Extension Rentals

Formal

Businesses that don’t want to buy equipment outright usually lease or rent. A commitment is made for a ‘primary rental period’ - let’s say this is 36 months - and at the end of this period there are two choices, - return the equipment or continue to use it. Extension rentals are the monthly charge for continuing to use equipment beyond the original rental period, and are usually charged at a lower monthly rate because the equipment is older and the original hirer has already recovered most of their original financial commitment.

Straight Talk

If you are in sales: - An opportunity to charge customers for continued use of a rented asset beyond the original contractual time period. Majority of such rentals are pure profit because the bulk of the original equipment cost is recovered through the initial period. If you are a buyer: - Scandalous exploitation of customers by rental companies who charge for the continued use of an asset where the bulk of the cost of an asset has already been repaid in the initial rental period.