Dealers’ Domain

Question: What do you see as the biggest opportunity or challenge to having a rental department in your dealership?

I looked into the rental business as an option for growth. What I found was insurance and repair costs, coupled with the increased manpower needed, made it expensive to operate. There are quite a few rental houses nearby, and they are all cutting prices to get as much business as they can. The way I see it, rental was good at one time, but times have changed and that field has become cutthroat.
— Matthew Borden, owner
Ed & Matt Equipment
Greenville, R.I. 

We don’t rent for two reasons: 1) We stay plenty busy and any more “irons in the fire” would lower our high level of customer service; and 2) The extra cost of insurance is too much for me! 
— Dean Davis
Dogwood Inc.
Carbondale, Ill.

Since I don’t rent equipment, I can give only a very small answer. The biggest opportunity presents itself to the burgeoning world of do-it-yourselfers who need tools for short-term jobs. Also, rather than loaning equipment while repairing it, it makes good business sense to rent it.
The main challenge to rental is upkeep. The equipment has to be perfectly foolproof, easy to start, and not subject to careless abuse. The second deterring factor is insurance cost. Finally, although I have decades of experience teaching people how to start, use, and care for equipment that is not their own, I’d guess that shops with young, impatient clerks would not be able to teach customers sufficiently. Case in point, four-cycle gas in two-cycle engines.
— Flute Snyder
Hudson Mower Doctor
Hudson, Wis.

We do not rent equipment. I do believe the biggest challenge would be the startup cost of having equipment to rent — having the correct equipment and enough units to really compete with true rental companies. Then, there’s the legal side of contracts and liability. The upkeep of equipment could become expensive as well. We just don’t have the manpower and room to offer rental equipment at this time. I don’t feel like, at the present time, it’s something I can invest enough time and money to justify the commitment to offer rental equipment at the same high level as my customers have become accustomed to doing business with us in the sales and service of outdoor power equipment.
— David Vassey
Vassey Lawn & Garden Center
Cleveland, Tenn.

If I had a rental department in my dealership, the challenge I would foresee is the abuse the equipment takes, plus the concern of the equipment not being returned. I can see the opportunity of extra $. Most likely, it would mean more paperwork, keeping up with the rental part, and possibly more employees to deal with. That’s probably why I haven’t tried to rent equipment. But you never know what the future will bring.
— Tony Nation
Nation’s Small Engine, Inc.
Hot Springs, Ark.