The rental equipment industry is expected to continue growing in 2016, with the American Rental Association forecasting revenue growth of 6.7% in the next two years. Renting offers contractors flexibility and access to project specific-equipment, so it’s little wonder that demand for rentals remains strong.
However, in addition to rental activity itself, an important source of revenue for rental houses comes from the sale of used equipment. Used equipment values are heavily dependent on age and utilization, so understanding trends in those areas helps rent-to-sell companies know what to expect as they prepare to offload used inventory.
Over a two-year period, over 550,000 unique equipment listings were collected and analyzed for this very purpose. Although equipment manufacturers and dealers often provide rental services, assets sold through these channels were not included. The results reflect only companies with a primary business model of equipment rentals. Top equipment sellers in this category include United Rentals, Hertz Equipment Rental, Sunbelt Rentals, and BlueLine Rental (formerly Volvo Rents).
Five of the most commonly sold types of equipment were chosen for an in-depth look at price, age, and utilization trending. Together, these types represent 56.7% of the assets listed for sale by rental companies from January 2014 through January 2016:
- Electric Self Propelled Scissor Lifts
- Telescoping Boom Rough Terrain Lift Trucks
- Portable Light Towers
- Large Generator Sets
- Welders
While other types of lifts were also wildly popular, they generally exhibited the same trends as Electric Self Propelled Scissor Lifts; including welders and generators provides a look into other areas of the industry. In order to compare prices for multiple equipment types, prices were indexed according to their values as of January 2014.
Overall, prices for less expensive equipment showed the greatest degree of variability, which is to be expected given the relative volume. An influx of newer models into the resale market pushed average unit age down for generators, light towers, and welders, which corresponds with higher prices for each of those equipment types. Prices for used portable light towers have taken a hit in recent months but are about 8% above the level seen in January 2014.
