Falling into Higher Car Rental Rates

Get ready for pricier car rentals this fall. Last week industry leader Hertz raised its daily rate by $3 per day and $20 per week. Budget, Avis and others soon followed suit. It was the second round of hikes this year; the first was in March.

Stewart Brown, vice president of revenue management for Dollar, which raised its rates somewhat less than Hertz, said demand for cars in business locations in the East “is far, far stronger than we expected”--and that pushes rates up for everyone.

Also, high used-car prices are encouraging rental companies to sell rather than lease their cars, which lowers supplies. As evidence, Brown noted that all except two firms were out of cars for the day in Dallas and San Francisco when he checked a computerized reservations system last Tuesday.

Still, rates overall are only “fractionally higher” than in March because of price drops during the summer, Brown said. And it can still be a buyer’s market for renters who shop the smaller firms, which keep rates lower, said Laurie Berger, editor of Consumer Reports Travel Letter. She called the majors’ $3 hike “an insult to the consumer,” given the insurance and other fees tacked onto car rentals.