How it's worked out
- Utilization for each type = units on rent / units owned. Fleet utilization adds up every type.
- Monthly rent = units on rent x the monthly rate. Rent lost to idle units = units not on rent x the rate.
- Monthly rent at target utilization assumes each type below the target rises to it, at today's rate. Types already above it stay where they are. The gap to target is the difference.
- Dollar utilization = this month's rent x 12 / (units x purchase cost). See dollar utilization.
- Months to pay back a unit = purchase cost / (monthly rate x utilization - monthly running cost per unit).
Worked example
The sample loaded above is a fictional equipment yard with 43 units and a target of 80% utilization. Highlighted types are below the target.
| Type | Units | On rent | Monthly rate | Utilization | Monthly rent | Dollar utilization | Months to pay back |
|---|---|---|---|---|---|---|---|
| Towable generators | 12 | 10 | $1,150 | 83.3% | $11,500 | 82.1% | 16.2 |
| Light towers | 10 | 5 | $900 | 50.0% | $4,500 | 49.1% | 28.2 |
| Scissor lifts | 8 | 6 | $650 | 75.0% | $3,900 | 46.8% | 28.2 |
| Plate compactors | 10 | 7 | $330 | 70.0% | $2,310 | 115.5% | 11.4 |
| Mini excavators | 3 | 2 | $3,300 | 66.7% | $6,600 | 48.0% | 28.4 |
| Fleet | 43 | 30 | 69.8% | $28,810 | 61.0% |
The fleet is 69.8% on rent and brings in $28,810 a month, or $25,730 after running costs. Getting the light towers, scissor lifts, plate compactors and mini excavators up to 80% at today's rates would add about $4,610 a month. Compactors are cheap to buy and pay back in under a year. Light towers, scissor lifts and mini excavators each take more than two years at today's rates and utilization.
What to do with the results
- A type well above target for months: you're probably turning customers away. Price it up, or buy more.
- A type well below target: check the rate against competitors, market it to a new kind of customer, or sell a few units.
- A long payback: the rate may be too low for what the unit cost, or running costs are eating the rent.
- Rent lost to idle units: the ceiling, not the goal. No fleet is 100% out.
Go further
Frequently asked questions
What is a good utilization rate for rental equipment?
It depends on the equipment and the season, but many rental companies aim for roughly 70–85% of each type on rent. Much higher and you start turning customers away; much lower and money is tied up in units that earn nothing. Set your own target and compare each type against it. See rental utilization rate.
What is dollar utilization?
A year's rental revenue divided by what the fleet cost to buy. It shows how hard each dollar of equipment is working, which unit utilization can't. Here it's this month's rent times 12, so a seasonal month will over- or understate it. See dollar utilization.
How is months to pay back worked out?
Purchase cost divided by what an average unit of that type earns a month after running costs: the monthly rate times the share of units on rent, less the monthly running cost per unit. If that is zero or less, the type never pays back at today's rate and utilization.
My rates are daily or weekly. Can I still use it?
Yes. Enter the average rent a unit brings in over a month when it's out, for example a weekly rate times about 4.3. The results are only as good as that monthly figure.
What should running costs include?
What a unit costs you each month whether it's on rent or not: routine servicing, insurance, storage, licensing and any finance payments you want to count. Leave out delivery costs that the customer pays for separately.
Is my data sent anywhere?
No. The calculator runs in your browser. Nothing you type is uploaded or stored. Download a CSV if you want to keep the figures.