park it on the other side of my wife's Civic if you want.View Image
You were handy being last.
I normally rent like some one else here .
I rent hoes from Kubotas to Case 550s .
They may ask one price but Jew is gonna break them down.
I dont rent that much but DW says I do. She wants me to buy a hoe and I wont . Thats been goin on for a few years between us .
Ive rented a lot of scissor lifts for drywall and painitng. Theres somthing to say for them. Theres no place good to store them and they are useless not working . I guess I have rented one enough to own one , but Im really happy not having one to store as they would have cost more .
I like to rent the small kubota and trailer it for the weekend and get charged for one day . They never have looked at the hours or said any thing about it . I think thats because the owner doesnt work there .
They never say anything or charge anything for clean up of a lift . Ive yet to clean up my first one . Ive had some lifts covered with drywall mud and a few with paint but I dont so the ladder any more as I mask the unit off with masking paper and drape plasitc from the sides. Ive also rented several that were overspray painted already.
As a side note hearing Frenchy talk about care .
I bought a 75 model 9.9 Evinrude new . From a couple of tips I chose to live by ;
It always gets premium gasoline and top grade mixing oil. [both expensive ]
I run a filter on the gas line and change tanks often so I can clean the previous tank as a temporary spare .
I didnt think the water impeller was pumping as well as it did so I had a mechanic change it and give it a tune up. While he had it on the bench , I requested the cylindars checked. 148/148. He checked it again in disbelieve since I use it all four seasons. His comment was its the same as new and better than some new ones .
That kinda care must pay for everything but it doesnt get it . The only reason that motor gets that care is because it sometimes carries me as far as 15 miles away from my truck.
Tim
Sorry Mike,
I should remember that not everybody is aware of correct terminology of various equipment.. It certainly would be easy to make that mistake.. I apologize..
For future conversation rough terrain telescopic forklifts are technically called telehandlers in order to not confuse them with the straight masted rough terrain telescopic fork lifts that look like backwards tractors, (which are called tractor lifts).
The basket or platform on a telehandler is called a work basket and the equipment you see driving itself around that telescopes out to lift a person up to a job is called a man lift (which really gets confusing because technically scizzor lifts are called man lifts as well) Man lifts come in two types.. One is a Knuckle boom which means it has knuckles or additional places where it flexes providing additional ability in certain applications while the other is a straight boom man lift.. which will have the most load capability. either straight masted man lifts or knuckle booms can have a jib which operates seperately from the main boom.. 125 feet is available and there even are several 250 foot models out there.. ( which requires a whole "nuther bit of courage to get in and operate since they tend to be sooooooo flexible it's like being on the end of a giant fly rod)...
One other piece of equipment is called a Push-around It is commonly used by electricans in tight quarters in order to raise themselves to the ceilings of tall rooms like a basket ball court.. 30 plus feet is available and they roll around easily and can be brought in thru elevators etc.. Plus they tip into the bed of a pickup very easily..
I have never seen the term "telehandler" before. Interesting. I have these units referred to as "shooting boom forklifts" and "extensible boom forklifts" among other terms.What is the story on insurance when renting. I have rented a couple of large manlifts as a homeowner and no mention was made of rental insurance other than one yard required me to have at least $500K in liability insurance (they wanted $1 million, but no one would write such a policy in Calif.)
"(they wanted $1 million, but no one would write such a policy in Calif.)"Should have been easy to get, but not as a HO policy, but as an unbrella policy that takes over above the HO policy.
CaseyR
If you read the fine print on most rental contracts you are required to return the unit in the same condition it went out in except for normal wear and tear. If you damage it you will need to make it good. When dealing with $75,000 telehandlers that is a risk I wouldn't want to take..
The trouble is the insurance policy offered by most rental houses (Including us!) leaves you exposed to too much (IMHO) For example if you tip it over and do the typical 18,000 to 25,000 dollars worth of damage that is considered abuse and you are responsible..
