Table of Contents

1. Equipment Rental Accounting Basics
2. Accounting Tips & Strategies for Rental Companies
3. How to Automate Your Equipment Rental Accounting

When you’re running an equipment rental business, you have to make a lot of ongoing financial decisions. These decisions impact every part of your operation – from equipment purchasing and maintenance to staffing, marketing, and long-term planning.

Without consistent accounting practices, it’s easy for important details to slip through the cracks – costing your business time and money.

The tips below are designed to help you stay organized, maintain cash flow visibility, and make smarter decisions about your equipment rentals. We’ll also show how tools like Quipli and QuickBooks Online can automate your financial workflows and give you more control over your bottom line.

Equipment Rental Accounting Basics

Before diving into specific tips, it’s important to understand the fundamentals of equipment rental accounting. Unlike traditional retail businesses, rental companies deal with unique accounting challenges due to the nature of maintaining, renting, and depreciating physical assets.

Classifying Rental Equipment Expenses

Rental equipment isn’t a typical expense – it’s a capital asset. That means the costs associated with acquiring and maintaining it need to be properly categorized.

Here are a few examples of common classifications:

• Capital Expenses: The upfront cost of purchasing rental equipment. These are capitalized and depreciated over time rather than expensed immediately
• Operating Expense: Day-to-day costs tied directly to using or maintaining your fleet – such as fuel, parts, servicing, and repairs
• Overhead Costs: Indirect expenses that support your rental operations — including insurance, software, employee wages, facility costs, and equipment storage

By keeping these categories clear, you’ll not only stay compliant but also gain a clearer view of what’s profitable and what’s not.

Key Financial Metrics for Equipment Rental

Successful rental businesses track specific metrics to measure profitability:

• Utilization Rate: The percentage of time equipment is rented out versus available
• Time Utilization: Rental days ÷ Available days
• Financial Utilization: Actual revenue ÷ Potential revenue if rented continuously
• Return on Investment (ROI): Revenue generated ÷ Equipment cost
• Maintenance Cost Ratio: Maintenance expenses ÷ Rental revenue

Understanding these fundamentals will help you implement the more specific accounting tips that follow.

Accounting Tips & Strategies for Rental Companies

Managing the accounting and finances of an equipment rental business can quickly become complex and time-consuming. But with the right systems and discipline around your financial processes, you can eliminate chaos and gain insights into the fiscal health of your company.

Here are ten smart tips to improve accounting, cash flow, reporting, and more.

1. Use accounting and bookkeeping software to streamline and automate your financial processes.

Solutions like QuickBooks Online are a must for any small to midsize business, including your equipment rental company. Quickbooks’s industry-leading financial software integrates seamlessly with your bank accounts to automatically import and categorize all of your transactions – no more manual data entry.

QuickBooks can also integrate with dedicated rental business management platforms like Quipli, creating a streamlined and largely automated process to keep things running smoothly. This saves a lot of time on accounting and unifies data across platforms.

Software provides tailored features for equipment rentals including invoicing, payment processing, tax calculations, revenue tracking by asset, reporting, and more. This removes grunt work so you can focus on big-picture financial strategy rather than paperwork.

2. Number your invoices sequentially for ease of reference.

Accounting software can automatically assign invoice numbers in order as they are generated. But even if done manually, this simple step can save lots of hassle trying to identify vague invoices by date or customer name later on. Make the number format logical and easy to follow.

3. Create and maintain a comprehensive Vendor Master File that keeps all your accounts payable information in one place.

This can include information like contacts, addresses, tax IDs, payment terms, and purchase histories.

Quipli’s software features a built-in vendor management module, which serves as a centralized database for all supplier profiles and interactions. The master vendor file acts as your AP hub to optimize vendor relationships and transactions. It enables easy reporting on payments, balances due, purchase analyses, and more.

Customers can also be tracked in a centralized Master File for full accounts receivable visibility. Consolidated customer profiles help you readily stay on top of billing, payments, account status, purchase history, and other CRM data.

This optimized customer insight assists collection efforts and nurtures long-term relationships through an understanding of their business.

4. Be sure to send out customer invoices within 48 hours after a rental concludes, while it’s still fresh in the customer’s mind.

Many software options can automatically generate and email invoices upon rental return for instant delivery. Quick invoicing while service details are top of mind helps get your bills paid faster. Customers perceive fast, professional billing as an indicator of your overall service quality.

If an upcoming due invoice remains unpaid, send reminders via email and/or phone at appropriate intervals, e.g. one week before the due, the day before the due, and the day of the due date.

Polite but firm reminders demonstrate you are monitoring accounts diligently while also giving customers an opportunity to remedy before further action is required.

Take a look at our equipment rental receipt and invoice templates if you need help.

5. Review past sales patterns, future projects, and current P&L reports to prepare a quarterly budget projecting income and expenses for the upcoming quarter.

Factor in potential fluctuations from seasonality, inventory changes, staffing needs, etc. that could impact budget vs. actuals. Adjust projections month to month accordingly. Regularly comparing your budget to real-world results highlights issues to address and helps guide smart decision-making.

Curious about equipment trends? Check out our report on construction equipment trends.

6. Be sure to understand sales tax laws, which vary widely by state and often even by city/county within a state.

For example, Los Angeles County has a 9.5% sales tax while San Francisco’s rate is 8.5%. States like California also have complex agricultural exemptions. Non-compliance can lead to audits and stiff penalties, so tax codes must be followed diligently in all regions you operate.

As a small business, you need to pay quarterly estimated income taxes to avoid underpayment fines. Work closely with your accountant and bank to ensure accurate, timely quarterly tax payments.

The IRS and state agencies impose harsh penalties on late filers. Payroll taxes must also be handled punctually each period to avoid fines. Leverage capable payroll software to fully automate tax withholding and payments.

Learn more in our equipment rental tax guide.

7. Develop proper financial reporting for your rental business

Equipment rental companies require specialized financial reports that track asset-specific metrics beyond standard P&L statements. Implement regular reporting that includes:

• Equipment Utilization Reports: Track both time and financial utilization by asset class or individual unit
• Maintenance Cost Analysis: Monitor maintenance expenses as a percentage of revenue by equipment type
• Revenue by Customer Segment: Identify which industries or customer types generate the most profitable business
• Rental Return Analysis: Calculate the ROI of each asset to inform purchase, pricing, or retirement decisions

These specialized reports help rental businesses make informed decisions about fleet expansion, pricing strategies, and when to retire underperforming assets.

8. Understand your depreciation methods and decisions

Selecting the right depreciation method has significant tax implications for equipment rental businesses. Consider:

• Straight-line Depreciation: Simplest method that spreads cost evenly over useful life
• Double Declining Balance: Accelerated method providing larger deductions in early years
• Units of Production: Based on actual usage rather than time (especially relevant for equipment with hour/usage meters)
• MACRS (Modified Accelerated Cost Recovery System): Required for tax purposes in the US

For rental businesses, the Section 179 deduction and bonus depreciation provisions in the tax code can allow for immediate expensing of certain equipment purchases, dramatically improving cash flow in the year of acquisition.

Consult with a tax professional to determine which depreciation strategies align best with your business cash flow needs and tax situation.

9. Navigate the impact of IFRS 16 on rentals

If your business operates internationally or works with larger enterprises, understanding the International Financial Reporting Standard (IFRS) 16 is crucial. This accounting standard significantly changed how leases are recognized, measured, and reported.

Key considerations include:

• Lease Classification: Under IFRS 16, most leases appear on the balance sheet as both assets and liabilities
• Disclosure Requirements: Enhanced disclosures about lease arrangements are required
• Impact on Financial Ratios: Balance sheet changes affect key metrics like debt-to-equity ratios

While smaller rental companies may not directly implement IFRS 16, understanding these standards helps when dealing with larger clients who follow these protocols, particularly when negotiating long-term rental contracts.

10. Don’t forget about including leased equipment

Many rental businesses supplement their owned fleet with leased equipment to meet seasonal demands or test new product lines. This creates additional accounting considerations:

• Asset Classification: Properly distinguish between owned assets and leased assets in your accounting system
• Liability Tracking: Record lease payment obligations as liabilities on your balance sheet
• Sub-Rental Accounting: Track revenue and costs for equipment you’re re-renting to customers
• End-of-Lease Planning: Create accounting provisions for purchase options or return conditions

Carefully accounting for both owned and leased equipment gives you a complete picture of your financial position and helps optimize your fleet mix for maximum profitability.

How to Automate Your Equipment Rental Accounting

Modern rental businesses can dramatically streamline their accounting processes through automation. Here’s how Quipli can transform your equipment rental accounting:

1. Seamless QuickBooks Online Integration

Quipli’s QuickBooks Online integration automatically syncs all rental transactions, including:

• Real-time invoice creation when rentals are completed
• Accurate revenue categorization by equipment type
• Customer payment processing and application
• Vendor bill tracking and payment recording

This bi-directional integration eliminates double-entry and ensures your financial data is always consistent across systems.

2. Automated Financial Reporting

Quipli generates critical financial reports automatically, giving you instant visibility into your rental business performance:

• Daily revenue snapshots by location, equipment category, or individual asset
• Utilization reports that highlight your most profitable equipment
• Accounts receivable aging with automated customer payment reminders
• Return on asset investment calculations that inform purchasing decisions

These automated reports save hours of manual calculation while providing deeper insights into your business performance.

