<PAGE>

                                                                     EXHIBIT 3.2

 
                                     BY-LAWS
                                      -OF-
                             UNITED RENTALS, INC.
          (a Delaware corporation hereinafter called the "Corporation")

                          Effective as of July 20, 1998

                                    ARTICLE I
                                     Offices

            SECTION 1.01. Offices. The Corporation may have offices both within
and without the State of Delaware as the Board of Directors may from time to
time determine.

                                   ARTICLE II
                            Meetings of Stockholders

            SECTION 2.01. Place of Meetings. Meetings of stockholders may be
held at any place, either within or without the State of Delaware, designated by
the Board of Directors.

            SECTION 2.02. Annual Meeting. The annual meeting of stockholders for
election of directors shall be held on such date and at such time as shall be
designated by the Board of Directors. Any other proper business may be
transacted at the annual meeting.

            SECTION 2.03. Special Meetings. Stockholders are not permitted to
call a special meeting of stockholders or to require the Board of Directors or
officers of the Corporation to call such a special meeting. A special meeting of
stockholders may only be called by a majority of the Board of Directors or by
the chief executive officer. The business permitted to be conducted at a special
meeting of stockholders shall be limited to matters properly brought before the
meeting by or at the direction of the Board of Directors. Any action required or
permitted to be taken by the stockholders must be taken at a duly called and
convened annual meeting or special meeting of stockholders and cannot be taken
by consent in writing.

            SECTION 2.04. Quorum. The holders of a majority of the shares
entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum at all meetings 
<PAGE>
 
of the stockholders for the transaction of business except as otherwise provided
by statute or by the certificate of incorporation.

            SECTION 2.05. Organization. Meetings of stockholders shall be
presided over by the Chairman, if any, or in his absence (or election not to
preside) by the Vice Chairman, if any, or in his absence (or election not to
preside) by the President, or in his absence (or election not to preside) by a
Vice President, or in the absence of the foregoing persons by a chairman
designated by the Board of Directors, or in the absence of such designation by a
chairman chosen at the meeting. The Secretary shall act as secretary of the
meeting, but in his absence (or election not to so act) the chairman of the
meeting may appoint any person to act as secretary of the meeting.

            SECTION 2.06. Conduct of Meetings. The Board of Directors may adopt
such rules and regulations for the conduct of the meeting of stockholders as it
shall deem appropriate. Except to the extent inconsistent with such rules and
regulations as adopted by the Board of Directors, the chairman of any meeting of
stockholders shall have the right and authority to prescribe such rules,
regulations and procedures and to do all such acts as, in the judgment of such
chairman, are appropriate for the proper conduct of the meeting. Such rules,
regulations or procedures, whether adopted by the Board of Directors or
prescribed by the chairman of the meeting, may include, without limitation, the
following: (i) the establishment of an agenda or order of business for the
meeting; (ii) rules and procedures for maintaining order at the meeting and the
safety of those present; (iii) limitations on attendance at or participation in
the meeting to stockholders of record of the Corporation, their duly authorized
and constituted proxies or such other persons as the chairman of the meeting
shall determine; (iv) restrictions on entry to the meeting after the time fixed
for the commencement thereof; and (v) limitations on the time allotted to
questions or comments by participants. Unless and to the extent determined by
the Board of Directors or the chairman of the meeting, meetings of stockholders
shall not be required to be held in accordance with the rules of parliamentary
procedure.

            SECTION 2.07. Nomination of Directors. Only persons who are
nominated in accordance with the following procedures shall be eligible for
election as directors; provided, however, 


                                       2
<PAGE>
 
that the following procedures shall not apply to the nomination of persons for
election as directors by vote of any class or series of preferred stock of the
Corporation. Nominations of persons for election to the Board of Directors of
the Corporation at the annual meeting may be made at such meeting by or at the
direction of the Board of Directors, by any committee appointed by the Board of
Directors or by any common stockholder of the Corporation entitled to vote for
the election of directors at the meeting who complies with the notice procedures
set forth in this Section 2.07. Such nominations, other than those made by or at
the direction of the Board of Directors or by any committee appointed by the
Board of Directors, shall be made pursuant to timely notice in writing to the
Secretary of the Corporation. To be timely, a stockholder's notice must be
delivered to or mailed and received at the principal executive offices of the
Corporation not less than 60 days nor more than 90 days prior to the meeting;
provided, however, that in the event that less than 70 days' notice or prior
public disclosure of the date of the meeting is given or made to stockholders,
notice by the stockholder to be timely must be so received not later than the
close of business on the fifteenth day following the day on which such notice of
the date of the meeting was mailed or such public disclosure was made, whichever
first occurs. Such stockholder's notice to the Secretary shall set forth (a) as
to each person whom the stockholder proposes to nominate for election or
re-election as a director, (i) the name, age, business address and residence
address of the person, (ii) the principal occupation or employment of the
person, (iii) the class, series and number of shares of capital stock of the
Corporation which are beneficially owned by the person and (iv) any other
information relating to the person that is required to be disclosed in
solicitations for proxies for election of directors pursuant to the Rules and
Regulations of the Securities and Exchange Commission under Section 14 of the
Securities Exchange Act of 1934, as amended; and (b) as to the stockholder
giving the notice (i) the name and record address of the stockholder, (ii) the
class, series and number of shares of capital stock of the Corporation which are
beneficially owned by the stockholder and (iii) a description of all
arrangements or understandings between the stockholder and each nominee and any
other person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the stockholder. Such notice shall
be accompanied by the executed consent of each nominee to serve as a director if
so elected. The Corporation 


