By on October 3, 2007

car-rental.jpgThe trickle-down effect from auto makers cutting fleet sales is hitting rental car customers. With fewer cars available and prices going up, rental companies are keeping cars longer and adding fees to cut costs. The Wall Street Journal reports that some customers are starting to notice an increase in the mileage on the cars they rent with a corresponding decrease in their condition. Companies are also cutting back on the perks given regular customers and adding additional charges for services such as after-hours returns; some even dictate where you can refill the car before you return it. They justify their actions by pointing out their profit margin on a $50 rental is only about $5; they'll do what they can to keep from losing money. Thrifty renters wanting to Payless on the National scene need to take Advantage of deals and show some Enterprise by looking at their Budget and squeezing every Dollar till it Hertz.  

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17 Comments on “Rental Companies Feel the Hurt From Reduced Fleet Sales...”

  • avatar

    Maybe these guys should do what Mr. Hertz did when he started his biz in 1924 (and the Hertz automobile was built until 1927). After that, Hertz decided to just buy cars.

    I hear GM, Ford and Chrysler LLC have plenty of old car lines and assembly plants they’d be willing to part with, cheap, like.

    (OK I’m only JOKING here – gaaak, can you imagine being “stuck” with brand-new versions of 1997 Malibu V6 cars for the rest of eternity when renting a car?! Rental car hell…..)

  • avatar

    Seems like an opportunity for the domestics to start fixing their ‘perception gap’ problems. Spend some of their new found savings from the new UAW contract on making their cars that go to rental fleets better. It’s GM’s best chance to get me to test drive their cars, and if impressed by a rental Impala with 50k hard miles on it that would start to change my perceptions. I don’t know a lot about the $ behind interior materials and fit & finish, but have a feeling that an extra couple hunderd bucks per car would go a long way.

  • avatar

    Thrifty renters wanting to Payless on the National scene need to take Advantage of deals and show some Enterprise by looking at their Budget and squeezing every Dollar till it Hertz.

    Good one Frank!

  • avatar
    Dave M.

    I’ll verify this. I picked up a Caliber from Enterprise yesterday while my car is getting fixed. 22k miles, the craptastic interior is worse for the wear, and there’s a strange noise coming out from the driver’s front wheel whenever I go over any type of bump/train track/pothole.

    Should have gone with the PT Cruiser.

  • avatar
    Sajeev Mehta

    This is probably why I saw more Camrys than Tauruses/Fusions last time I visited the Hertz rental counter…if Detroit isn’t dealing, the rentals purchase whatever they want.

    Its just a matter of time before those rental Camrys are dumped into the market and lower Toyota’s (inflated?) residuals.

  • avatar

    Hyundai seems to be big in fleets now, every time my mom comes to visit her rental is a Hyundai, except the time she got upgraded to a Sienna.

  • avatar

    One thing that has to be killing the rental car co’s are the numerous added fees and taxes.

    I rent specialty vehicles from time to time, like jeeps as example, and they usually are only available at some locations like major airports. The list of fees is so long that the cost of them is almost as much as the base weekly rental fee.

    All these fees most likely still apply to junk rentals to go from A to B?

  • avatar

    Considering the level of advertising on TV I’d say the rental companies are going just fine. What is hurting them is the reduced business travel these days and liability claims.

  • avatar

    Five rentals cars in the last 6 weeks: 3 Toyotas, a Hyundai and an Impala. The Impala and one of the Corollas I had had almost 30,000 miles on them – and both of them looked and felt like they just needed to be shot.

    Rental cars take such a beating. I think the Corolla is going to suffer a resale value drop more than anything. I’ve been getting them more frequently than Malibus and Impalas (and the old Taurus, but the rental queen is all but gone now).

  • avatar

    Some of those fees are taxes happily added on by local or state governments (or airports, which are generally run by some level of government) to fill their coffers. Out-of-staters don’t have a say come election time. It’s just like those exorbitant “occupancy taxes” on hotel rooms.

    Just a thought, maybe the rental companies could add slot machines to Vegas cars — gambling (or “gaming” as it’s called in polite society) is another big tax work-around.

  • avatar

    Speaking of Vegas, when I rented a G6 there last March, the oil life monitor was showing 0%, and the windshield washer reservoir was empty; this at 12K miles. Do you think the oil had EVER been changed when I received it?

    Oh and another thing, there was an extra $30 or so tacked onto my bill after I looked it over at home. I called Alamo up and was told it was because I picked up the car slightly late (40 minutes or so) and turned it in about a half hour early. Like I’m supposed to know in advance exactly when the plane will hit the ground, and returning the car early is a crime?

    They did remove the fee.

  • avatar

    I was looking at the comments, thinking – yeah, rental cars and taxicabs share a lot of similarities – they both need to be tough as tanks, get a lot of abuse… too bad Checker is out of business, a diesel Checker Marathon would make one hellacious rental car… comfortable AND tough as old boots.

    Then it dawns on me that there is a company out there looking to produce a purpose-built taxicab again, right here in Michigan.

    Wonder if they’d be wanting to develop a rental car version….?

  • avatar

    Glenn, that is one ugly looking taxi.

  • avatar

    glenn126, I was just thinking the same thing, or at least a similar one. A purpose-built rental car would be pretty neat, although I think that’s what the Chrysler Sebring was planned to be all along…

  • avatar

    i have to laugh when i read complaints about the quality of our rental cars. i used to travel to mexico frequently; the last “rental car” i got was a 90s S10 chevy pickup, manual, 4 cylinders (i think only 2 or 3 were working). it was probably “hot” and i don’t mean that in a pamela anderson sort of way! it was dirty, beat up, made awful noises, tires worn (and god knows what the pressures were). 50 mph was an adventure. i felt lucky to arrive at my destination at all. everything’s relative i guess.

  • avatar

    You mean the rental companies will actually have to start changing the oil and everything? I’m shocked.

    Perhaps a good move by GM/Ford/Chryco – lower fleet sales – prices go up – the restart fleet sales at elevated prices.

  • avatar

    I’m not convinced this direction will do anything to improve residual values of (former) fleet queens. Consider that under this new “ride ’em hard and put them up wet” run them into the ground first approach, any resale value these models might have had at 20K will be next to nil at 50K+. Average resale value will be lower, not higher.

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