3. Streamlined Tax Management

Managing complex rental taxes becomes simple with Quipli’s automated tax features:

• Built-in tax rate tables that automatically apply the correct rates based on location
• Proper tax classification for rentals versus sales items
• Automatic tax reporting for filing periods
• Digital record-keeping for tax compliance and audit preparation

By automating these accounting processes, your rental business can reduce administrative overhead, improve accuracy, and gain the financial insights needed to make strategic decisions.

Quipli’s QuickBooks Online integration can help you keep your financials running smoothly

With strict accounting discipline in place, rental owners can cut through the chaos, get financial insights, stay compliant and free up time to focus on big priorities. Partnering with capable solutions like Quipli optimizes accounting workflows to run a tighter, more profitable rental operation.

Partner with a specialized platform like Quipli for rental-optimized accounting automation. Quipli integrates with QuickBooks Online to handle invoicing, collections, taxes, and reporting so you can focus on your business.

Reach out today to learn more and request your free demo!

One of the biggest questions that new rental business owners have is, “Do you charge tax on rentals?” 

It’s not always clear what the right move is, and failing to meet tax requirements can have serious consequences and penalties. 

It’s always best to thoroughly research what your company’s tax obligations are.

Table of Contents

• Is There Sales Tax on Rental Equipment?
• Sales Tax and Different Types of Equipment Rentals
• Other Factors that Affect Sales Tax on Equipment
• Cross-Border Considerations
• Sales Tax in Different States
• How to Better Manage Equipment Rental Sales Tax
• Frequently Asked Questions
• Manage Your Equipment Rentals With Quipli

Is There Sales Tax on Rental Equipment?

You might think that there wouldn’t be any applicable sales tax on rental equipment because you aren’t really selling it. However, this generally isn’t the case.

Most rentals are subject to sales tax, just like any other goods or services. Finding out the right amount to collect can be difficult due to state, city, and county tax rates varying.

You’ll need to look up the exact tax regulations for your geographic area, which can vary substantially from place to place. Not only do tax codes vary substantially from state to state, but there may be additional taxes levied by your specific city or county.

While handling sales tax might seem like an additional burden when starting your equipment rental business, the process isn’t all that complicated. With effective software for managing your business, you shouldn’t have any trouble keeping up.

Recommended Resource: The Most Rented & Profitable Construction Equipment in 2025

Sales Tax and Different Types of Equipment Rentals

When you’re considering if there is sales tax on rental equipment, you need to take a look at exactly what it is that you’re renting out.

Different categories can have different requirements and exemptions, and knowing ahead of time will save you a lot of trouble in the long run. Vehicles are one of the most prominent categories that have major differences.

Vehicles and other types of heavy-duty machinery can often fall under other tax schemes. In many states, they face specific taxes called excise taxes.

This tax can be on top of or in place of regular state, city, and county sales taxes. In general, vehicle rentals will have multiple taxes applied that will be very specific to individual jurisdictions.

Excise Tax & Equipment Rentals

Several states — including but not limited to Indiana, Michigan, and Washington — have additional excise taxes on heavy equipment rentals. An excise tax is an additional tax, imposed on certain kinds of goods, services, or activities — in this case, on equipment rentals.

A good example of an excise tax we all encounter every day is the federal gas tax.

Like a sales tax, an additional excise tax on equipment rentals will impact the final amount that you’ll need to charge each customer that rents from you. Excise taxes can be imposed at any of the following times, depending on state and context:

• Sale or use after something is imported from another country
• Sale or use by the manufacturer
• Sale or use by a retailer
• Sale or use by a customer

This tax can be on top of or in place of regular state, city, and county sales taxes. In general, vehicle rentals will have multiple taxes applied that will be very specific to individual jurisdictions.

Other Factors that Affect Sales Tax on Equipment

Beyond just the type of equipment you’re renting, there are several other important factors that can impact how sales tax applies to your rental business:

Rental Duration

Many states have different tax treatments based on how long the equipment is rented:

• Short-term rentals (typically less than 28-30 days) are often taxed at higher rates
• Long-term rentals may qualify for different tax treatments or even be considered leases for tax purposes
• Some states consider rentals exceeding certain durations (often 3+ years) to be sales transactions

For example, in Texas, short-term vehicle rentals (1-30 days) are taxed at 10%, while longer-term rentals (31-180 days) are taxed at 6.5%.

Business vs. Personal Use

The purpose of the rental can affect tax treatment:

• Some states offer exemptions for business-to-business rentals
• Agriculture and certain industries may have special exemptions
• Government entities often have tax-exempt status
• Nonprofit organizations may qualify for exemptions in some jurisdictions

It’s important to collect and maintain proper exemption certificates when not charging tax to exempt customers.

Damage Waivers and Insurance

Additional services and fees associated with rentals may be taxed differently:

• Damage waivers may be considered taxable in some states but exempt in others
• Optional insurance may have different tax treatment than the base rental
• Environmental fees, cleaning fees, and other surcharges each have their own tax considerations

Cross-Border Considerations

If your rental business operates near state borders or you allow customers to take equipment to other states:

• You may need to register for sales tax in multiple states
• The location where the customer takes possession of equipment often determines which tax rates apply
• Some states have special rules for equipment that crosses state lines during the rental period

Properly tracking the location of use can help ensure compliance with multi-state tax obligations.

Sales Tax in Different States

Of course, anything to do with taxes for your rental business is going to be affected by what state you’re in. Here’s a quick rundown of a few states with prominent differences or exceptions when it comes to sales taxes on equipment rentals.

If you’re not sure about your own state, it’s a good idea to consult with an accountant, attorney, or another professional with expertise in local tax code.

California

In California, there is a sales tax on essentially every type of tangible property rental. There are also taxes applied specifically to motor vehicle rentals.

Along with sales tax, California also imposes a “use tax,” in some cases in which taxable items are purchased for use, storage, or consumption, but not for direct sale. This can sometimes apply if you purchase equipment out-of-state from an out-of-state vendor.

• Leases are taxed based on rental receipts or payments
• Use tax can apply if you remove a unit from your fleet for personal use (versus rental by a customer)
• Some districts may have their own additional taxes, with total sales tax exceeding the typical 7.5%. Check your local city or county tax code, or consult with an accountant in your area, to find out if this applies to your business.

Washington

In Washington, there is both the regular sales tax and the Business and Occupation tax to consider.

The Business and Occupation Tax is measured based on the total value of the products, gross proceeds of sale, or gross income of a business.

There are no exemptions available for the B&O tax for labor, materials, or other costs of doing business. However, there are several tax credits that are subtracted from the B&O tax on your business’s tax return:

• Rural County B&O Credit for New Employees
• High Technology B&O Credit
• Small Business B&O Tax Credit
• Multiple Activities Tax Credit
• Credit for Hiring Unemployed Veterans

Washington’s B&O tax is paid on your excise tax returns.

The specifics here can vary with tax classification, which depends on your type of business and what activities it engages in.

You can check out the tax classification details for rental businesses in Washington here.

Texas

Texas has a motor vehicle rental tax, which is applied to equipment rentals of heavy construction machinery and other types of vehicles, as well as to passenger car rentals.

Texas tax law handles motor vehicle rentals a bit differently than straightforward sales. They’re exempt from the general sales tax, but have another tax with different rates applying depending on the duration of the rental.

When you rent a vehicle to a consumer in Texas — including heavy construction equipment — you must also collect the motor vehicle rental tax from the customer, as part of their total payment. (In a very few cases, the customer may have some form of exemption, but this is relatively rare.)

This additional tax is calculated based on gross rental receipts — this means the total amount charged to the customer for the rental. So it functions similarly to a typical sales tax.

Texas has two different motor vehicle tax rates for rentals, depending on duration:

• Short-term contracts of 1 to 30 days: 10%
• Longer term rentals of 31 to 180 days: 6.5%

Individual cities and counties are also able to impose additional local taxes on short-term motor vehicle rentals — if this is the case in your jurisdiction, you’ll need to include that as well when invoicing customers. You may want to check your local city or county tax code, or consult with an accountant.

Both state and city/county motor vehicle rental taxes must be itemized in invoices and clearly delineated from the rest of the cost. So you’ll need to include a separate line item in each invoice to account for it.

Colorado

Colorado takes a different approach, considering the equipment rental business to be the end-user of the equipment.

As such, there is no requirement for sales tax on rentals, except when the rental exceeds three years and the person renting is considered to be the end-user. There are applicable taxes on motor vehicle rentals, though.

New York

In New York, there are some considerations when taking a look at rental taxes. While a sales tax is applied to rentals, this doesn’t apply to rentals where an operator accompanies the equipment. In that case, it’s treated not as a sale or rental, but as a service performed.

With that said, per New York State tax law, any purchase, rental, lease, or license to use construction equipment and motor vehicles by a contractor, is subject to both sales tax and use tax. It is the contractor renting from you who is liable for these taxes — that is, you’ll need to include them in your invoices when you bill your customers.

New York also has specific taxes that apply to motor vehicle rentals, including requirements for paying in advance for extended rentals.

Florida

Florida applies its 6% state sales tax to equipment rentals, plus any applicable local option taxes imposed by counties. Construction equipment rentals are generally taxable, but certain exemptions exist for:

• Agricultural equipment under specific conditions
• Equipment rentals to federal government agencies
• Equipment rentals to 501(c)(3) organizations with valid exemption certificates

Florida also has a unique Commercial Rental Tax that applies to the rental of commercial real property, which can sometimes impact equipment rental businesses that also rent out space.

