REPORT: Prepare to shell out a lot more for your next rental car
Hertz Fun Collection Chevrolet Corvette ZHZ - click above to enlarge
The economy is in one of the deepest recessions in decades, and one pleasant side-effect of fiscal woes is that many companies are offering huge discounts to get you off the consumer sidelines. One industry that hasn't gone that route so far is the rental car industry. Abrams Consulting Group tells The New York Times that the cost of a week-long rental went from $199 in May 2008 to $345 this year; a 73% increase. The news hasn't gotten much better for June, as the prices went up 65% from $210 to $347. If car rentals are down 15% on the year, why the increase?
The reason for the jump in prices is that there are fewer vehicles to rent, as companies like Hertz and Avis have cut back on the amount of vehicles that they're buying. They're also selling vehicles to used-car starved dealerships. The result of smaller fleets is customers paying more for the cars and trucks that are left. And since customers have become accustomed to getting their rentals at the last minute, some aren't getting a rental at all.
To beat the car rental blues, The New York Times suggests that you start your search earlier. Not getting a rental from companies at the airport is also a good idea, as off-airport companies don't have as much demand. Sites like Priceline and Expedia also generally offer discounts over retail.
[Source: New York Times]
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Reader Comments (Page 1 of 2)
John P. 7:48PM (7/01/2009)
I found that using rent-a-wreck is pretty much the only way to go if it's convenient enough (generally is) and I'm paying out of my own pocket.
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KT 7:58PM (7/01/2009)
It's not that they aren't buying as many, it's more that fewer are being sold to rental companies. Also, they are buying their fleets now as opposed to using the manufacturer's repurchase programs.
Now that they "own" the vehicles and are on the hook for the depreciation, they are keeping them longer to recoup as much as possible before wholesaling them. You may notice that your rental is over a year old and has 36k miles on it. That was unheard of just a few years ago.
Long story short, they have to recoup as much depreciation as possible in the shortest amount of time, thus the higher rates. They used to just keep them about 6 months or 25k miles, whichever came first.
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CanadianUser 8:04PM (7/01/2009)
How is it that, in Canada, a month-long rental for a Honda Civic is 200$ (CAN) ?!?
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Redline 11:14AM (7/02/2009)
Cause Canada is awesome :)
Shiftright 8:07PM (7/01/2009)
Sounds like a great strategy to increase your business during a recession. Are they run by GM or something?
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oucwboy 11:31PM (7/05/2009)
must be ran by obama
Shiftright 11:55PM (7/05/2009)
Right, because Obama was responsible for GM's decades of inferior engineering, uncompetitive product, lack of long term planning, and ignorance of market preferences and demand.
gerrrg 8:12PM (7/01/2009)
Worse, localities are raising the taxes on rentals. Expect to pay double-digit tax rates on your next rental.
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sam 8:22PM (7/01/2009)
I have always gotten good deals from Hotwire on rentals.
jrhmobile 9:00PM (7/01/2009)
But you can get an even better deal if you learn how to hotwire rentals.
Patrick 10:01PM (7/01/2009)
My daily commute takes me past auxiliary parking lots for Avis. These lots are is where they store cars not immediately needed for renting at the local airport office around the corner. It is normally full of cars, especially on weekends.
Except, the aux lots are now sitting completely empty for weeks at a time. Last year, full to the brim on weekends and half empty during the week, and empty when major events were in town. There's nothing major going on now and the lots still sit empty on the weekends. The reason is, they no longer need the Aux space because they've gotten rid of so many other older cars either by outright sale or at auctions. All the cars they need to rent out now fit in their main airport lot.
With fewer to rent, there's less need to offer bargains to keep the fleet rented. And prices go up. Not a shock to me.
It also means they no longer need shuttle drivers to transport cars to and from these aux storage. Probably a dozen jobs axed right there.
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Jason 10:57AM (7/02/2009)
Even more expensive here in Colorado. They just past a tax initiative the raises our vehicle registrations over $40/year, and car rentals $2/day to help pay for road work.
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Jason 10:57AM (7/02/2009)
*passed*
montoym 3:44PM (7/02/2009)
Well, Ritter wasn't allowed to refer to it as a "tax increase" for fear that it would actually have to be voted on.
Remember, it's a "fee increase", not a "tax increase". This despite the fact that it clearly states "Own Tax" on my registration card.
Jpcahn 10:26PM (7/01/2009)
Hertz especially and Avis as well are a rip off in my opinion. We always rent from Enterprise because the rates are usually half what Hertz is charging. We rented a few minivans for a trip and they gave us loaded GMC Acadias with leather seats and a Bose system for the same price!
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Sentinelist 1:15AM (7/02/2009)
I had to chime in here (first timer commenter, long time reader... and I rented a ZHZ identical to the one in this post several months ago! what a hoot). I'm renting a Volvo S80 (so I'm told- anyone remember the 'reservation' Seinfeld scene?) next week out of the airport in Seattle for five days and went straight through hertz.com. My tally? $537.96 while I'm comparing cars and rates. Well, ok... it is a 'Premium' car, and it's a special occassion for a week (conference/friend's wedding/'babymoon' last trip before our first born arrives in November). I'll take it.
But folks, here's where it gets bad. Someone explain to me what justifies $201.46 in fees and taxes? You read that correctly. On top of the $537.96, for a grand total of $739.42. Mother of God. Taxes alone with no explanation are 115.89 (?!?!). The fees are as follows: Airport concession fee recovery, 60.29; Customer Facility Charge, 20.00; Vehicle Licensing Cost Recovery, 4.25; ENERGY SURCHARGE, 1.03. WTF? I will be questioning my helpful Hertz rep at the counter for good explanations before I sign anything. But more than likely, I'll be over a barrel, just like you next time. Rates are comparable across rental companies on travelocity.com. Be forewarned, and make sure you drive the snot out of it (not as in abuse, but get in some good drives to make it as worth your while as possible!). We're gonna take it to Canada for a nice drive through the mountains above Vancouver or something and then valet that thing at a nice restaurant afterwards. In the end, we'll be glad we didn't get the base V6 Charger.
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Jake B 4:13AM (7/02/2009)
I always feel bad for poor abused rental cars, but sometimes they deserve it like the naughty cars that they are.
Dan 6:59AM (7/02/2009)
The same reason there are 20% local taxes on hotel rooms; because they are largely paid by tourists who don't get a vote. Sending the bill to people who aren't your constituents is always the easiest solution politically - witness the Obama budget the next generation will pay for.
Dan 11:53PM (7/04/2009)
No clue on the energy surcharge -- but the other charges are as follows. The "concession recovery fee" reimburses the rental company for the money they pay to be located at the airport. The "facility charge" is generally a direct tax levied on airport car rentals. And the "licensing recovery" charge is to reimburse the rental car company for the cost of licensing the car (plates, municipal stickers, inspections, etc.).
The facility charge is an actual tax, but the rest are kind of ridiculous. What other business charges you a fraction of his rent when he sells you something?
Erik 10:36AM (7/02/2009)
I have paid $10 a day for my last 2 rentals. A premium for 4 days in Vegas in Feb and midsize in Jersey for 4 days in June. Booked em on the Alamo site.
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