The power of rental: The advantages of buying from one supplier
25 March 2008
Cat Rental stores are increasingly realising the profits that can be made when they can provide a Cat excavator carrying a Cat hammer to their rental customers. Scott Graham, senior projects engineer at Cat Impact Products said: “Take the typical example of an H70 hammer on a midsized backhoe in a rental store. The acquisition cost of the hammer represents 12% but the hammer generates 40% of the rental income. Feedback from across Europe and the US con. rms that Cat hammers are the product with the best return on investment in the whole fleet.”
With a low capital cost and these high rates of return, they are undoubtedly attractive pieces of equipment for rental operations. In Cat's case, the company has developed solid 'Check-In, Check-Out' procedures for rental hammers to ensure that they are correctly maintained and customer abuse is minimised, But it is important that the relevant and appropriate financial reporting procedures are also put in place, ensuring maintenance costs and rental incomes are correctly allocated, allowing accurate utilisation and rental income to be recorded.