                                       3
<PAGE>
 
may require any proposed nominee to furnish such other information as may
reasonably be required by the Corporation to determine the eligibility of such
proposed nominee to serve as a director of the Corporation. No person shall be
eligible for election as a director of the Corporation by the holders of Common
Stock of the Corporation unless nominated in accordance with the procedures set
forth herein. The officer of the Corporation presiding at an annual meeting
shall, if the facts warrant, determine that a nomination was not made in
accordance with the foregoing procedure and, if he should so determine, he shall
so declare to the meeting and the defective nomination shall be disregarded.

            SECTION 2.08. Advance Notification of Business to be Transacted at
Stockholder Meetings. To be properly brought before the annual or any special
meeting of stockholders, business must be either (a) specified in the notice of
meeting (or any supplement or amendment thereto) given by or at the direction of
the Board of Directors or any committee appointed by the Board of Directors, (b)
otherwise properly brought before the meeting by or at the direction of the
Board of Directors, or (c) otherwise properly brought before an annual meeting
by a stockholder. In addition to any other applicable requirements, for business
to be properly brought before any annual meeting of stockholders by a
stockholder, the stockholder must have given timely notice thereof in writing to
the Secretary of the Corporation. To be timely, a stockholder's notice must be
delivered to or mailed and received at the principal executive offices of the
Corporation not less than 60 days nor more than 90 days prior to the meeting;
provided, however, that in the event that less than 70 days' notice or prior
public disclosure of the date of the meeting is given or made to stockholders,
notice by the stockholder to be timely must be so received not later than the
close of business on the fifteenth day following the day on which such notice of
the date of the meeting was mailed or such public disclosure was made, whichever
first occurs. Such stockholder's notice to the Secretary shall set forth as to
each matter the stockholder proposes to bring before the meeting (i) a brief
description of the business desired to be brought before the meeting and the
reasons for conducting such business at the meeting, (ii) the name and record
address of the stockholder proposing such business, (iii) the class, series and
number of shares of capital stock of the Corporation which are beneficially


                                       4
<PAGE>
 
owned by the stockholder and (iv) any material interest of the stockholder in
such business.

            No business shall be conducted at the annual or any special meeting
of stockholders unless it is properly brought before the meeting in accordance
with the procedures set forth in this Section 2.08, provided, however, that
nothing in this Section 2.08 shall be deemed to preclude discussion by any
stockholder of any business properly brought before the meeting in accordance
with the procedures set forth in this Section 2.08. The officer of the
Corporation presiding at the meeting shall, if the facts warrant, determine that
business was not properly brought before the meeting in accordance with the
provisions of this Section 2.08 and, if he should so determine, he shall so
declare to the meeting and any such business not properly brought before the
meeting shall not be transacted.

            SECTION 2.09. Compliance with Securities and Exchange Act of 1934.
Notwithstanding any other provision of these By-laws, the Corporation shall be
under no obligation to include any stockholder proposal in its proxy statement
materials or otherwise present any such proposal to stockholders at a special or
annual meeting of stockholders if the Board of Directors reasonably believes
that the proponents thereof have not complied with Sections 13 and 14 of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder, and the Corporation shall not be required to include in
its proxy statement material to stockholders any stockholder proposal not
required to be included in its proxy material to stockholders in accordance with
such Act, rules, or regulations.

                                   ARTICLE III
                                    Directors

            SECTION 3.01. Number of Directors. The number of directors which
shall constitute the entire Board of Directors shall be as set by the Board of
Directors from time to time. No reduction in the number of directors
constituting the entire Board of Directors shall have the effect of removing any
director before that director's term of office expires.

            SECTION 3.02. Term of Office. Subject to the provisions of the
certificate of incorporation, each director, including a director elected to
fill a vacancy, shall hold office 


                                       5
<PAGE>
 
until such director's successor is elected and qualified or the earlier
resignation or removal of such director.