Illinois

Illinois imposes its 6.25% state sales tax on equipment rentals. Additionally, local jurisdictions can add their own taxes, bringing the total rate much higher in some areas.

One unique aspect of Illinois’ rental tax system is that if you provide an operator with the equipment, the transaction may be classified as a service rather than a rental, which can affect the tax treatment.

Illinois also offers exemptions for manufacturing equipment in certain situations, making it important to understand the specific purpose for which your customer is renting the equipment.

In the end, the responsibility is on business owners to find out whether you pay sales tax on leased equipment in your state. With strict reporting requirements, you can’t afford to leave this up to chance.

How to Better Manage Equipment Rental Sales Tax

Managing sales tax calculations for your equipment rental business can quickly become complex. Rates vary by location, equipment type, rental duration, and customer type. Manually calculating these variables introduces risk of errors that could lead to underpayment (with penalties) or overpayment (eating into your margins).

Automated Tax Calculation

Quipli’s equipment rental software takes the guesswork out of sales tax management with automated calculations based on:

• Your business location(s)
• Customer location
• Equipment type
• Tax exemption status

Quipli integrates directly with TaxJar, the industry-leading tax calculation service, to automatically calculate and apply the correct sales tax rates for every transaction. This integration ensures you’re always charging the most current and accurate rates without having to manually research tax codes.

The system automatically applies the correct tax rates to each rental transaction, ensuring you charge customers accurately every time. When tax regulations change, Quipli updates the rates automatically so you stay compliant without having to constantly monitor tax code changes.

Real-Time Tax Rate Updates

Tax rates aren’t static – they change regularly as jurisdictions update their tax codes. Through our TaxJar integration, Quipli provides real-time tax rate updates, so you’re always charging the most current rates without manual intervention.

This integration is particularly valuable for businesses operating in multiple jurisdictions or those with customers who take equipment across tax boundaries. TaxJar constantly monitors tax code changes across over 14,000 tax jurisdictions in the United States, ensuring your rental business remains compliant without you having to track these changes manually.

Streamlined Reporting

Come tax filing time, Quipli makes reporting simple with:

• Detailed tax reports by jurisdiction
• Export capabilities for your accountant
• Integration with QuickBooks for seamless financial management
• Audit-ready documentation of all transactions

This means less administrative time spent on tax compliance and more time focused on growing your rental business.

Frequently Asked Questions

Is equipment rental tax deductible?

For businesses renting equipment, rental expenses (including taxes paid) are generally deductible as ordinary business expenses. However, there are some important considerations:

• The equipment must be used for business purposes
• Proper documentation of the rental and tax paid must be maintained
• Different rules may apply for rentals that extend beyond one tax year
• Personal use of rental equipment is typically not deductible

Always consult with a qualified tax professional regarding deductions for your specific situation.

Can a POS system automate this for me?

Yes, a modern equipment rental POS system like Quipli can automate sales tax calculations. The best systems will:

• Apply correct tax rates based on location and equipment type
• Handle tax exemptions for qualified customers
• Keep tax rates updated as they change
• Generate reports for tax filing
• Integrate with accounting software

Without a specialized system, you’ll likely need to manually research, calculate, and update tax rates – a time-consuming process prone to errors.

Are delivery, pickup, or setup fees taxable when included in an equipment rental?

The taxability of ancillary charges varies by state:

• Some states consider these charges part of the rental and fully taxable
• Others treat these as separate services with different tax treatments
• In some jurisdictions, the taxability depends on whether these charges are separately stated on the invoice

For example, in California, delivery charges are generally taxable when included in the rental price but may be exempt when separately stated and actually reflecting reasonable delivery costs. Meanwhile, Texas generally considers delivery charges to be taxable regardless of how they’re itemized.

Quipli’s system is configured to handle these state-specific nuances automatically.

Do cross-border rentals require me to register for tax in that other region?

When equipment crosses state lines during a rental, complex tax situations can arise:

• You may need to collect and remit taxes for multiple jurisdictions
• Some states have economic nexus thresholds that determine when you must register
• Interstate commerce rules may impact how and where taxes apply
• Special rules may apply to equipment used temporarily in another state

The general rule is that if you have a significant business presence (physical or economic) in a state, you’ll likely need to register and collect taxes there. However, specific rules vary considerably, and it’s advisable to consult with a tax professional familiar with multi-state taxation.

Other Rental Business Financial Resources

Manage Your Equipment Rentals With Quipli

Quipli provides comprehensive software for managing equipment rental inventory and presenting an attractive website to customers. With Quipli, you can easily manage orders, invoices, rental websites, and inventory without the need for separate tools.

Our tax management features ensure you:

• Charge the correct tax rates every time
• Stay compliant with changing regulations
• Minimize the administrative burden of tax compliance
• Have accurate records for reporting and audits

To see Quipli, the #1 rated equipment rental platform in action, request your free personalized demo.

Skid steers are among the most versatile and in-demand pieces of equipment in any rental fleet. Their compact design, maneuverability, and compatibility with numerous attachments make them essential for construction, landscaping, agriculture, and demolition projects.

For equipment rental businesses, choosing the right skid steer brands and models is critical for maximizing fleet utilization, customer satisfaction, and return on investment. With numerous manufacturers, specifications, and price points, making an informed decision requires understanding both the equipment and your specific rental market needs.

In this comprehensive guide, we’ll analyze the top skid steer brands based on reliability, performance, maintenance requirements, and rental profitability. Our recommendations are based on industry data, rental operator feedback, and long-term ownership costs that directly impact your bottom line.

The Top 5 Skid Steer Brands for Equipment Rental

When selecting skid steers for your rental business, reliability, parts availability, ease of maintenance, and customer demand should be your primary considerations. These top five manufacturers consistently deliver on these criteria while offering features that renters value.

Bobcat

Market Position: Bobcat dominates the skid steer market with approximately 40% market share, making it the most recognized brand among contractors and DIY renters alike. This brand recognition translates to higher rental demand and utilization rates.

Company Background: Originally Melroe Manufacturing, Bobcat pioneered the first true skid steer loader in the 1960s and has maintained its leadership position through continuous innovation.

Key Models for Rental Businesses:

• S70 (Compact): Ideal for tight-space applications with a 23.5 HP engine and 760 lb rated operating capacity. This entry-level model is perfect for homeowner rentals and light-duty applications.
• S650 (Mid-Size): The workhorse of many rental fleets with a 2,690 lb operating capacity and 74 HP engine. Its versatility makes it the most frequently requested size for general construction applications.
• S850 (Large): With a 3,950 lb operating capacity and 100 HP engine, this larger model meets the needs of heavy construction contractors and commands premium rental rates.

Rental Business Advantages:

• Highest customer recognition and demand
• Extensive dealer network for parts and service
• User-friendly controls that require minimal training for renters
• Advanced features like touch displays, best-in-class lift capacity, and strong hydraulics systems

Maintenance Considerations: Bobcat machines typically require service after every 50 hours of operation, with major maintenance recommended at 500-hour intervals. The newer M-Series features improved serviceability with easier access to routine maintenance points.

ROI Factors: While Bobcat machines command a higher initial investment (typically 10-15% above industry average), they deliver superior rental utilization rates and stronger resale values, making them an excellent long-term investment for rental operators.

Caterpillar

Market Position: Caterpillar holds approximately 18-20% of the skid steer market, leveraging its reputation as the premium brand in heavy construction equipment to establish a strong presence in the skid steer segment.

Company Background: Caterpillar entered the skid steer market in 1999, bringing its century of construction equipment expertise to this growing product category. Despite being a relative latecomer, Cat has quickly established itself as a premium option.

Key Models for Rental Businesses:

• 226D3 (Compact): With 67.1 HP and 1,550 lb rated operating capacity, this entry-level model provides excellent maneuverability while maintaining the Cat reputation for durability.
• 262D3 (Mid-Size): Offering 74.3 HP and 2,700 lb operating capacity, this versatile model is ideal for diverse rental applications from landscaping to construction.
• 272D3 (Large): The flagship model with 98 HP and 3,700 lb operating capacity, designed for heavy-duty applications and capable of running virtually any attachment.

Rental Business Advantages:

• Superior hydraulic performance and industry-leading lifting capacity
• Electric throttle control and high-flow hydraulic options
• Excellent visibility and operator comfort reducing fatigue
• Exceptional ground clearance for varied job site conditions
• Parts commonality with other Cat equipment potentially in your fleet

Maintenance Considerations: Caterpillar equipment features easy service access with rear-tilting cabs and grouped service points. The D3 series machines require 500-hour service intervals with daily fluid checks, reducing downtime compared to some competitors.

ROI Factors: Caterpillar skid steers command the highest initial investment among competitors (15-20% premium), but offer strong residual values, typically retaining 60-65% of their value after three years. Their premium position also allows for higher rental rates in most markets.

CASE

Market Position: CASE holds approximately 15% of the skid steer market, positioning itself as a value-oriented alternative to premium brands while maintaining professional-grade build quality.

Company Background: CASE has been producing skid steers since 1969, giving them over five decades of experience. The company merged with New Holland in 1999, creating CNH Industrial, but maintained separate brand identities and distribution networks.

Key Models for Rental Businesses:

• SR160 (Compact): With 60 HP and 1,600 lb operating capacity, this model offers an excellent entry point for rental fleets needing a reliable compact option.
• SV280B (Mid-Size): This 74 HP machine with 2,800 lb operating capacity features vertical lift design, making it ideal for loading applications in construction and landscaping.
• SV340B (Large): The largest model with 90 HP and 3,400 lb operating capacity, designed for heavy material handling and attachment-intensive applications.

