Monday, July 28, 2008
Car rental rates rise with costs
Consulting company says the reason for the hike is decreasing fleet sizes, consumer demand.
ROMULUS -- If you thought expensive plane tickets and rising gas prices were the last of your travel woes, think again. Car rental costs also are rising, adding another financial jolt to the journey.
"Rates are up substantially year over year," car rental consultant Neil Abrams said. "There is some variation depending on whether you're renting on- or off-airport, and whether you're looking for daily or weekly rentals, but in general prices are going up."
Abrams' company, Abrams Consulting Group Inc., developed a travel data rate index that compiles information from eight different rental companies and tracks rates from week to week.
Looking at the price of a rental on a mid-sized car, the Purchase, N.Y.-based consultant found a $20-a-day increase from last year. For example, he said, the cost of a one-day rental, booked one day in advance, was $82 this week, compared with $62 during the same week last year.
For a week-long rental, the difference was $8, with prices growing from $284 to $292.
The reason for the price hike, Abrams said, is that rental companies are decreasing the number of cars in their fleets, going from more than 2 million cars to 1.7 million nationally in the past three years. Combine a steady demand for rental cars and companies trying to squeeze the same amount of revenue out of fewer cars, and the price for consumers is heading up.
"I've noticed that it's gone up significantly," said Barbara Blair of Frederick, Md., who was returning a car to Dollar Rent A Car at Metro Airport recently. She rents a car two or three times a year when she and her husband visit family in Toledo.
"It definitely makes us shop around more," she said.
"We don't really have another option. I'm just on the Internet more comparing prices."It could be worse, some experts say.
Chris Brown, managing editor of Auto Rental News, a magazine for the car and truck rental industry, said steep competition within the industry has kept prices from rising as high as car rental companies might like. There are 14 major rental companies at play in the $21 billion industry, with 17,000 branches nationwide.
Scott Walker of Lakeland, Fla., saved money by keeping an eye out for special offers. He rented a Dodge Nitro for $330 a week from Dollar, booking two days in advance when he saw an ad for the low price.
"I made a reservation with Alamo months ago, and that was at $470," Walker said. "When I saw this deal, I jumped on it."
Walker was picking up the car with his wife, Shelly, and their two children last week to drive to Pigeon, Mich., for a high school reunion.
Michael Graham, who picked up a car at Thrifty Car Rental recently, commutes every week from Greenville, S.C., to his automotive supplier job in Auburn Hills. He pays close attention to pricing, even if the money isn't coming out of his own pocket.
"I rent cars every week, and the pricing here (at Thrifty) is better than anywhere else," Graham said. "I have to pay attention to that; I have to stay within my budget."
Ned Maniscalo, a spokesman for Enterprise Rent-A-Car, said he sees prices increasing, but not significantly. "I would be surprised if they've gone up 10 percent," he said.
Brown said rental companies are trying to increase revenue in other ways, like streamlining business and increasing sales of cars they no longer rent. But, he said, they still have to raise rates for consumers.
"If supply is decreasing, you've got to recoup that money somehow," he said.
LINK:Car rental rates rise with costs