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What factors make a monthly rental rate increase after a year?

Hector V.asked 0 viewsCosts & Rental QuotesMonthly rentalLong term rentalService frequencyStandard unitAda unit

We have a 12-month rental for a commercial site with 40 workers. The cluster has three standard units and one ADA-compliant unit on level gravel, truck access every Tuesday. The renewal quote came in higher than last year. I see the monthly rental rate went up. What factors make a long-term rental price increase after the first year? Is it fuel, labor, or the contract itself? Do rental companies typically adjust for inflation on multi-year jobs?

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Brad L.Kansas City, MO

The renewal number usually moves because of what's written in your contract, not because anyone looked at your site and decided to charge more. Pull out last year's agreement and look for an escalation clause or a line saying the rate is fixed for the initial term only. Most long term rentals I've signed lock the price for the first 12 months and then roll to whatever the current rate sheet says.

After that, the stuff that actually drives it is the cost of running the route. Fuel, driver wages, chemical and paper, and wear on the units all go into it, and your Tuesday service visit is the biggest piece of a monthly bill since that's a truck and a driver every week.

With 40 workers on four units, ask them to break the quote out per unit and per service. Then you can see if the ADA unit went up more than the standards or if the service line moved. That's also your leverage. A multi-year term or a firm commitment usually gets you a locked rate, and they'd rather keep a steady weekly stop than lose it.

I've had them knock it back down just by asking what changed line by line.

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