Rental Business Advantages:

• Competitive acquisition cost (typically 5-10% less than Bobcat and Cat)
• Superior visibility with low threshold and skylight
• Industry-leading breakout force
• Simple, intuitive controls that reduce customer training time
• Good parts availability through CNH dealer network

Maintenance Considerations: CASE skid steers feature tilt-up cabs for maintenance access and grouped service points. The B-Series models offer extended 500-hour service intervals on hydraulic oil and filters, reducing maintenance expense and downtime.

ROI Factors: CASE offers a strong value proposition with lower initial costs than premium brands while maintaining good residual value (typically 50-55% after three years). These machines often achieve rental ROI 2-3 months sooner than premium brands due to the lower acquisition cost.

John Deere

Market Position: John Deere commands approximately 12% of the skid steer market, leveraging its strong reputation in agricultural equipment to serve both farm and construction rental customers.

Company Background: While primarily known for farming equipment, John Deere has been producing construction equipment for decades. Their skid steer line benefits from the company’s extensive experience with hydraulic systems and drivetrain components.

Key Models for Rental Businesses:

• 318G (Compact): With 65 HP and 1,800 lb operating capacity, this versatile machine is ideal for landscape contractors, builders, and agricultural applications.
• 324G (Mid-Size): This 74 HP model with 2,690 lb rated capacity offers excellent power-to-weight ratio and serves as a versatile all-purpose machine for rental fleets.
• 332G (Large): With 100 HP and 3,600 lb operating capacity, this machine excels in heavy material handling and excavation applications where premium performance justifies higher rental rates.

Rental Business Advantages:

• Exceptional hydraulic performance for attachment-intensive applications
• Vertical lift models provide excellent reach at full height
• Cab comfort and visibility reduce operator fatigue
• Strong dealer network with agricultural crossover for rural rental operators
• Compatibility with many of the same attachments used on Deere agricultural equipment

Maintenance Considerations: John Deere skid steers feature swing-out rear doors and tilt-up cooling packages for easy access to maintenance points. The G-Series requires 500-hour service intervals, with convenient grouped service points that reduce maintenance time.

ROI Factors: John Deere skid steers command a price premium (10-15% above average), but offer excellent residual value, typically retaining 55-60% after three years. They particularly excel in mixed-use rental markets where agricultural applications are common.

JCB

Market Position: JCB claims approximately 10% of the global skid steer market, differentiating itself through innovative side-entry design and strong presence in international markets.

Company Background: JCB entered the skid steer market with a revolutionary approach, eliminating the traditional front entry in favor of a side door. This design change addresses safety concerns related to operators having to step over attachments.

Key Models for Rental Businesses:

• 155 (Compact): With 60 HP and 1,550 lb operating capacity, this compact model offers the unique side-entry design in a small package perfect for tight spaces.
• 215 (Mid-Size): This 74 HP machine with 2,100 lb capacity balances power and agility, making it ideal for general-purpose rental applications.
• 3TS-8W (Large): With 74 HP and 3,186 lb capacity, this teleskid model combines skid steer maneuverability with telescopic boom capability, offering rental customers unique functionality.

Rental Business Advantages:

• Side-entry design improves safety and reduces potential liability
• Single-arm PowerBoom provides 270° visibility compared to 165° in conventional designs
• Spacious cabs (up to 46% larger than competitors) improve operator comfort
• Common engine platform across models simplifies maintenance and parts inventory
• Fuel efficiency up to 15% better than conventional models

Maintenance Considerations: JCB’s side-entry design eliminates the need for tilting cabs, with all service points accessible from ground level. This unique approach reduces maintenance time and simplifies routine servicing, potentially saving 25% in service labor costs.

ROI Factors: JCB offers a competitive initial investment (typically 5-7% less than Bobcat), coupled with strong fuel efficiency and lower maintenance costs. Their unique design commands attention in rental yards and can be a differentiator for rental businesses looking to stand out.

Runner-Up Brands Worth Considering

While the top five brands dominate the market, these runner-up manufacturers offer compelling alternatives that might be worth considering for specific rental business needs or regional markets.

Kubota

Market Position: Known primarily for compact tractors, Kubota has been expanding its construction equipment lineup with well-regarded skid steers that emphasize fuel efficiency and operator comfort.

Key Models for Rental:

• SSV65: A 64 HP machine with 1,950 lb operating capacity that competes well in the mid-size segment
• SSV75: Offering 2,300 lb capacity and 74.3 HP, this model features a wider cab for operator comfort

Rental Business Advantages:

• Lower acquisition cost than premium brands (typically 5-10% less)
• Excellent fuel efficiency (up to 15% better than some competitors)
• Growing dealer network with improving parts availability

Why It’s a Runner-Up: While Kubota makes excellent machines, they have a smaller market share and less brand recognition among renters. Parts availability can be more limited in some regions, potentially increasing downtime if repairs are needed.

New Holland

Market Position: Though part of the same parent company as CASE (CNH Industrial), New Holland positions its skid steers distinctly, with a focus on agricultural customers and applications.

Key Models for Rental:

• L325: With 74 HP and 2,500 lb operating capacity, this versatile machine offers super boom vertical lift design for excellent reach
• L334: Featuring 90 HP and 3,400 lb operating capacity for heavy material handling applications

Rental Business Advantages:

• Strong dealer presence in agricultural regions
• Competitive pricing (typically 7-12% below premium brands)
• Super Boom vertical lift design provides excellent reach and dump height
• Good parts availability through CNH dealer network

Why It’s a Runner-Up: New Holland lacks the brand recognition of top-tier manufacturers in construction applications, potentially leading to lower demand in urban rental markets. Their machines are excellent but have more limited market awareness outside agricultural settings.

Gehl

Market Position: As one of the pioneers in the skid steer industry, Gehl maintains a loyal following, particularly among experienced operators and in rural markets.

Key Models for Rental:

• R190: A 69 HP machine with 1,900 lb operating capacity, ideal for all-purpose rental applications
• V420: Their flagship model with 120 HP and 4,200 lb capacity, one of the largest in the industry

Rental Business Advantages:

• Competitive acquisition cost (often 10-15% below premium brands)
• Robust design with reputation for durability
• Simplified mechanical systems reduce complexity and maintenance costs
• V-Series vertical lift models offer excellent reach and lift height

Why It’s a Runner-Up: Gehl’s relatively limited dealer network compared to major brands can make parts availability challenging in some regions. While the machines themselves are reliable, the potential for longer downtime during repairs keeps them from the top tier for rental businesses.

What Is the Best Skid Steer Brand?

Any of the top skid steer brands would be a great choice for your rental business. However, the consensus is that Bobcat makes the best skid steers — as it owns 40% of the total market share. It was the first to introduce skid steers to the market in the 1960s.

Bobcat offers various sizes, including compact models for yard work and larger models for major construction projects. Caterpillar is another reliable name, with a much larger variety of equipment. Both brands are relatively easy to service and experience few breakdowns. However, they are both generally more expensive than other brands.

In the rental industry specifically, Bobcat and Caterpillar dominate because of their strong brand recognition among renters. Many contractors will specifically request these brands by name, which can lead to higher utilization rates for your fleet.

The “best” brand ultimately depends on your rental market, customer base, and business model. Urban rental businesses serving primarily construction contractors may benefit most from Bobcat or Caterpillar’s brand recognition, while rural operations with agricultural customers might find John Deere or New Holland provides better value.

What’s the Best Skid Steer for the Money?

Based on 2025 data and recent industry analysis, JCB continues to offer the best skid steer for the money. The company has maintained its reputation for producing reliable smaller construction machines with excellent value retention. JCB offers the best skid steer for the money. According to the latest EquipmentWatch market report, JCB skid steers retain approximately 58% of their value after three years of ownership, placing them among the industry leaders in this critical metric.

JCB’s side-entry design not only improves safety but has been shown to reduce maintenance costs by approximately 25% compared to traditional designs, according to a 2024 study by the Equipment Management Association. The power offered by JCB skid steers is more than sufficient for most rental applications, plus the controls are modern, and the cabs are roomier than most competitors.

CASE also deserves consideration in the value category, with acquisition costs typically 5-10% below premium brands while maintaining comparable performance specifications. Their B-Series machines offer industry-leading breakout force and simplified maintenance access that can reduce operating costs over time.

So who makes the best skid steer? Bobcat and Caterpillar skid steers are both known for holding their value very well. Overall, the best skid steer to buy will come down to those that fit your major needs, such as lift capacity and reliability.

How to Choose the Right Skid Steers for Your Rental Business

Below are eight key criteria to consider when looking for the best skid steer brand.

Lift Capacity

Lift capacity is how much the skid steer can lift. Skid steers will have one of two lift arm styles: radial and vertical lifts. Vertical lifts are for up-and-down movement versus reach. This option is best for moving heavy pallets or dumping material into trucks.

Radial lifts are good for backfilling and putting materials on flatbed trucks. The bucket can be lifted in an arc, allowing for better range.

For rental businesses, it’s often advisable to maintain a mix of both lift styles in your fleet:

• Vertical lift models typically command higher rental rates and are preferred for loading and material handling
• Radial lift models excel in ground-engaging applications and often cost less to acquire

Reliability

How reliable the equipment is should also be a major factor. You don’t want to spend hundreds of dollars on repairs each month. Instead, it’s better to invest in a high-quality piece of equipment. Additionally, a good maintenance plan will boost the useful life of any skid steer.

