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Car Rental Tips

Save on your business travel budget by renting smart.

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Introduction

Car rentals typically represent 15% of a firm's travelbudget. In coming years, this percentage threatens to gosignificantly higher as rental rates continue to rise. But theindustry remains highly competitive, which will allow you to atleast slow the rate of increase.

There are seven firms that target the business rental market.Hertz and Avis are the largest, typically offering the largestnumbers of cars and the most airport rental locations. Othercompetitors include Budget, National, Alamo, Dollar, andThrifty.

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In many areas, a second rental option consists of regional firmsthat target the leisure market. Although most leisure-orientedrental firms have fewer locations, they can often be found byairports. In addition, some offer a level of service comparable tothe national firms. Some of the largest regional agencies are Valueand Payless.

There are also a number of firms that concentrate on rentals torepair shops. Although most of these firms are located outside theairport and do not actively seek business travelers, they can beconsidered in a pinch. The largest firm in this market isEnterprise, which offers the largest number of rental locations ofany firm nationwide.

This buying guide is designed to give you the facts you need toselect a rental firm for business travelers at your company. Youcan choose to read this guide from beginning to end, or jumpdirectly to a section of interest by clicking on the linksabove.

Differences

The biggest difference among rental firms concerns how rapidlyyou can rent and return a car. In most cases, the rest of yourrental will be fairly similar no matter which firm you use, sinceall the major rental agencies use new cars and remove them fromservice after about 20,000 miles.

Agencies speed the rental process in three ways. First, rentallots can be located close to airline terminals, resulting in ashorter bus ride. Major firms such as Hertz and Avis often featureon-airport lots, while other agencies such as Thrifty typically useoff-airport rental centers.

Some car rental agencies also offer express pickup services toshorten rental time. This allows you to avoid the line at therental counter, which can be very busy when many planes haverecently arrived. Hertz, Avis, National, and Budget even haveprograms that allow customers to proceed directly to a car anddrive away without waiting in any line.

A third feature that can save time is a quick return service.These allow you to return a car without waiting in line. Some firmsoffer automated terminals, while others staff the return lots withparking lot attendants that can record return information on awireless computer.

Altogether, services such as these will help you save about tenminutes on each end of a trip. However, this time savings does comeat a premium. Renters typically pay an additional $10-$20 per daywhen choosing a firm that offers these services. As a result, youmay want to limit your use of the fastest vendors to times when yourequire the extra level of service.

Corporate Accounts

Corporate accounts tend to be a very good deal even forinfrequent renters. There are no sign-up fees, and you can save anaverage of 20% on every car you rent.

In addition to lower rates, corporate accounts can provide otherbenefits. Many programs offer free upgrade coupons or free rentaldays to members. Rental firms will also guarantee cars in times ofhigh demand for account holders, meaning a corporate renter willrarely face a situation in which no cars are available.

Rental Strategies

If your firm spends more than $15,000 to $20,000 yearly onrentals, you should try to concentrate all your rentals with onefirm. This will allow you to negotiate larger discounts or obtainadded insurance benefits.

However, if your company's usage falls below this level, itcan make more sense to join the corporate programs of severalagencies, so you can select the best one depending on local ratesand special offers.

Rental Insurance

Purchasing rental insurance from a rental agency (typically acollision damage waiver, or CDW) tends to be a relatively poorbargain. Rental firms typically will charge you several times theactual value of the insurance.

For more cost-effective coverage, you should obtain insurancethrough a corporate or personal credit card. Many gold cards offerauto insurance coverage to rentals made with the card. Larger firmsmay want to add collision and liability insurance as part of theirstandard insurance package, or negotiate insurance coverage as partof a rental agreement.

Pricing

Rental rates vary depending on the size of the car,availability, and the rental agency.

Most rental firms offer several sizes of automobiles, rangingfrom compact through intermediate and full-sized. Moving up a sizeis generally not very expensive, but specialty cars and vans/trucksoften cost much more.

Local supply and demand also has an enormous effect on rentalrates. Leisure areas such as Florida are usually very inexpensive,since the major rental agencies compete with dozens of smallerfirms. Cities such as New York and Chicago tend to be veryexpensive, since space is limited and demand is high.

There is also tremendous variation depending on the reservationsmade for that day. Rental firms are increasingly using yieldmanagement systems to predict demand and raise prices in popularareas. This means that rates are likely to go up if there is amajor convention or new tourist attraction.

Depending on the rental agency you choose, rates may be aslittle as one-half of the most expensive choice. For one-timerentals, Hertz and Avis are generally at the top of the pricescale, with Thrifty, Dollar, and Alamo nearer to the bottom.However, corporate discounts can result in 20%-25% savings offdaily rental rates.

Buying Tips

Lowering rates
You may be able to negotiate lower corporate rates if you canguarantee reservations. Unlike hotels, most car rental agencies donot penalize customers who do not cancel reservations. This hasresulted in an average 15% to 40% overbooking of reservations, andmade fleet management quite difficult for the car rental agencies.By guaranteeing reservations, you can potentially knock off acouple of dollars per rental.

Drivers under 25
If you have many employees under the age of 25, negotiate ways toeliminate underage surcharges or waive an underage exclusionpolicy.

Mileage caps
If most of your firm's rentals cover a fairly limited area, youmay be able to obtain a 100 miles/day cap in exchange for lowerdaily rates. In this case, you can get $4 to $5 per day off thestandard corporate rate.

Corporate allowances
Make sure to negotiate what will happen if a retail rate isavailable for less than your corporate rate. Some agencies willallow you to default to the lower rate (or even less) under thecorporate plan, while others will only let you switch if you agreeto give up your corporate benefits.

Hourly rentals
Value is unique in offering hourly rentals in all its locations. Atraveler in town for a brief business meeting can now pay as littleas $1.59 per hour to rent a car, instead of having to pay a fullday rate.

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