            SECTION 3.03. Meetings. The Board of Directors of the Corporation
may hold meetings, both regular and special, either within or without the State
of Delaware. Regular meetings of the Board of Directors may be held without
notice at such time and at such place as may from time to time be determined by
the Board of Directors. Special meetings of the Board of Directors may be called
by the Chairman, the Vice Chairman, the Chief Executive Officer, the President
or the Secretary or by resolution of the Board of Directors. Unless waived,
notice of the time and place of special meetings shall be delivered to each
director either (i) personally (either orally or in writing), (ii) by telephone,
(iii) by telex, telecopy or other facsimile transmission, or (iv) by first-class
mail, postage prepaid, addressed to a director at that director's address as it
is shown on the records of the Corporation. If the notice is mailed, it shall be
deposited in the United States mail at least four days before the time of the
holding of the meeting (ten days in the case of a director whose address as
shown on the records of the Corporation is outside of the United States of
America). If the notice to a director is delivered in any other manner it shall
be delivered (which shall for this purpose mean received by the director) at
least 24 hours before the time of the holding of the meeting.

            SECTION 3.04. Quorum. At all meetings of the Board of Directors, a
majority of the entire Board shall be necessary and sufficient to constitute a
quorum for the transaction of business.

            SECTION 3.05. Organization. Meetings of the Board of Directors shall
be presided over by the Chairman, if any, or in his absence by the Vice
Chairman, if any, or in the absence of the foregoing persons by a chairman
chosen at the meeting.

            SECTION 3.06. Meetings by Conference Telephone or Similar Device.
Members of the Board of Directors, or any committee designated by the Board of
Directors, may participate in a meeting of the Board of Directors, or any
committee, by means of conference telephone or similar communications equipment
by means of which all persons participating in the meeting can 


                                       6
<PAGE>
 
hear each other, and such participation in a meeting shall constitute presence
in person at the meeting.

            SECTION 3.07. Board Action by Written Consent Without a Meeting. Any
action required or permitted to be taken at any meeting of the Board of
Directors, or of any committee thereof, may be taken without a meeting if all
members of the board or committee, as the case may be, consent thereto in
writing and the writing or writings are filed with the minutes of proceedings of
the board or committee. Written consents representing actions taken by the board
or committee may be executed by telex, telecopy or other facsimile transmission,
and such facsimile shall be valid and binding to the same extent as if it were
an original.

                                   ARTICLE IV
                                    Officers

            SECTION 4.01. General. The officers of the Corporation shall be
chosen by the Board of Directors and shall be a Chairman, a Vice Chairman, a
Chief Executive Officer, a President, a Chief Financial Officer, and a
Secretary. The Board of Directors, in its discretion, may also choose one or
more Vice Presidents, Assistant Secretaries, and other officers. Each such
officer shall hold office until his resignation or removal. The Board of
Directors may remove any officer with or without cause at any time, but such
removal shall be without prejudice to the contractual rights of such officer, if
any, with the Corporation.

            SECTION 4.02. Powers and Duties of Officers. The chief executive
officer of the Corporation shall have such powers in the management of the
Corporation as may be prescribed in a resolution by the Board of Directors and,
to the extent not so provided, as generally pertain to such office. The chief
executive officer shall see that all orders and resolutions of the Board of
Directors are carried into effect.

            The other officers of the Corporation shall have such powers and
duties in the management of the Corporation as may be prescribed in a resolution
by the Board of Directors or delegated to them by the chief executive officer
and, to the extent not so provided or delegated, as generally pertain to their
respective offices, subject to the control of the Board of Directors and the
chief executive officer. Without limiting the foregoing, the 


                                       7
<PAGE>
 
Secretary shall have the duty to record the proceedings of the meetings of the
stockholders and directors in a book to be kept for that purpose.

                                    ARTICLE V
                                  Miscellaneous

            SECTION 5.01. Waivers of Notice. Whenever any notice is required by
law, the Certificate of Incorporation or these By-laws, to be given to any
director, member of a committee or stockholder, a waiver thereof in writing,
signed by the person or persons entitled to said notice, whether before or after
the time stated therein, and, in the case of a waiver of notice of a meeting,
whether or not the business to be transacted at or the purposes of such meeting
is set forth in such waiver, shall be deemed equivalent thereto. The attendance
of any person at any meeting, in person or, in the case of the meeting of
stockholders, by proxy, shall constitute a waiver of notice of such meeting
except where such person attends such meeting for the express purpose of
objecting at the beginning of such meeting to the transaction of any business on
the grounds that such meeting is not duly called or convened.

            SECTION 5.02. Fiscal Year. The fiscal year of the Corporation shall
be fixed from time to time by the Board of Directors.

            SECTION 5.03. Seal. The corporate seal shall have inscribed thereon
the name of the Corporation and shall be in such form as may be approved from
time to time by the Board of Directors.

            SECTION 5.04. Entire Board. As used in these By-laws, "entire Board
of Directors" means the total number of directors which the Corporation would
have if there were no vacancies in the Board of Directors.


                                       8