Rising Rental Rates – And How to Cut Your Costs

July 30, 2008
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And you think you've seen gas prices soar? Try renting a car, these days, as I do, during some of my travels, despite all the press cars I review, while on the road.

Rates have been rising fast, I've found, in places ranging from Newark, New Jersey, to Los Angeles, as well as Nashville and other points in between. Nail Abrams, a rental car consultant with Abrams Consulting Group, echoes that finding, using a proprietary tracking system his firm has developed.

Need a mid-size sedan for a quick business trip? Expect to shell out $82 a day, up from $62 a year ago. Meanwhile, week-long rates have also shot up, though not nearly as much.

Why the high prices? Costs are going up, starting with a rental firm's primary product, the car itself. Manufacturers like Ford and General Motors have been slashing back their production for fleet customers, particularly those daily rental companies. For one thing, they don't make much - if any - money on those sales, and the cheapo versions dumped into fleets can hurt, rather than help, a product's public image. But other costs, from manpower to maintenance, are soaring, as well.

So, what's a traveler to do? The first rule is to shop around. On one of my own recent sojourns, I found my options ranged from as little as $40 a day to more than $80, and all for the same class of car. It's not just who you rent from, but where. Turn to a rental company that has a location right on airport property and you may get socked with hidden fees that will drive up your final price sharply. You could get a much better deal going to an alternate location, say in downtown Newark, rather than at the airport, and it could more than cover the cost of a cab, just for one day.

Check for hidden deals online or specials offered through various organizations you belong to, such as AAA or AARP. And you can play one rental company off another. I prefer one brand, which gives me good frequent-user credits. But it's a bit costlier, so I usually check the competition, first, then ask my preferred vendor to match any better rate. Often, they will, or they might throw in some perk, like a larger car or free use of a portable navigation system.

Be absolutely clear if you accept any options, like that navi system, or even sign for an extra driver. If you're absolutely the only one who'll get behind the wheel, why add to your costs by signing up your spouse or business partner? And check with both your credit card company (or companies) and your personal or corporate car insurance agent. Rental firms make millions selling expensive insurance riders to customers who actually should have coverage already.

Finally, check the options for fuel. You can get seriously burned by a rental car company if you don't bring back your car with a full tank - unless you've signed on for some other arrangement. Some firms will pre-charge you for a full tank. Others have deals that charge a set price, per gallon, if you use the car for just short runs, say 50 or 75 miles. And a few rental firms are now promising to charge local market rates, rather than exorbitant premiums - which we've seen run as high as $9 a gallon, in some locations.

Consider how much driving you'll do - but also whether you'll want to stop and gas up before rushing back, frantically hoping to make your flight.

There's no escaping the fact that car rental costs are rising. But you can minimize the impact if you take some to prepare and think through your plans.

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