Rental businesses should consider:

• Dealer reputation for service and parts availability
• Availability of extended warranty options
• Simplicity of design (fewer electronic components often means fewer potential failure points)
• Brand track record for specific models (some manufacturers have certain models that consistently outperform others)

Available Attachments

The attachments available for the skid steer are also important. A variety of attachments will increase the skid steer’s versatility and make it more marketable for rentals. You should consider the following attachments:

• Pallet forks
• Backhoes
• Brush cutters
• Augers
• Grapples
• Bale spears
• Buckets
• Blades
• Trenchers

The more attachments a skid steer can use, the more projects it can tackle. Some considerations specific to rental businesses include:

• Hydraulic coupler systems that allow for quick attachment changes
• Rental-friendly designs that minimize potential damage points
• Compatibility with attachments already in your fleet
• Availability of attachments from multiple suppliers to control costs

Suitability for Different Project Scopes

How well does the skid steer work for different projects? For example, you might need a skid steer to fit into tight spaces. In that case, look for a compact model. In contrast, bigger loads will require a larger capacity.

For rental businesses, it’s important to understand your market’s typical applications:

• Urban markets typically demand more compact machines for renovation and landscaping
• Rural markets often need larger machines for agricultural and excavation work
• Construction-focused rental businesses benefit from machines with higher lift capacities
• Machines with enclosed cabs and climate control command higher rental rates in extreme weather regions

Type of Hydraulic System

Skid steers come with one of two hydraulic systems: low-flow or high-flow. The flow of the hydraulic system is how hydraulic fluid is moved through two hoses in the skid steer. Low-flow skid steers move less hydraulic fluid per minute than high-flow.

The higher the flow, the more powerful the skid steer, meaning it can use larger attachments, such as snow blowers and stump grinders.

For rental businesses, high-flow hydraulic systems typically:

• Command 15-25% higher rental rates
• Attract professional contractors as customers
• Support more specialized attachments
• Require higher initial investment

Many rental businesses find that a fleet mix of approximately 30% high-flow and 70% standard-flow machines provides the best balance of specialized capability and broad market appeal.

Engine Type

Engine type comes into play when meeting EPA emission requirements; 75-horsepower diesel engines on non-road equipment must be Tier 4 compliant. These engines, however, require additional maintenance to prevent damage. Consistent maintenance and keeping the fuel filters clean can help the engine stay in good working order.

Rental businesses should consider:

• Tier 4 Final compliance requirements for new equipment
• The complexity of emission systems (DEF requirements, regeneration cycles)
• Training requirements for customers unfamiliar with modern diesel systems
• Availability of manufacturer training for your service staff

Costs

For rental businesses, total cost of ownership includes more than just the initial purchase price:

Acquisition Costs:

• Initial purchase price
• Financing terms and interest rates
• Available manufacturer incentives
• Bundling opportunities for fleet purchases

Operational Costs:

• Fuel consumption
• Routine maintenance expenses
• Parts availability and pricing
• Labor rates for specialized service

Ownership Costs:

• Insurance premiums
• Expected downtime
• Residual value after your typical ownership period
• Warranty coverage

Most rental businesses find that premium brands with higher initial costs often deliver better long-term returns through stronger residual values, higher rental rates, and better utilization. A typical rule of thumb is that a skid steer should pay for itself within 24-30 months of rental service.

Dealer Availability

The proximity and quality of dealer support is particularly critical for rental businesses:

Service Availability:

• Emergency repair response times
• Mobile service capabilities
• Availability of loaner equipment during extended repairs

Parts Inventory:

• Stock levels of common wear items
• Overnight parts availability
• Cross-compatibility with other equipment in your fleet

Training Support:

• Technician certification programs
• Operator training resources for your staff and customers
• Diagnostic equipment and software access

Relationship Factors:

• Dealer financial stability
• Willingness to provide preferred customer status
• History with other rental businesses

The ideal dealer relationship includes priority service scheduling for rental businesses and parts availability guarantees to minimize downtime—two factors that can significantly impact your rental operation’s profitability.

Should You Buy a Used Skid Steer for an Equipment Rental Business?

For rental businesses looking to maximize ROI, the question of new versus used equipment is always relevant. Used skid steers can offer significant upfront savings, but come with important considerations:

Pros of Used Skid Steers:

• Lower Initial Investment: Used skid steers typically cost 40-60% less than new models
• Reduced Depreciation: New equipment experiences the steepest depreciation in the first 2-3 years
• Potentially Faster ROI: Lower acquisition costs can mean quicker break-even points
• Viable Fleet Expansion Strategy: Allows for broader equipment offerings with less capital

Cons of Used Skid Steers:

• Higher Maintenance Costs: Older machines typically require more frequent repairs
• Less Attractive to Renters: Some customers prefer newer equipment with modern features
• Limited Warranty Coverage: Used equipment typically comes with limited or no manufacturer warranty
• Unknown History: Previous abuse or poor maintenance can lead to reliability issues
• Customer Perception: Some rental customers associate used equipment with lower-tier rental operators

Best Practices When Buying Used:

1. Focus on Low-Hour Machines: Look for skid steers with under 2,000 hours for the best balance of value and remaining useful life
2. Stick with Tier 1 Brands: Bobcat, Caterpillar, and other top brands typically hold up better over time
3. Request Maintenance Records: Documented service history indicates a well-maintained machine
4. Consider Dealer-Certified Used Equipment: These often include inspections and limited warranties
5. Factor in Compliance Requirements: Ensure older machines meet current emissions standards for your region
6. Perform Comprehensive Inspections: Check hydraulic systems, undercarriage components, and operational functions thoroughly

The Financial Equation:

For rental businesses, a good rule of thumb is that a used skid steer should cost no more than 60% of a new model’s price if it has 2,000-3,000 hours. For each additional 1,000 hours, deduct approximately 10% from the value.

The sweet spot for many rental operations is acquiring 2-3 year old machines from contractors who typically upgrade at this interval, allowing you to capture significant savings while still offering modern, reliable equipment to your customers.

Many successful rental businesses implement a hybrid approach: premium, low-hour new machines for demanding applications and well-maintained used units for general-purpose work. This strategy maximizes capital efficiency while maintaining a competitive rental offering.

Managing Your Skid Steer Fleet with Rental Software

Acquiring the right skid steers is only half the battle for rental businesses. Effective fleet management is critical for maximizing utilization, tracking maintenance, and optimizing rental rates.

Modern rental management platforms like Quipli help equipment rental businesses:

• Track Utilization and Profitability: Monitor which skid steer models and sizes are performing best in your fleet, including detailed metrics on revenue per asset, time utilization, and maintenance costs to identify your most profitable units.
• Schedule Preventative Maintenance: Set automatic maintenance reminders based on engine hours or calendar intervals, ensuring your skid steers receive timely service to extend their operational life and minimize costly repairs.
• Manage Attachments: Track which attachments are rented with each skid steer to identify complementary rental opportunities and create bundled packages that increase average transaction value.
• Optimize Rental Rates: Analyze seasonal demand patterns to implement dynamic pricing strategies that maximize revenue during peak periods while maintaining competitive rates during slower seasons.
• Streamline Customer Experience: Allow customers to browse available skid steers, view specifications, and book online 24/7, creating a modern rental experience that differentiates your business from competitors.

By combining the right fleet selections with powerful rental management software, your skid steer fleet can become one of your most profitable equipment categories. The data from your rental software can also inform future purchasing decisions, helping you build a fleet that precisely matches your market’s demand patterns.

Ready to Add a Skid Steer to Your Rental Portfolio?

The five skid steer brands above represent the gold standard for equipment rental fleets, with the runner-up options providing viable alternatives for specific scenarios. Regardless of which manufacturer you choose, skid steers remain one of the most versatile and in-demand pieces of equipment in the rental industry.

Making the most out of your rental business is the goal of the Quipli team. We provide an automated system for managing your rental inventory and scheduling, allowing you to focus on strategic fleet decisions rather than administrative tasks.

That’s why we’ve put together an all-in-one equipment rental software, designed to help you grow and manage your business. Reach out today for a demo to see how Quipli can help you optimize your skid steer fleet and maximize your rental ROI.

What is Rental Gridlock? 

The equipment rental industry is changing rapidly. Increased competition and rising customer demands are creating new challenges for even the most well-run independent rental operations, through no fault of their own.

While the big nationals are leveraging sophisticated technology and deep pockets to set new standards for equipment availability and pricing, many independent rental businesses find themselves competing on unsustainable fronts – sacrificing margins on service, relaxing payment terms, and maintaining a higher cost fleet mix just to stay competitive.

At the same time, the fragmented systems and manual processes rental operations have historically relied on simply can’t keep pace with today’s demands. This has caused many independents to find themselves stuck in survival mode.

We call this phenomenon “rental gridlock” – the collection of bottlenecks, inefficiencies, and fragmentation that hold rental businesses back from reaching their full potential.

Picture this: One of your most profitable customers calls to reserve a mini excavator for tomorrow. Your team checks availability and confirms the reservation. Meanwhile, another team member rents that same machine to someone standing at the counter. When your original customer arrives, there’s nothing available – resulting in a frustrated customer and lost revenue.

This scene plays out in rental yards across the country every day, and it’s not because rental operators lack expertise or dedication.

The real culprit is the industry-wide challenge of connecting all the moving parts of a rental operation. As one rental operator told us, “I know we’re busy, but at the end of the month, the numbers don’t reflect how hard we’re working.” That’s rental gridlock in action.

