1. The break-even day rate
Every price list starts with one figure: what a day of this unit costs you to own and run.
Add up the annual cost of the unit:
- Depreciation — purchase price minus realistic resale value, divided by the years you will keep it.
- Finance, if it is on credit or lease.
- Insurance for the unit, apportioned from your policy.
- Statutory costs — road tax, inspections, testing, whatever applies to that class of kit in your country.
- Servicing and consumables — annual service, tyres, straps, filters, a realistic repairs allowance.
- Storage — the share of your yard or unit it occupies. Free-feeling costs are still costs.
Then divide by the days it is actually rented, which for most small fleets is 80–150 a year, not 300. That denominator is where owners go wrong: a unit that earns on 110 days a year has to carry twelve months of cost on those 110 days.
Add your overheads (premises, phone, admin, insurance for the business rather than the unit) and your target margin, and you have a floor. Anything below it is a rental you are subsidising.
If you do not know your rented-days figure yet, estimate it deliberately low and correct it once you have real data — Fleet Utilisation for Small Rental Businesses shows how to measure it.
2. Sanity checks, not shortcuts
Two rules of thumb are worth knowing, purely as cross-checks.
Percentage of value. A daily rate of roughly 1–2 % of the unit's purchase price is a common shape across general hire — the lower end for durable, low-maintenance kit that gets rented often, the upper end for items with heavy wear, high damage risk or low utilisation. If your calculated rate lands far outside that band, something in your assumptions is wrong: either the utilisation estimate, or the expected life.
Payback period. How many rental days does it take for a unit to repay its purchase price at your day rate? For general hire kit, a payback measured in one to two seasons of realistic utilisation is comfortable; a payback measured in five years means you are buying a hobby.
Both are checks. Neither replaces the cost calculation, because they say nothing about your insurance, your yard or your damage rate.
3. What the market will bear
Costs give you a floor. The market gives you a ceiling, and the gap between them is your decision.
Research it properly rather than by rumour:
- Ring three competitors as a customer and ask for a total price for a specific two-day hire, including deposit and any extras. Note the total, not the headline day rate.
- Note what is included — delivery, straps, a spare wheel, cleaning.
- Note the friction: how fast did they answer, could you book without a phone call, did they hold the slot?
That last point is worth more than it looks. In most local rental markets, availability and responsiveness beat price for a large share of customers. If you answer within the hour and can confirm instantly, you do not need to be the cheapest — and being the cheapest is the least defensible position available to a small fleet, because anyone can copy it.
4. Tapering by length
Handling costs are per rental, not per day. A one-day hire consumes a handover, a return, a clean and paperwork; so does a seven-day hire. Charging the same rate per day for both means the long rental — the profitable one — is overpriced and never happens.
A workable shape:
| Length | Rate per day | Reasoning |
|---|---|---|
| 1 day | 100 % | highest handling cost per earned day |
| 2–3 days | 85–90 % | one handover spread over more days |
| 4–6 days | 75–85 % | unit is not turning around, staff time drops sharply |
| 7+ days | 60–70 % | a week in the calendar is certainty, not just revenue |
| month | 40–50 % | usually a business customer; negotiate individually |
Percentages are the shape, not the prescription. Two rules that matter more than the exact numbers: the taper must be published, so customers can see that a longer hire is cheaper without asking, and the weekly price should be a single advertised figure, because "seven times something minus a discount" is not a price anyone can hold in their head.
5. Minimum length, minimum charge, half days
Three related tools, often confused.
| Tool | What it does | When to use it |
|---|---|---|
| Minimum rental length | refuses bookings shorter than N days | peak periods, or kit with a long turnaround |
| Minimum charge | any hire costs at least X | kit where the handover is the main cost |
| Half-day rate | typically 60–70 % of the day rate | high-turnover local kit where short hires are the business |
For most small fleets, a minimum length in busy periods is the most useful of the three, because it protects the scarce resource, which is your handover capacity rather than the unit itself. A half-day rate is worth having only if you genuinely have someone on site to receive returns midway through the day; otherwise it just creates awkward promises.
6. Deposits are not revenue
Deposits belong on the price list, but not in the price. Two reasons, both practical:
- A customer who learns the deposit amount at the counter, with the wrong card in their pocket, leaves empty-handed and annoyed.
- A deposit that gets treated as income makes your monthly figures meaningless and your refunds painful.
Set deposit levels by the value and risk of the unit rather than by the rental price, publish them next to each unit, and keep them stable through seasonal rate changes. Security Deposits for Equipment Rentals covers how much to hold and how to hold it.
7. Extras customers accept
Extras are not the enemy. The enemy is an extra that appears on the final bill for the first time. Charged openly and listed up front, these are all normal:
- Delivery and collection, by distance band rather than exact kilometres — easier to quote and easier to check.
- Out-of-hours handover, a flat fee, so the person opening up on a Sunday is paid.
- Cleaning, when a unit comes back beyond a defined standard. Define the standard in words a customer can picture.
- Refuelling, at fuel cost plus a stated handling charge.
- Mileage over an included allowance, for vans and cars.
- Engine hours over an included allowance, for machines — see Billing Machine Rentals by Engine Hours.
- Consumables and accessories: straps, spare wheels, protective covers, blades.
- Late return, which needs its own published rate rather than an argument. The full playbook is in When a Customer Returns Rental Equipment Late.
The test for every one of these: could a customer have found out about this charge before they booked? If not, either publish it or drop it.
8. Presenting the price
However good the numbers are, the customer sees a page or hears a sentence. Four rules:
1. Quote totals, not rates. "Three days, Friday to Sunday, including the trailer board — total X, deposit Y." Not "it's Z a day".
2. State whether tax is included, and be consistent. Consumer-facing prices are generally shown tax-inclusive; business-facing lists are often shown exclusive. Mixing them within one price list is the actual mistake.
3. Show what is included as explicitly as what costs extra.
4. One page. If your price list needs two, it needs simplifying, not a second page.
9. When and how to change prices
Review annually, before your season starts, with utilisation figures open. Between reviews, correct only obvious outliers: a unit that is never free is underpriced, a unit that never moves is either overpriced or invisible — check the second possibility before assuming the first.
For changes above roughly 10 %, move on an obvious date — the start of a year, or the start of a season. A price that changes on a published date reads as a policy; the same change made quietly on a Tuesday reads as an error. And never reprice a confirmed booking. Seasonal variation should be handled as published seasons rather than ad-hoc changes: see Seasonal Pricing for a Rental Fleet.
Where Flotello fits
In Flotello, each unit carries its own hourly and daily rate, deposit amount, service fee, optional mileage allowance and seasonal periods, and the price of a booking is calculated from the actual dates — including extras — so the figure quoted, the figure on the agreement and the figure on the invoice are the same figure. You can build your price list during the seven-day trial.