In the construction business, we have to rent equipment. There for a while when the business was so slow, we had gotten out of the habit of having to rent much because we either owned it already, had a friend (in construction) who was out of work and wanted to lease / rent it to us, or we could pick up the equipment cheap because so many other construction companies were going out of business. This last year (from last March until now) however, things have picked up. We have several jobs going on covering about a four state area. It is neither pretty nor fun to make sure everyone has everything they need to build the damn things we build when half of our own equipment is two states away.
We're a very little company. We just happen to do big work, and far away, so now we've been renting more and more equipment.
Used to, when you rented equipment, you paid a damage waiver fee (LDW stands for Loss & Damage Waiver) -- a whopping 14% of the rental fee tacked onto the rental (before taxes) which was an insurance policy. If you didn't rent very often, it was a nusisance but a necessary evil -- if you damaged the equipment, you paid a deductible, and the damage waiver insurance kicked in. You know, hence the name.
But equipment rental companies got wise to this and decided to add a couple of neato little quirks in the mix. Like, if you damage it, sure they'll cover it, but not until you pay a $500 deductible OR two times the monthly rent of the piece of equipment, WHICHEVER IS GREATER. Or the exact cost of the damages. The bastards. This is printed in itty bitty fine print that you don't see on the invoice, but is on the delivery ticket -- the ticket the guys in the field sign. Like they are actually going to read the itty bitty bitty teeny print when they have a backhoe sitting there, ready to go to work? Yeah. Right.
So, for example, the backhoe that one of our overzealous employees damaged last week? (Which I did not mention here yet.) We could pay twice the monthly rent of $1400, so $2,800. Or we could just pay for the estimated damages -- which will be about $1,400. They're not even going to fix it -- it's going right back out on rent. So we paid about $200 for the LDW waiver for the two months we had the backhoe, $400. Now we'll pay for the damage because it's cheaper than the two times the monthly rent... that's $1,800 going whoosh down the drain. I want to smack somebody.
I'm now renting enough to where this is annoying and digging into profits, so now I'm going to have to buy a floating rider policy to cover rental equipment so that I can pay a set amount every month, whether I rent something or not just in case I DO rent something and it gets damaged so I can then have the privilege of only paying the deductible. At least I can quit paying that 14% of LDW on every rental we have -- which, given how much we rent now, is probbably about the same price as the policy.
I am having a party over here, I am having so much fun.
Posted by toni at March 1, 2004 07:33 PM