I was charged with renting a full-size car for my bosses today.
I found rates that varied from $65.99 to $151.09 for a Wednesday - Friday rental in St. Louis.
Why do the rates vary so? What makes it possible for Thrifty to charge less than half what Hertz charges? Why are the rates all over the map?
It’s a combination of demand and taxes.
Demand being not only when you want a car, but which specific model you want.
Taxes vary a lot from municipality to municipality as well. So if you’re comparing rentals from different suburbs, that could come into play.
Interesting.
These were all from a list of full-sized cars to be picked up at the St. Louis airport, though.
The only thing I could think of is the actual car you get. I assume Thrifty had a lower demand (or crappier???) full-sized car, whereas Hertz has a snazzier, more in-demand full-size? (Considering they don’t tell you exactly what you’ll be getting.) Also, I know that Hertz is often more expensive because they have that cool amenity of being able to pretty much walk to your car and drive off, but how does that justify charging so MUCH more than half of the seven companies I got quotes from?
Hertz is a lot more popular, ergo the demand for Hertz cars is higher. Hertz is my company’s preferred rental agency, and even when prices are higher we’re supposed to use it (although that’s probably subject to change before too long).
The thing with Hertz, though, is that usually (in the last year) you can choose the exact model of vehicle you want when you make a reservation.
The high-end price on these types of things is often set for business travellers. For the high rate, you can usually get the car you want when you want it with no hassle and extra accommodations if there is a problem. You can often get the same car for 1/2 or less if you are a leisure traveller but you take some risks such as signing up for the lowest car on the totem pole and then getting it. Although many companies are more frugal about this than they used to be, many don’t want to look cash strapped and inconvenience employees more than they are already being inconvienced by business travel.
I think Hertz got into the rental game early and still maintains a certain cachet. Plus, as you point out, they do offer a few extra amenities. So they probably cater to the well-heeled/business set who don’t care how much it costs (because they’re loaded or not paying for it). While the budget-minded traveller is willing to put up with slightly more inconvenience in order to save a few dollars/day. I suspect, though, that the distinction between rental companies was once far greater and nowadays they’re pretty much all standardized.
It’s also a result of “yield management”. It’s done now by *everyone * in the travel industries – car rental, airline, hotel, you name it, someone could pay twice as much for the room/car/seat next to yours. At any given point in time, the rate quote will be adjusted as to optimize the projected sales yield at that particular time, based on some seriously complicated formulae.
If you’re a skilful navigator of the big companies’ websites, you CAN find site-only specials that can be as much as half off the official posted price, again depending on time and place (benefitted from that just last December in two separate trips, with National AND Dollar).
I worked in car rental reservations as well as other positions in car rental companies throughout most of the 90s.
On or off airport. In some airports, the company may have a counter and the cars AT the airport. Sometimes, a company may a counter at the aiport, but the vehicles are at an off airport location. Or, the company may be competely off airport requiring a shuttle where the paperwork is handled as well as the car picked up.
Yield management. Remember, company XYZ may only have a few cars left. Perhaps some convention has booked through company XYZ a large number of their cars. The last few cars reserved usually come at a premium price.
There are many thousands of various discounts available. If you looked online, the company may have applied an internet discount. If you called in, the reservation agent may have used a discount code that you’re not even aware of.
A company like Hertz tends to have mostly business customers. Therefore, the company isn’t going to make as much money with the infamous add ons which can raise the price of a rental. The business traveler isn’t going to want to waste time haggling over insurance, upgrade fees, and all the other profits making add ons.
A company like Thrifty tends to have more leisure customers. These less experienced renters are more likely to buy the add ons. The company will also use a stronger sales pitch for the add ons.
As I said upthread, interesting… 
The motivation for my post is that my boss (while a great guy) is a cheap bastard. So, I’m tempted to always go with the very cheapest rental. But my concern was that he’d suffer greater inconvenience due to a less comfortable car/greater risk for problems/less flexibility by focusing solely on price.
It really doesn’t sound like I need to worry about it, though, based on the responses. The factors that seem to affect rates aren’t really anything he cares about, except for if one company in a location has cars at the airport, as opposed to another where he might have to take a shuttle. But again, sometimes he cares about that, but generally not enough to pay more than fifty bucks for it.
So, Thrifty it is!! Thanks, guys.
Another thing that must be taken into account is the age of the fleet. Hertz keeps a very young fleet overall. It is much more expensive to turn your cars at say 11,000 miles and replace them then it would be if you kept them until they had 25,000 miles. On the plus side your rental customers are more likely to get a new or nearly new car when renting from you.
When Hertz says there is Hertz and then there is everybody else, I tend to agree. If you belong to the #1 club Gold Hertz will have your car waiting in a special area with the trunk open and the rental contract hanging off the mirror. No waiting in line. This is worth a whole bunch to a business traveler who has to get in their car and get somewhere.
