ORLANDO, Fla. — Equipment rentals for the primary purpose of re-renting are a key component to successful development of an equipment dealership.
Rent-to-rent must be one of the four core tenets of designing and developing a modern dealership, Larry Kaye, chief executive of equipment consulting firm Script International and former board member of the American Rental Association, said during a presentation today at AED Summit 2025.
“We got parts, sales, service and rental,” he said. “It should not be a subset of the sales department, but that’s where it is most of the time because as a dealership, whether you own the stock in your company or not, you’re the stakeholder.”
In rent-to-rent, dealers typically have a fleet sales turnaround time of one to three years, at 59% of sales, while only 4% of sales happen in a year or less and 37% happen in more than four years, according to AED’s 2024 Cost of Business Survey data presented by Kaye. Meanwhile, in rent-to-sell, which maintains a tighter timeframe, 27% of the dealers were able to turn that fleet in less than six months, with 34% of them taking seven to 12 months and 39% reporting more than 12 months, according to the survey.
As dealers like Alta Equipment Group face declining sales and near-flat rental revenue, longer turnaround times on equipment add to the problem. Reduced ownership headaches, elevated interest rates and uncertainty around the 2024 presidential election contributed to stronger performance on the longer-term rental side compared to the sales side, Kaye said.
Seizing the opportunity
For dealers looking to take advantage of the benefits of long-term rental or rent-to-rent rental, finding a small number of sustainable customers creates the most stable base, Kaye said.
“Find a utility contractor that uses minis [excavators], skids [steers], wheel loaders and excavators, and they typically rent that stuff by the weeks or the month. You’re only going to need four or five of those guys as a steady customer, and you got it,” he said. “I would suggest you have some type of conversation like that, because by you adding a rental fleet, a rent-to-rent fleet, you’re actually getting ready to play the long game. You’re getting into the used equipment business.”
For rent-to-rent to be successful, dealers need everyone to commit to rental as a fourth pillar, along with parts, service and sales, Kaye said.
“Everybody needs to know that they’re all going to benefit from it, but they cannot forsake your investment,” he said. “They need to be connected directly to the utilization of that fleet.”
The third annual Equipment Finance Connect at the JW Marriott Nashville in Nashville, Tenn., on May 14-15, 2025, is the only event that brings together equipment dealers and lenders to share insights, attend discussions on crucial industry topics and network with peers. Learn more about the event and register here.
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