With Memorial Day in sight, you might get that old wanderlust and find yourself renting a car next weekend. Just go into the process knowing the car rental companies have stacked the financial odds against you — and know how to balance the odds in your favor.
Why are rental car companies stacking those odds — and how are they doing so? In a word, it’s all about the Great Recession. Both car manufacturers and rental car companies have taken a financial bath from the economic downturn. The average mileage on a Hertz (Stock Quote: HTZ) rental, for example, was about 15,000 to 18,000 in 2009, while the industry average is closer to 10,000. That’s because the company was offering fewer cars to save on expenses.
Car rental customers have other complaints, too. In a USA Today survey of 1,300 business travelers cited an alarmingly high number of responses about filthy cars with more dents and dings on the outside, reduced customer service, long waits at the rental counter, and less car selection.
The price of renting a car has risen, as well. Avis (Stock Quote: CAR) reports that the average daily price of an auto rental rose by $3 in 2009. That’s a big reason why the bottom lines improved for major car rental firms like Avis, Hertz and Dollar-Thrifty (Stock Quote: DTG). The stock price for Dollar-Thrift alone rose from $1 per share in 2009 to $33 in early 2010.
Hertz has read the tealeaves and has added 80,000 new cars to its fleet in the last quarter of 2009 alone, and is planning more new vehicles this year. That should bring average car mileage to 12,000, company officials say.
Even so, the onus of getting a good rental care deal has increasingly fallen on the shoulders of the customer.
Your best strategy in renting some wheels? Be prepared — and flexible. Follow these tips to get you behind the wheel at a decent price.
Be careful with debit cards. Rental car companies may not appreciate your use of a debit card (or heaven forbid — cash). If you use a bank debit card, use one with a familiar logo, i.e. Visa (Stock Quote: V) or MasterCard (Stock Quote: MC). The rental car firm may also place a “hold” of up to $500 to cover any deposit issues. Always make sure you have enough cash in your bank account to cover a so-called block — and leave you with enough money to spend on your trip.
Insurance coverage? Rental car companies will offer you insurance coverage, and many credit card companies also offer automatic coverage. But don’t count on it. Contact both your insurance company and your credit card company to see if you’re covered for rental insurance or not. If not, expect to pay up to $40 a day for rental car insurance.