Car Rental Agencies Driving Up Rates for Summer Travel

Ladies and gentlemen, start your rental-car engines. But first, consult your checkbook and your odometer.

Industry experts say rental-car rates, boosted by summer travel demand, reach their highest level of the year between the Fourth of July and Labor Day. If you need a car, be sure to compare prices and make advance reservations. And be prepared for a car that is no longer new--especially if you’re in an out-of-the-way destination.

First of all, rental companies over the last several years have been moving to keep cars in circulation longer. The typical circulation period, which was down around six months when this decade began, has grown at many major companies to a year or more. In fact, at Alamo Rent a Car, based in Fort Lauderdale, Fla., officials earlier this year disclosed that they had started acquiring used cars as well as new models. The measure was designed to cut costs and affects only “a very, very small percentage of our fleet,” a spokeswoman said. “But we do make sure we follow the highest safety standards possible.” She said the company “doesn’t typically discuss” the ages of its vehicles.

Another factor to consider: Since summer is the car industry’s busiest season, says Jon LeSage, executive editor of Auto Rental News in Redondo Beach, many companies “have to do what they call ‘fleeting up.’ ” Thus, LeSage says, many outlets will hold onto vehicles a little longer than usual.

“Probably on most of them, you’re going to see mileage from 12,000 to 15,000 miles. And you’re going to see some used cars too, with 18,000 to 20,000 miles,” LeSage says. “Once in a while one of the franchisees does that. But that’s going to be a minority of the cars out there.”

And sometimes, franchisees hold on to their cars even longer. When I arrived in Redding on June 21, the airport Avis outlet gave me a Chevrolet Cavalier for about $50 a day, including taxes. But when I got in, I found an odometer showing more than 58,000 miles. The car was about 3 years old. Further, the brakes grabbed a bit and the electrical system was downright eccentric: If I turned on my headlights, all my dashboard lights went dark, including my speedometer, and vice versa. Which made for an interesting choice: Did I want to know where I was going or how fast?

Because I didn’t make these discoveries until I was far away from the airport, and because an unilluminated dashboard didn’t seem to pose a serious threat to my safety, I stuck with the vehicle and didn’t register my complaint until returning it.

A reservations agent in Redding later told me the Avis cars there “have as high as 67,000 miles on them. [The franchisee] can’t afford to just go out and buy cars the way the big corporate locations can do.”

At Avis headquarters in New York, a spokesman acknowledged that 58,000 miles “is pretty high,” but did not suggest that any rules had been broken. The vast majority of Avis cars are circulated from 12 to 18 months, the spokesman said, but he noted that “we are having to hold onto the cars for longer periods of time than we have in the past.”

(At Hertz, a spokesperson reported that more than 90% of the company’s fleet is made up of cars less than 9 months old, and while franchised Hertz outlets often have somewhat older vehicles, they “generally” adhere to a limit of 12 months.)

The next time I need to count on a rental car from a relatively small town, I’ll probably call the outlet directly and ask a few extra questions about the local fleet.

Why, aside from seasonal demand, are we seeing these older cars? In many ways, the U.S. rental-car industry serves as an inventory-management tool of the Detroit car makers, who own all or part of most major car-rental companies. As public demand for American-made cars has increased over the last three years, many car makers have been selling fewer cars to rental firms, at higher prices. By one industry insider’s estimate, some rental-car companies are paying twice as much now for cars as they were in 1993.

Against that background, it’s not surprising that rental-car companies have been nudging prices upward--an estimated 5% over the last year, though figures can fluctuate widely by city and season--and keeping vehicles in circulation longer.

At the American Car Rental Assn. in Washington, D.C., Executive Vice President Jan Armstrong recalls that about eight years ago, most rental companies were keeping cars in circulation for about four months. Then, as the auto makers’ sales improved, that period grew, first to six months, then to nine. Now, says Armstrong, “I would say it’s a year to a year and a half.”

Rental cars usually rack up about 2,000 to 2,500 miles per month. In the vast majority of cases, Armstrong notes, major companies are still pulling cars back before they reach 20,000 miles. Thus, the car you rent still stands a good chance of being younger than the one you own.

The bottom line, no matter which company you’re using, is that demanding renters may want to take a good look at the car they’re issued before they drive off the lot. And just because a rental-car outlet carries a familiar name, doesn’t mean every outlet uses the same standards.

Reynolds travels anonymously at the newspaper’s expense, accepting no special discounts or subsidized trips. To reach him, write Travel Insider, Los Angeles Times, Times Mirror Square, Los Angeles 90053; telephone (213) 237-7845.