Equipment rentals are an increasingly large segment of machinery found in dealerships and on job-sites. That’s why recently on the blog we’ve been discussing popular Reasons to Rent and the growing phenomena of Peer-to-Peer rentals. But how much are rentals really growing?? Understanding the current state of the industry, and how it will continue to evolve into the future, is essential for both equipment dealers and customers who want to make the best choices in their work. So today, we’re breaking down Equipment Rental Trends and asking How Big is the Boom?
First up, what type of rentals are most popular? Among those who rent equipment, over 90% have conducted traditional, short-term rentals and almost 45% have rented with a purchase option. Meanwhile, peer-to-peer rentals are spiking, with a record-high 14% of renters participating. Each type of rental has its benefits, but why are people renting equipment at all?
According to a 2017 report by Construction Equipment, nearly 80% of individuals renting equipment do so because they only need limited use of a machine, which would not be worth the full purchase of an expensive piece of new equipment. Similarly, almost 46% of renters seek out equipment rentals because they are uncertain about what their future needs may be, and are likely unprepared to invest in an equipment purchase without sufficient certainty.
Other times, equipment renting may have more to do with limited resources. Approximately 58% of people rent equipment because they’ve been hit with an unexpected need, and 50% rent because they have to cover for their own machine that has broken down. Over 34% rent because purchase prices are too high. Rentals can be a job-saver for workers, helping to meet deadlines when the unexpected occurs and when resources are limited. Finally, many renters, roughly 36%, also rent equipment so they can test out a machine before making a purchase.
Understanding the trends in popular reasons to rent is important for workers and dealers alike. Workers with limited current needs, uncertain future needs, and emergency situations can rest assured that equipment rentals are a favored, reliable choice among their industry peers. Additionally, dealers can use reason-to-rent trends to best inform their marketing and outreach efforts. These lessons are even more pronounced when considering just how much the rental business is booming. Speaking of which…
In 2017, a whopping 77% of construction survey respondents report that, compared to last year, they are maintaining or increasing their equipment rental usage. Only 23% are decreasing how much they use rented machinery. Clearly equipment rentals are growing. In fact, rental companies are currently buying half of all equipment sold in the U.S. and, according to the American Rental Association, the rental industry is expected to reach almost $60 billion by 2020!
The explosive growth of rentals has led many to believe that the U.S. equipment market may soon resemble that in the U.K., where 80% of all equipment is rented, often along with the operator. Traditionally, in the U.S., the rental market has peaked during times of national economic decline, as renters are operating under greater uncertainty and less likely to make a purchase. Now, however, rentals continue to expand, even as the economy recovers, indicating that rental growth is a strong and stable trend that is here to stay. This makes today an ideal opportunity for workers and dealers alike to participating in equipment rentals!
Why do you rent equipment? Has your use of equipment rentals increased? Let us know in the comments below!