The Four Types of Rental Gridlock

1. Silos Gridlock

“My counter staff tells the customer we have two skid steers available, but then my yard manager tells me both need maintenance. Meanwhile, my delivery driver is bringing back a third one that nobody knew about. It’s maddening.”

Silos Gridlock happens when information gets trapped in disconnected systems, creating blind spots that lead to double-bookings, missed maintenance, and incomplete visibility into your business.

Most rental operations have multiple disconnected systems:

1. A rental management system for contracts and billing
2. Spreadsheets to track maintenance schedules
3. A separate dispatch system for deliveries
4. QuickBooks for accounting

When these systems don’t communicate, your team can’t make informed decisions, customers face unexpected delays, and more equipment sits in your yard when it should be out earning revenue.

2. Operational Gridlock

“It’s Tuesday morning, and we’ve got eight deliveries scheduled. But the delivery schedule is on one system, equipment availability is in another, and two of the machines still need inspections. It took our team over an hour just to sort out what goes where and who’s driving what truck. Meanwhile, customers are calling wondering when their equipment will arrive.”

This is Operational Gridlock – when routine processes like deliveries, pickups, equipment prep, and customer checkouts become unnecessarily complex and time-consuming due to disconnected steps and outdated technology.

For rental operators, this operational gridlock directly impacts your bottom line through:

• Lower equipment utilization (machines sitting idle too long)
• Increased labor costs (more time spent on coordination than value-adding work)
• Reduced customer satisfaction (longer wait times and lower quality of service)

3. Visibility Gridlock

“I asked a simple question last week: ‘Which store location had the highest dollar utilization and revenue last quarter?’ Three days and four spreadsheets later, I still don’t have a clear answer.”

This is Visibility Gridlock – when you can’t quickly answer basic questions about your business performance because critical information is hidden in various systems or not tracked at all.

Without clear visibility, rental businesses make decisions based on gut feeling rather than data:

• Fleet purchase decisions are based on incomplete information
• Rates based on competitor pricing rather than value to the market
• Missed early warning signs of maintenance issues
• Continued investment in underperforming equipment categories

4. Mindset Gridlock

“We’ve always done it this way” might be the most expensive phrase in the rental industry.

This is Mindset Gridlock – when established patterns of thinking prevent rental businesses from adapting to evolving market realities and customer expectations.

When rental businesses cling to outdated approaches, they often:

• Miss opportunities to serve customers who prefer digital interactions
• Waste staff time on manual processes that could be automated
• Lose ground to competitors who adapt more quickly

The Cost of Staying Gridlocked

For equipment rental businesses experiencing gridlock, the business impact is substantial:

1. Lost Revenue From Underutilization
For a rental operation with $1M in fleet value, improving utilization by just 10% can translate to $100,000+ in additional annual revenue.

2. Excessive Labor Costs & Staff Frustration
Manual processes and redundant data entry typically add 15-20 hours of administrative work per week – equivalent to $20,000-$30,000 in annual wages for work that could be automated.

Beyond the financial impact, these tedious tasks drain team morale and lead to burnout. As one rental manager put it: “My best counter person spends half her day doing paperwork instead of helping customers. She’s frustrated.”

3. Missed Rental Opportunities
Double bookings, inaccurate inventory status, and slow responses to inquiries result in lost rental opportunities.

4. Higher Maintenance Costs
A reactive rather than proactive maintenance approach will typically increase overall maintenance costs by +30% while reducing asset lifespan.

How to Know If You’re Gridlocked

Here are 5 clear warning signs of rental gridlock:

1. Double-Booking Incidents
You’ve had multiple instances in the past month where the same equipment was promised to two different customers.

2. Manual Data Transfer
Your staff regularly spends time manually transferring information between systems (e.g., from rental software to accounting systems).

3. Limited Utilization Visibility
You cannot easily generate a report showing utilization rates by equipment category for the past 90 days.

4. Paper-Dependent Processes
Your operation still relies heavily on paper forms and manual filing systems for critical documents.

5. Difficulty Answering Basic Questions
Questions like “What’s our average days on rent for our mini-skids?” or “Which equipment category has the highest ROI?” take hours or days to answer accurately.

Breaking Free: The Rental Velocity Framework

Breaking free from Rental Gridlock starts with smarter processes, better tools, and improved visibility – all working together to create a more efficient rental operation. That’s where the Rental Velocity Framework comes in.

This framework is a structured approach that helps rental businesses overcome gridlock by improving operations, optimizing asset utilization, growing rental revenue and enhancing the renter experience.

It focuses on four key areas that work together to turn your rental operation into high-performing, profitable powerhouse. Here’s how it works:

1. Operational Simplification

Eliminate manual processes and disconnected workflows that slow down your business:

• Reduce time to create rental orders from 15 minutes to under 3 minutes
• Automate equipment availability and maintenance status updates across departments
• Dramatically reduce or eliminate paperwork altogether 
• Free staff to focus on customer service instead of data entry

2. Asset Protection

Maximize the return on your equipment investment:

• Track asset location in real time
• Schedule maintenance based on actual usage
• Document equipment condition digitally
• Identify underperforming assets through detailed reporting

3. Growth Acceleration

Expand your market reach while making it easier for customers to do business with you:

• Enable 24/7 online rental capabilities
• Create a mobile-friendly experience
• Offer self-service tools that reduce phone calls and chasing customers down for payment
• Streamline checkout to eliminate waiting

4. Financial Optimization

Gain the financial visibility needed to make informed decisions:

• See real-time equipment profitability data
• Track maintenance costs vs. revenue by category
• Improve cash flow through streamlined payment processes
• Set data-driven pricing based on market demand

Success Stories: Breaking Free from Rental Gridlock

Arapahoe Rental Transforms Operations Across Nine Locations

“Without a centralized inventory system that connected our locations, managing inventory was a nightmare,” explains General Manager Evan Moore. “We had equipment at one location that customers couldn’t access at another, and there was no visibility across locations.”

After implementing Quipli, everything changed. “Our customers love it now. They can create orders online without surprises or having to call us for pricing. We used to get constant complaints about our website—now it’s consistently positive feedback.”

Today, Arapahoe Rental has “cemented its place as one of the top independent rental companies in the region,” leveraging technology to compete effectively against much larger chains.

Flagstaff Equipment Sees Growth and Efficiency Gains

“Quipli has saved us a lot of time, easily decreasing the time we are on the phone with customers by about half,” reports Rental Manager Kurt Creager. “Our numbers have been going up every month. We’re on an uphill climb, and everything is doing what it needs to do.”

Rental Services of Texas Streamlines Operations

“As far as ease of use, one of our employees is on light duty, and I would say within two days he was running the software by himself. He was answering the phones, doing the rental contracts, and dispatching. That speaks volumes to the workflow that Quipli has created,” says RST Representative Rob Moczygemba.

The Path Forward

The rental industry is changing rapidly. The contrast between companies embracing integration and those stuck in gridlock will only grow more pronounced.

As industry expert Josh Nickell puts it: “The winners won’t necessarily be the biggest players. They’ll be the ones who embrace this shift towards integrated, connected technology. For independent rental operators, this is your moment to build the foundation for long-term success.”

The choice has never been clearer: remain gridlocked and vulnerable, or implement a unified platform like Quipli to transform into a high-velocity rental operation equipped to thrive in an increasingly challenging market.

Ready to break free from rental gridlock? Contact Quipli today for a personalized demo and discover how our platform can transform your rental business.

A seismic shift is reshaping America’s equipment rental industry. 

While rental company managers scramble to hire mechanics and drivers in a brutal labor market, most are still running their operations on disconnected processes from a different era. 

The divide between digitally enabled rental companies and those using legacy systems is widening. Fast. 

National chains are successfully leveraging unified technology to scale operations efficiently, but most independent rental operators remain trapped – caught between disjointed, outdated software and the integrated systems needed to solve modern rental challenges.

And the stakes are rising. 

The market is cooling after years of better-than-expected growth. The American Rental Association projects equipment rental revenue growth will normalize from 8.2% in 2024 to 5.7% in 2025, reaching a total of $82.6 billion.

In this new reality, efficiency isn’t just an advantage – it’s survival.

And yet while 83% of rental operators grapple with critical staffing shortages, 67% still waste precious human resources on tasks that modern technology could handle in seconds.

If you’re trying to manage shifting customer demands, rising equipment costs and understaffing with disconnected systems and manual processes, you’re fighting an increasingly uphill battle.

The future is clear: rental companies must fundamentally change how they do business or risk being left behind. Those that adopt technology and successfully integrate it into their operations will unlock unprecedented resource utilization and market advantages.

In this report, we examine how leading rental operators are navigating this technology inflection point, the impact of true integration on operational performance and the strategic shifts that will define success in tomorrow’s rental industry.

About this report

This report draws on data collected from 50+ US rental operators in Q4 2024, representing companies across multiple US states and fleet sizes. Analysis is enriched with insights from industry experts including Josh Nickell (CEO of Northside Tool Rental and former Vice President, Equipment and Event segment of the American Rental Association), Michael Bauman (Director at TM Capital) and David Felts (Managing Director at TM Capital). Our focus is particularly on independent rental companies operating multiple locations, though findings are relevant to operators of various sizes.

The technology adoption reality 

The rental industry invests in technology at half the rate of comparable sectors. 

The reason? While rental operators can instantly calculate the ROI on a new fleet addition, quantifying returns from software feels far less concrete.

