Rental Fleet Internal Charges – What’s Fair?-Presentation

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Pdf Summary

The document titled "Rental Fleet Internal Charges - What's Fair?" presented by Script International LLC discusses the various internal charges that occur within an equipment dealership and how they impact the profitability of the rental business. The document also explores how these charges relate to the monthly rental revenues.<br /><br />The key areas of expense discussed in the document include acquisition cost, depreciation, interest, parts and service, damages, and make ready. The document highlights the different stages in the lifecycle of a rental fleet, such as acquisition, fleet management, and disposal, and explains the associated costs at each stage.<br /><br />The document presents survey results showing the gross profit margin (GPM) of rental and retail departments. It discusses the impact of acquisition costs on the financial utilization of the fleet and warns against padding these costs.<br /><br />The document also discusses the choices and consequences of depreciation, including revenue-based or time-based approaches and the impact on net book value. It provides examples of fleet depreciation and its percentage of revenue based on different financial utilizations.<br /><br />Interest expenses and costs of capital are discussed next, along with examples that demonstrate how various debt levels and interest rates affect the overall expenses.<br /><br />The document delves into parts and service expenses, including parts pricing and department markup. It also discusses labor costs and the internal discount applied.<br /><br />The section on damages explains how rental damages can be offset through loss and damage waiver income and direct billing to the customer.<br /><br />Finally, the document briefly mentions the gross profit margin on used rental units and mentions upcoming events, including webinars and a live presentation on rental fleet profitability.<br /><br />Overall, the document provides insights into the internal charges associated with rental fleets and the factors that impact their profitability.

Keywords

Rental Fleet Internal Charges

Profitability

Acquisition cost

Depreciation

Interest

Parts and service

Damages

Make ready

Gross profit margin

Financial utilization