Gulp!!!!!
Are you also aware that you need a license to operate a telehandler?
Since December of 1999 all forklift operators are required to be licensed. The sad thing is not every dealer is even willing to assume the risk and effort to make sure that people have training. approximately 15,000 new telehandlers every year are sold (and have been since the mid 90's ) so somebody is new to operating them..
I used to offer a license with the sale of a telehandler and do the training right on the job site.. When the companies attorney explain the additional liability I assumed by conducting training in the field rather than in a classroom I was forced to stop.. I'm still a licensed trainer but I have my customers come in for training rather than risk it..
There are two kinds of license.. First you can get an operators license which is a one short day course and involves actual hands on use of equipment and second you can become an instructor which takes two very full days (and involves hands on use of equipment)
technically if you have an operators license from one company it's void if you change jobs. You are supposed to get trained on that particular piece of equipment.. Thus far I haven't seen the OSHA inspectors worry about that, (but then they let us sell 16 foot wide workplatforms up to last year and the rules clearly said they weren't legal..)
In fact I only recently heard of OSHA inspectors even writting tickets for operating a forklift without a license, previously they would give warnings.
hey mike,
I have to agree with frenchy ,I mostly due commercial work and allways rent.
transportation and maintenance is your headache when you own,lifts break all the time. Add it to the bid then get rid of it as fast as possible.
dan o
Are you talking about man lifts or fork lifts? I believe Mike is talking about forklifts. And those don't break down very much at all and service intervals are few and far between in residential framing and remodeling. If you an keep a telescopic forklift busy for even 10 months a year, buying is the only way to go.View Image
dieselpig,
I have to agree with dieselpig, When I sell a new forklift to a customer I tell them to set aside $500.00 a year for maintinance.. The first year they won't spend anything and the second just enough for an oil change
By the seveth or eight year as the tires need replacing or recapping the bank might start to draw down a little but most of my customer have plenty left over when they are done with the forklift 20 years later!.
Surprisingly little repairs are required although there is no way to protect against stupid.
"The mirror broke"
How'd the mirror break?
"It got hit by a 2x4 dropped from the roof"
(clearly a case of defective mirror and should be replaced under the warrantee)
"The wipers don't work".
What happened to the wipers?
Remember that Ice storm last winter? Well they froze to the windshield and kept burning fuses so I used a bigger fuse,..
" The axles seals leak"..
what happened,
Oh they got wrapped in wire and then just started to leak!
Anyway enough whinning..
Oil changes occur about every 200 hours. for a typical builder that's about once a year..
I suggest that you have the dealer do at least the first one and once in a while have them do one even if you like to change your own oil. The reasons are as follows.
The first one will show you just how much oil will need to be disposed of.. (5 gallons typically) the mechanic will also show you some of the things to look for..
second
do not make the mistake of using will fit filters!
While there is not a great deal of differance in brands between factory filters for the engine and fuel system, the hydraulic system has a fliter that is extremely expensive at the dealer and extremely cheap if you buy a will fit one..
Dramatic differance in cost..
You see the factory hydraulic fliter has a bronze mesh screen in it designed to operate with the thousands of pounds of pressure in a hydraulic system.. the will fit is designed to operate in the range of a hundred pounds or so..
You hit that paper filter with thouands of pounds of hydraulic pressure in a typical system and the paper will shatter in a bizzion pieces.. sending mesh and paper everywhere!
It costs a fortune to clean up and the machine won't operate with it floating thru the system.. If you shut off right NOW!!!!! You won't score the cylinders and rip out seals But you will need to take apart every hose cylinder and valve.
The reason you need a factory mechaanics to look at your machine on a regular basis is simply preventative.. You are used to looking at it and you might not notice or even know when something is slightly wrong and needs adjustment..
If the boom is a little lose you're probably familar enough with it to ignore it. A mecanic will make quick work of adding a few shims behind the wear pads and get a much tighter boom at nominal cost.. Hmmmm that seepage means that a fitting is loose or a new seal needs to be installed. Whatever a leak is a warning..