“We’re really good at saying, ‘If I go buy that excavator, I can get a 50% dollar utilization on it,'” Josh Nickell, CEO of Northside Tool Rentals, explains. “But when it comes to efficiency improvements from better contract writing or maintenance processes, we struggle to calculate the return. We’re good at one, but not good at the other.”

The integration challenge

This hesitation has created a stark reality. Our data reveals while most rental companies have adopted basic technology, true integration remains elusive.

Only 16% of rental operators have achieved fully integrated systems. The majority, 67%, operate with partially integrated systems requiring manual data transfer, and half of them still rely on manual methods alongside their digital tools.

The operational impact is severe. 

Seven out of ten rental companies report losing valuable time to inefficient processes, with most managing three to four disconnected systems. With significant understaffing in critical roles like mechanics and drivers, this lost time is more costly than ever before. 

‘Too many rental companies are still making decisions based on gut feeling,’ Nickell observes. ‘They’re looking at their inventory and guesstimating what they need based on intuition and experience.’

For the thousands of rental businesses across the country operating with fewer than five locations, this technology gap creates particular vulnerability. 

While reliance on instinct over data-driven decisions becomes increasingly risky, the national players – United, Sunbelt and Herc Rentals, who account for around 30% of the US rental market – continue to pull ahead.

Investment bank TM Capital estimates that every year, the industry grows enough to create at least one company with revenues that would place them among the top five largest in the market. Integrated digital systems are vital in helping these companies scale operations and strengthen customer relationships across the country.

The operational impact

Without integrated software, independent operators can’t offer the instant visibility over equipment availability or seamless digital transactions that contractors demand.

Instead, they’re left battling missing rentals due to poor visibility across locations, double-booking equipment due to disconnected systems, and spending excessive time on phone calls manually checking availability and reconciling information. 

Each friction point compounds, directly impacting both operational efficiency and customer experience – all stemming from rental businesses trying to run modern operations with a patchwork of disconnected tools. 

While one system handles inventory, another manages maintenance schedules, and yet another processes payments…with staff manually transferring data between them. 

The solution isn’t just adding more technology, it’s ensuring critical business systems work together seamlessly. Ask yourself: do my inventory management, maintenance scheduling, payment processing and customer service tools work cohesively?

This unified digital foundation isn’t optional for independent rental companies. It’s essential to preserve the service advantages that once set them apart – especially as market conditions tighten.

The cost of standing still

After two record-breaking years where demand outstripped supply, reality is biting. 

Nickell predicts the industry is sitting on 5-10% more fleet than it needs, rental rates are under pressure, and the buffer of exceptional growth is fading. 

While infrastructure projects and commercial construction still drive the American Rental Association’s growth forecasts, capturing this opportunity requires operational agility that manual processes simply can’t deliver.

‘Equipment rentals are closely tied to the performance of downstream markets,’ explains Michael Bauman, Director at TM Capital. ‘There’s been very robust activity and capital deployment for many years. What we’ve seen more recently is the rental sector continues to realize growth, albeit at a more moderate pace relative to what were really ultra-high growth, high demand years in 2022 and 2023.’

The gap between high-performing rental companies and those struggling with operational inefficiencies is widening.

When it comes to assessing success, David Felts, Managing Director at TM Capital, says earnings before interest, taxes, depreciation and amortization (EBITDA) margins are the holy grail.

‘When you see EBITDA margins around 30%, that seems like it’s a good operation. When you get above 40%, you’re really starting to see an elite entity that’s separating itself from the rest of the market. Clearly, they have the right product, the right service, the ability to get price on equipment, and obviously very solid demand and great market reputation,’ he says.

These kinds of margins aren’t achieved by equipment quality alone – they’re also built on operational excellence. In this landscape, every disconnected system bleeds money. 

When fleet data lives in separate silos without a centralized inventory system, equipment sits idle in one location while fleet utilization suffers at another from lack of visibility. 

Staff waste hours manually reconciling data between rental management, maintenance scheduling, and accounting platforms. 

Arapahoe Rental, a provider serving North Colorado, found their outdated software couldn’t integrate with their inventory management system which led to double bookings and missed rentals. Each friction point directly impacts customer experience and revenue potential, eating into margins at a time when every percentage point matters.

The shifting service advantage

This operational fragmentation is particularly dangerous because it undermines the very advantage that has historically set independent operators apart. 

As Felts explains, ‘At the end of the day, when you drive down these industrial streets and you see four or five major rental houses all lined up across from each other, ultimately the equipment performs within a fairly tight range, and the pricing is within 20% from cheapest quality to highest quality.’

What truly differentiates winners in this market, he says, is the concept of ‘rental reliability’ – a contractor’s absolute confidence that they can secure equipment when needed, where needed, at competitive prices. 

Felts observes, “Once a contractor firmly believes that if they have equipment needs, they can pick up the phone or go online and get that equipment readily available, in close proximity, and at a very competitive price, then over time, they will ask themselves, why do I own this equipment anymore?’

Over 40% of workers spend at least a quarter of their work week on manual, repetitive tasks – time that could be spent building customer relationships or optimizing fleet deployment. In logistics, which shares many operational parallels with equipment rental, workers report spending over half their time on manual tasks.

And the complexity only intensifies as rental companies attempt to grow. 

Each new location or piece of equipment adds another layer of manual coordination, creating a ceiling on growth potential just as the market demands greater agility. 

Companies relying on disconnected systems face a cascade of strategic disadvantages:

• Revenue leakage from manual processes and poor visibility across locations
• Higher operational costs from duplicate data entry and error correction
• Increased risk of customer churn due to service delays and communication gaps
• Limited ability to scale operations without proportional staff increases
• Reduced ability to make data-driven decisions about fleet investment and market expansion

This capability gap becomes particularly costly as contractors increasingly expect the same seamless experience they get in their personal lives. Every manual touchpoint in the rental process – from checking equipment availability to processing returns – represents a moment where customers might choose a competitor offering a seamless digital experience.

With potential tariffs threatening to drive up equipment costs, fleet oversupply, and a softening home improvement market, this performance gap will only grow. 

Those unable to deliver the reliability and efficiency that modern contractors demand will find themselves increasingly marginalized, regardless of their equipment, quality of customer service or pricing. 

When differentiation matters more than ever, the cost of standing still with disconnected systems may be nothing less than survival itself.

The path forward

The industry stands at a transformation point. One that goes far beyond basic efficiency gains. 

Leading rental companies are strategically adopting equipment rental software, automating processes, and integrating artificial intelligence, not just to streamline operations, but to fundamentally reshape how they compete and create value.

This shift moves rental operators from equipment providers to strategic asset managers using data and automation to optimize fleet deployment, maximize asset returns, and anticipate market demands.

And the impact is indisputable.

Our research shows investing in integrated technology is delivering measurable operational improvements: 57% of companies saw a decrease in missed rentals, while 43% reported increased utilization rates.

A third of companies see reduced overhead costs.

Our research shows 64% of rental houses who invest in integrated technology save time on administrative tasks – hours now spent maintaining and managing fleet, tracking critical data points and finding new ways of monetizing their inventory.

With integrated systems, data flows automatically between each part of your business. 

Imagine if you had real-time fleet visibility across all your locations; you could consider dynamic pricing and utilization. Your data-driven maintenance scheduling would maximize uptime. With detailed customer histories at your fingertips, you’d build better relationships with your customers.

Plus, detailed analytics reports and dashboards would help you track the important numbers daily. You’d have instant access to revenue trends, original equipment cost (OEC) of equipment on rent, dollar utilization metrics and payroll as a percentage of revenue.

Investing in a cohesive technology stack means independent operators can compete in an increasingly challenging market. Rather than trying to match the big players on scale and efficiency, they can leverage data and automation to amplify their traditional strengths – delivering a more responsive, personalized service while operating more efficiently. 

And the opportunity extends far beyond current capabilities. 

Experts suggest rental growth potential is underscored by market penetration rates. TM Capital’s analysis shows US rental penetration at around 60%, compared to 80-85% in the UK and parts of Asia. Companies that solve their operational challenges now position themselves to capture an expanding market.

But remember, success requires more than just selecting the right software. 

It demands a strategic approach to integration, careful attention to process design and a commitment to building data-driven operations. The companies leading the way aren’t simply using more technology; they’re using it smarter, combining it in ways that drive measurable operational improvements and enhanced customer experiences.

2025 Snapshot: What’s Coming Next?

“The rental industry is evolving faster than ever. In my conversations with hundreds of rental operators across the country, I’m seeing a fundamental shift in how successful companies operate.

Looking ahead, three key trends will define success:

First, we’ll see rental profits grow through AI-enabled efficiency. The most successful companies won’t necessarily have the biggest teams – they’ll be the ones using smart automation and AI to do more with less, from 24/7 customer service to automated fraud prevention.

Second, gut feel is giving way to real-time analytics and metrics. The old way of running rentals based on intuition and experience is fading. Tomorrow’s leaders are already using real-time data to drive every decision, from fleet optimization to maintenance scheduling.

Finally, connected systems aren’t just nice to have – they’re essential for growth. The companies pulling ahead aren’t just adopting new technology; they’re making sure every part of their business works together seamlessly.

The winners won’t necessarily be the biggest players. They’ll be the ones who embrace this shift towards integrated, connected technology. For independent rental operators, this is your moment to build the foundation for long-term success.”

– Kyle Clements, CEO of Quipli

The final word

The rental industry’s digital evolution is creating clear winners and losers.

