The nvisin tool built around this: Rental Manager.
How it is calculated
There are two common ways to measure it, and they answer different questions:
- Unit (snapshot) utilization = units on rent today / units in the fleet × 100. Quick, and good for "do we have anything to send out this week?"
- Time utilization = days on rent in the period / (units × days in the period) × 100. Slower to work out, but it counts a unit that went out on the 20th as partly used, not fully used or idle.
Count units that are booked but not delivered yet as available, and units in the shop for repairs as part of the fleet. Leaving broken units out makes utilization look better than it is.
How it is used
Utilization is the first number to check before buying more units. If one type sits above 85–90% for months, customers are probably being turned away. If it sits below 60%, money is tied up in units that earn nothing, and selling a few or moving them to a busier type may make sense. Look at it by type, not just for the whole fleet: a yard can be at 80% overall with its big units sold out and its small ones gathering dust. The free rental utilization calculator works it out by type against a target.
Worked example
| Type | Units | On rent | Utilization |
|---|---|---|---|
| Towable generators | 12 | 11 | 91.7% |
| Light towers | 10 | 5 | 50.0% |
| Scissor lifts | 8 | 6 | 75.0% |
| Fleet | 30 | 22 | 73.3% |
The fleet figure looks healthy. By type, generators are nearly sold out and half the light towers are idle, which is a different decision for each.
Common mistakes
- Only measuring the whole fleet. The average hides the types that are short and the ones that are idle.
- Leaving out units in repair. They still cost money, so they belong in the count.
- Chasing 100%. A fleet that is always fully out turns away the next good customer. Most operators aim a little below full.
- Ignoring the rate. High utilization at a low rate can earn less than lower utilization at the right rate. See dollar utilization.
Related terms
- Dollar utilization: Dollar utilization is a rental fleet's rental revenue for a year divided by what the fleet cost to buy, as a percentage.
- Off-rent (off-hire): Off-rent, called off-hire in the UK, Australia and parts of Canada, is the point at which a customer tells the rental company they're finished with a unit and the rent stops.
- Rental billing cycle: A rental billing cycle is the period a rental is charged for at a time, such as a day, a week, a 28-day period or a calendar month, and the date each charge falls due.
Further reading
- Rental Manager: the nvisin tool built around this