Do you know which four fitting on every forklift should be greased every 10 operating hours?
The mechanic should tell you if the salesman didn't (please ask)
You are aware of the advantages of sythetic oils on equipment like a forklift aren't you?
Hydraulics stiff in the cold?
ask me how to correct that issue..
Frenchy, we have a skytrak and I have never heard that there are four fittings that need grease every ten hours...and I asked the mechanic!
How do you deal with the cold?
blue
Blueeyeddevil,
The four fittings that need grease every 10 operating hours (about once a week for a framer, daily for a mason) Are the two that the boom pivots on.. and the two the the rear axle pivots on. If you don't grease those regularly there is quickly metal on metal wear on those pins. The really grim news is the two on the rear axle. Most all booms have bushings in them and you can pull the boom, knock out the bushings, put in new bushings and align bore everything back into shape, buy new pins and reassemble.
The Pins on the rear axle however need to be removed, Welded to oversize, machined round and to size and then reinstalled.. Really a tough job if as on some forklifts the pins are cast into the rear axle housing..
after the rear axle is pulled!
So a few cents worth of grease really pays off in those four locations..
To check if things have gone too far raise the rear axle. (On a Ingersol Rand because the boom is stiff enough you can just overload it and extend it out untill the rear axle picks up) I'm not sure if you can get away with this on the Skytrack.. In the mid 90's when Skytrack was sold they cheapened up the boom and if you overload it it will bend permanently) So you might be better off not risking it and simply jacking up the forklift and see if the rear axle is loose.. Or wait, when it gets bad enough it will start to blow u joints.. While it's up on stands, grease the fittings and then grease it again once it's back on the ground.. (you'll need to do that if you haven't been greasing it every ten hours as required). You can check your owners manual but I'm pretty sure it's that way. I know for absolute sure that it is on Lull, Cat's, Gehls, and Ingersole Rands.. Since Lull and Skytrack are owned by the same company and use the same axles I'll bet two dog bones that is the case..
With the massive weight on the boom diassembly is the only way to really tell.
Now for how to deal with stiff controls in cold weather.
On an Ingersol Rand it's easy.. You order the cold weather package. It comes with (among other things) special Hydraulic fluid for cold weather.. ON every other brand of forklift,.
Drain the hydraulic fluid, change the filter. replace the hydraulic fluid with synthetic fluid.
Now don't be surprised if you don't recieve full benefits right away.. just about half of the fluid remains in the system when you drain it.. In the lines, in the rams and in the fittings & valves. You may half to repeat because half of the fluid is still regular old thick hydraulic fluid.. Drain it again and it's down to a 1/4 once again and you'll be broke (did I mention that synthetic hydraulic fluid is really expensive? Over11 dollars a gallon when purchased in bulk). (I haven't checked lately
Now the bad news, When you operate the forklift in cold weather the hydraulic pressure is often way over what the seals are rated at.. and they tear or rupture. Since they are double seals in every case that I know of, you may only have slight weeping showing and if you wash the forklift periodically it may not be real obvious..
However once you go to synthetic fluid every torn seal will show up! there goes all that expensive fluid on the ground and here comes the rebuild charges..
Maybe it's better to let sleeping dogs lie.
PS the special fluid in Ingersol Rands with the cold weather package isn't even as expensive as regular hydraulic fluid.. but you need special seals for it..
blueyeddevil,
If the mechanic wasn't factory trained (few actually are) he might not know.. especially when you consider that most dealers sell a lot of equipment and their mechanics are expected to know something about everything, but not everything about anything..
Few salesmen have my level of experiance and almost none were former wrench benders who get their kicks learning details like this..
Do you know which four fitting on every forklift should be greased every 10 operating hours?
I would guess it would be the telescopic boom the bearing at the end there would be a lot a stress there.
or the main pivot and the lift cylinders