Those discounts that people have been talking about? Business get them also. I pay about 30% less than the rate posted at Hertz.com.
What Rick said.
Add in the NeverLost, and at a billed rate $80-100 an hour independent, and over $200 an hour as a corporate consultant, the time saved in strange cities can be pretty good on the bottom line.
The past few times I’ve flown, I’ve booked a rental car through Hertz. Each of these 3 times it’s been the Hertz desk at the Buffalo, NY airport. The cars are right out there in the parking garage. The first time, I booked a full-size, which they were out of when we arrived, so they put us in a premium…a Lincoln Towncar. The second and third time, I found deals that got me a premium for the price of a full-size, so I went ahead and booked the towncar both times, rather than hope they’d be out of full size.
Anyway, the first time I flew to Buffalo, I priced all of the different car rental places that were either at the Buffalo airport or close enough that I wouldn’t have to spend $30 on a cab to get there. I checked their websites first, then I made some calls. Hertz had a decent price, but then they started asking questions once I was on the phone. Was I a member of certain organizations (no), did I have an American Express card (yes), etc. I remember those two, because I reserved the car on the American Express card to save 15% and then the lady said “and since you’re a member of blah blah blah, you save an additional 10%”. I said, “Oh no, I’m not a member of blah blah blah.” She said “Sure you are, your rate is $59 a day plus taxes, insurance if you opt to take it, unlimited mileage.” I wasn’t going to complain. It was a Lincoln for $59 a day.
The next trip, I checked the websites again, but called Hertz first. I told them I’d be using my American Express card to reserve the car, and asked if there were any other discounts available. No discounts, but after checking my flight in and out times, they told me that if I waited an hour and 15 minutes after the flight landed to pick up the car, I’d be able to save a whole day, as long as I returned it on time when I left.
Trip after that, I just went straight for Hertz.
I managed to cut nearly half off the retail rental price of the minivan I rented for my honeymoon by booking through Priceline. If there’s ZERO chance you’ll have to cancel, it might be worth looking at.
Aside from that hopefully helpful tidbit, JRDelirious pretty much hit the nail on the head. If your boss has two different vehicle grades he’d like, that can REALLY help things. One time I was able to get the wife “sporty intermediate” at the same price as “compact” because no one seemed to be renting them one weekend. If the boss is an SUV guy, mid-sized SUVS can be a steal during low demand periods. I got a one-week rental on an Escape one time for less than the “mid-size” rate. Apparently the rental company in question was trying to “mileage out” all of its small SUV fleet.
I too, am interested in the OP question. I’m a government traveller, rented lots of cars in my day, and have no idea what the rates are based upon.
Here’s what happened last time I traveled…
Rental :“We can upgrade you for just a few more dollars…”
Me: “No thanks, the compact will be alright”.
Rental: “Well, all we have are minivans anyway, I’ll give you one at the same price”
Me: “Great”
Rental:" Do you like Satellite radio? I can give you one for just $8 more per day"
Me: (thinking, are you kidding, radio for 8 bucks?) “No thanks.”
Rental: “Well, it has it anyway, no extra charge. This is your lucky day!”
Me: “Can you just tell me where the car is?”
It is possible that Hertz notches up the rates a bit because they know they’re not going to be able to sell their add-on insurance - lots, if not most, of corporate purchasing cards include rental insurance, or some companies are big enough to be self-insuring.
Aside from that, Hertz really does shine in the customer service and car quality areas. My company’s big enough that “Gold” service is , and it is very nice when the shuttle bus driver drops you off at the end of the row where the car is and just drive off, rather than having to go into the building and wait in line while a family on vacation is dithering over whether they want to upgrade to a minivan, or quibble among themselves if they really need the insurance while the kids are releasing all that energy that’s been bottled up while they were on the airplane.
The past few times I’ve used them, the cars have all had less than 2,000 miles on them.
Yeah, I love Hertz in general. And I think my boss would love them, too.
At least until it came time to sign the credit card receipt… then he’d flippin FREAK. (He once made me call a hotel to try to dither them down on their catering cost for a can of pop. He thought $1.25 was ridiculous.)
Of course, that’s one area where we differ. To me, time is more important than money.
Good convo there. They’re obviously just trying to squeeze every last dollar out of the cars they have on hand. But then again…
I was pleasantly surprised when I showed up at the rental counter a couple years ago, and, upon looking at the ‘menu’ of cars, started chatting with my wife about how “maybe one day we’d be able to rent a convertible and not the cheapo compact.” It must have been a slow day because the agent said “oh that’s no problem we’ll just upgrade you.” We thought she was kidding. We walked out to find our car, and whaddya know, it was a convertible. We were on our way to a wedding of college friends and got to show off our hour’s worth of windblown hair.
Moral of the story, idle chatter about nicer cars than you’ve reserved may be in your best interests.