How are construction equipment rental rates calculated?
To calculate a rental, you would multiply the total cost of a piece of equipment x 5% / month x 13 x 80% to arrive at the estimated annual rental dollars a rental company wants to achieve. By doing this, they would generate a 35% to 40% gross profit, which includes maintenance, insurance and the limited fuel they fund.
What are blue book equipment rates?
The Rental Rate Blue Book is a comprehensive guide to cost recovery for construction equipment. Rates listed in the Rental Rate Blue Book are intended as a guide to determine the amount an equipment owner should charge in order to recover equipment-related ownership and operating costs.
What is a standby rate for equipment?
A stand down rate is an optional clause in a Hire Agreement. It lets parties opt to give the customer a discount on days when the product being rented out will not be used. Another example is if the equipment could only be used in certain conditions, and bad weather meant the customer was not able to use the equipment.
What are equipment rates?
The equipment rates include fuel, oil, lubrication, repairs, maintenance, and insurance. The cost of moving most equipment to the job is included in Section 151 – Mobilization.
What is a labor surcharge?
The labor surcharge compensates the contractor for statutory payroll items stipulated by various governmental agencies. The six items included are worker’s compensation, social security, Medicare, Federal unemployment insurance, State unemployment insurance, and State training taxes.
Should I be paid for being on standby?
Check your employment contract, because it may contain better than minimum rights to pay when on standby. If your employer provides sleeping accommodation for you at or near your work, you must be paid for any time you spend working while using these facilities. You can still be working even if you are asleep.
What is standby cost?
Stand-By Costs means the monies that shall be owed by the Principal to the Contractor in the event that they are delayed, suspended or otherwise hindered from carrying out the Works due to the fault, failure or liability of the Principal as defined variously within the Agreement.
When should you rent construction equipment?
For How Long Will You Need to Use the Equipment? If you need to use the equipment for a short time, renting offers the lowest cost option, especially if you need the machinery for six months or less. Buying equipment for such a short time does not give you a return on your investment, but renting the machinery will.
How do you calculate the initial cost of equipment?
For example, a company purchases of a piece of equipment with a price tag of $20,000. The purchase also involves $1,000 in fees, $700 in shipping and delivery costs, and $3,000 for installation and warranty. The original cost of this piece of equipment would be $20,000 + $1,000 + $700 + $3,000 = $24,700.
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