Our research, from over 50+ US rental operators, reveals a stark truth: those who embrace true integration will lead, while those sticking with legacy systems will fade. The numbers tell the story – 57% fewer missed rentals, 43% higher utilization rates, and a 64% time savings on administrative tasks for companies that make integration a priority.

In 2025, technology is a strategic lever.

The market is evolving at lightning speed, growth projections are softening, and labor shortages persist. For independent operators, this combination of pressures could determine survival.

But it also represents opportunity.

This is a rare chance for smaller players to outmaneuver larger competitors by combining their natural strengths -– agility and personalized service – with intelligent, integrated systems.

Quipli is an end-to-end equipment rental software that helps hundreds of rental companies across the US future proof their business. Book a demo today to find out more about how Quipli can help your rental business thrive.

References

1 https://www.internationalrentalnews.com/news/north-american-rental-revenue-growth-to-slow-in-medium-term/8042516.article#:~:text=The%20American%20Rental%20Association%20(ARA,in%202024%20from%20last%20year
2 https://news.ararental.org/equipment-rental-industry-projected-to-experience-softening-growth
3 https://www.smartsheet.com/content-center/product-news/automation/workers-waste-quarter-work-week-manual-repetitive-tasks?srsltid=AfmBOorMd26N8rPTNa6lJ7ZyTlPVm03i9FuBV2nhAgsYnlFVhkkrkbAc
4 https://nshift.com/blog/logistics-teams-spend-50percent-of-time-on-manual-tasks

If you are in the construction equipment rental business, effective rental pricing is a critical component to maximizing both utilization and profitability. Construction equipment is one of the more expensive types of equipment in a rental business due to its high upfront costs. Transparent, easy access to detailed information about your rental costs and policies can help contractors and clients make better decisions.

Understanding Equipment Rental Rates

Equipment rental rates are a crucial aspect of any construction or industrial project. Understanding how these rates are calculated and what factors affect them can help you make informed decisions and optimize your budget. In this section, we will dive into the world of equipment rental rates and explore the key factors that influence them.

Equipment rental rates are typically calculated based on several key elements. The type of equipment, its size, age, and the technology it incorporates all play significant roles. For instance, newer equipment with advanced features may command higher rental rates compared to older models. Additionally, local market conditions, including business taxes, wages, and the costs of supplies or parts, are considered by rental providers when setting their rates.

The rental period and contract length also impact the overall rate. Longer rental periods or extended contracts often result in lower daily rates, providing cost savings for longer-term projects. Furthermore, the location of the project site can influence rental rates. Projects situated in remote areas or far from the rental provider may incur higher transportation costs, which can be reflected in the rental rate.

You likely need staff to ensure that your machinery remains maintained and serviced when it is not on rent. This overhead can also add to your regular costs associated with the asset.

How to Determine Your Rental Costs

There are several factors involved when determining how to calculate construction equipment rental rates.

First, you’ll need to consider the market rental rates for similar machinery in your area. You can do this by checking with other companies located within your region. If they offer construction equipment rental, ask them how much they charge for items that are similar to yours. You may also be able to find their rates online.

If you are the only company offering a piece of construction equipment, you’ll be able to set your own rates.

As you progress, you’ll want to make sure that your rental rates for construction equipment remain competitive but still leave you with a profit after you factor in your operating costs. Typical costs associated with construction equipment include:

• Leasing payments made to the financing company for construction equipment
• Regular costs of maintenance to keep your equipment functional
• Overhead expenses, such as storage or staff
• Insurance expenditures

Once you have an idea of all of the costs that should be allocated to your construction equipment, you’ll be in a better position to determine your rental rates.

There are several other different components associated with determining your rates. These include the product cost and the cost per rental. You’ll also need to determine the number of days required to rent your equipment before you break even.

What Is the Product Cost?

When determining how to calculate construction equipment rental rates, the product cost will be one of the more important pieces of the puzzle. The product cost is the total cost required to purchase a piece of equipment.

For example, if the equipment you purchased costs $1,500, this will be one part of your total product cost. Other costs involve an allocation associated with each piece of equipment that includes maintenance, overhead, and insurance.

For example, if you determine that your yearly maintenance and overhead costs are $250 for this particular piece of equipment, then your total product cost will be $1,750.

What Is the Cost Per Rental?

The cost per rental is equal to the amount that you can expect to charge for the construction equipment each day. If the average market rate for a piece of equipment is $150 in your area, this is the amount that you would set your rental prices to be.

What Is the Number of Rental Days Required to Break Even?

The number of rental days required to break even is simply the product cost divided by the cost per rental. In our example, it will be equal to $1,750 Product Cost / $150 Cost Per Rental = 11.67 Rental Days. Thus, you will need to rent your equipment for 12 days before you break even and begin to accrue a profit.

Factors Affecting Rental Costs

Several factors can affect equipment rental costs, and understanding these can help you better manage your rental rates. Here are some of the primary factors:

• Equipment Type and Size: Different types of equipment, such as heavy machinery or specialized tools, come with varying rental rates. Larger, more complex equipment typically costs more to rent than smaller, simpler tools.
• Equipment Age and Technology: Newer equipment with the latest technology tends to be more expensive to rent. This is due to the higher initial purchase cost and the advanced features that can enhance productivity and efficiency.
• Local Market Conditions: Rental rates can vary significantly depending on the location and local market conditions. In areas with high demand for construction equipment, rates may be higher.
• Business Taxes, Wages, and Supplies or Parts Costs: These operational costs can impact the rental rate. Higher business taxes, wages, and the cost of supplies or parts in a particular area can lead to increased rental rates.
• Rental Period and Contract Length: Longer rental periods or contracts often result in lower daily rental rates. This can be a cost-effective option for long-term projects.
• Location of the Project Site: The distance from the rental provider to the project site can affect the rental rate. Remote locations may incur higher transportation costs, which can be passed on to the renter.

Operating and Labor Costs

In addition to the rental rate, there are other factors associated with setting rental rates that you need to consider:

• Fuel and Fluid Costs: Operating heavy machinery can consume a significant amount of fuel and fluids. These costs can add up quickly, especially for equipment that is used extensively.
• Labor Costs: Hiring an operator or training staff to operate the equipment is another renter cost to factor in. Skilled operators can ensure the equipment is used efficiently and safely, but their wages need to be considered in your pricing.
• Maintenance and Repair Costs: Regular maintenance and repairs are essential to keep the equipment in good working condition and to reduce downtime. These costs should be anticipated and included in your overall pricing.
• Transportation Costs: Transporting the equipment to and from the project site can be a significant expense, especially for large or heavy machinery. Make sure to factor in these costs when setting your rental pricing.

Specialty Equipment Considerations

Specialty equipment, such as power generation equipment or concrete equipment, may require additional considerations when renting. These types of equipment often come with higher rental rates due to their specialized nature and the advanced technology they incorporate. Additionally, operating specialty equipment may require specific training or certifications, which can add to your renter’s overall costs.

Rental providers may also have specific requirements or restrictions for the use of specialty equipment. It’s important to ensure these requirements are clear to renters to ensure compliance and help them avoid any additional fees or penalties. By understanding these considerations, you can make more informed decisions and effectively manage your equipment rental pricing strategy.

Examples of How to Calculate Construction Equipment Rental Rates

Provided below are examples of how to calculate construction equipment rental rates for three of the most popular types of rentals:

Scaffolding

Scaffolding is a type of construction equipment that is typically needed during exterior renovations. For example, if a client is currently repainting a building, they may need scaffolding to support their contractors to stand on and hold their supplies while working on areas above the ground.

To determine how to calculate construction equipment rental rates for scaffolding, search your local market to determine what other companies are charging.

Averages are generally between $15 and $40 per day but will vary according to location, the type of scaffolding required, and its length. If the market costs align with your product costs, the rental rates will be reasonable.

For example, if your product cost is $1,000, and the cost per rental is $40 per day, you will break even on your scaffolding purchase after renting it for 25 days.

Forklift Rental

The second most popular equipment rental is a forklift. A forklift requires a lot of outlay to initially purchase but can be quite lucrative depending on the market demand. Since many construction companies don’t require the use of a forklift daily, they will prefer to rent them to save on costs.

The average initial forklift cost is between $15,000 and $25,000, and the market rental rate will depend on your competitors and the amount you can afford to charge without losing profit. In most markets, a forklift can be rented for between $150 and $400 per day.

Assuming that the forklift you purchased costs $20,000, and the additional costs for overhead relating to it are $2,500, your product cost is $22,500. If you charge $400 for the rental, you will break even after renting the machine for 56.25 days.

Trencher Rental

A trencher is used to dig long, narrow trenches for landscaping purposes. Their initial cost can vary significantly depending on the type of trencher purchased and how it is used. The more expensive models can be over $50,000, while inexpensive versions may be obtained for a little over $2,000.

Assuming you purchase a trencher that costs $30,000, you’ll need to allocate the additional costs that your trencher will incur to arrive at a final product cost. For example, pretend that your allocated costs are $5,000, resulting in a product cost of $35,000.

The average rental rate of a trencher will vary depending on the type of model and the location where you are renting it from. Average rental rates are between $125 and $300 per day. If you choose to rent your trencher for $300 per day, you will break even after $35,000 / $300 = 116.67 days.

Are You in the Construction Equipment Rental Business?

Figuring out how to calculate construction equipment rental rates is just one part of ensuring smooth daily operations for your company. Quipli offers all-in-one software designed to meet your company’s equipment rental management needs. Contact us to learn more about our services and see a free demo today!

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