THIS summer, with gas prices less than half what they were last summer, there’s never been a better time to roll up to the rental counter and take out a car for the weekend. Or so you thought.
Reserve your ride and you may notice what seems to be a precipitous rise in the daily price of a car rental (last year at this time, it seemed the rental companies couldn’t give them away).
It’s not just the price of the car that’s high.
Depending on where you pick it up, you’ll find additional new fees where you didn’t expect them (for keeping the car longer, adding a driver) and sky-high taxes that often go to subsidizing a convention or buying a city’s new baseball stadium.
Suddenly, what you thought was a value proposition is, well, not.
In fact, tally up the new, higher prices and it may be cheaper to fly this summer — or at least fly to your rental car.
To wit: A roundtrip ticket for two from JFK to Boston for June 25, returning on Sunday, June 28, totals up to $318, including taxes.
Renting a standard car in Manhattan for the same time period cost in excess of $500.
You can get two business-class seats on the Acela Express from Penn Station to South Station for nearly $200 less than the cost of renting a car that same weekend.
What’s at issue here?
According to Bob Barton, president of the American Car Rental Association, the rising prices are nothing more than normalization.
“You can still rent a car today for the rate you did 20 years ago in some places, while the price of a hotel room has been steadily rising,” Barton points out.
In other words, don’t look for a break any time soon.
AS GOES THE AUTO INDUSTRY . . .
The freewheeling relationship rental-car companies once had with the car manufacturers is gone, too.
“As recently as five years ago,” Barton says, “you could get a car from the manufacturer, drive it for six months and return it. Our cost for the car might be $300 a month from the manufacturer, so in simplistic terms, the total cost would have been $1,800.
“Add to that the incentive check for $500 we would have gotten from Detroit, and our costs were already covered for half the month. If we rented it to you for $25 a day, well, you do the math.”
Sweetheart deals are a thing of the past. So there’s your first blow to low prices.
Add in the commissions that rental-car companies pay online agencies, plus rising airport taxes, rent, payroll, busing and vehicle maintenance . . . voila, your new, higher bill.
Oh, and don’t forget — that unlimited mileage you now mostly take for granted? That’s not free. (Back in the old days, you generally paid for every mile you drove.)
If the car you rented looks more worn than usual, well, blame the credit markets.
Rental-car companies, says Barton, are now in the same boat as everyone else: Credit simply doesn’t exist, meaning that those who wanted to buy new cars were not able to. The number of cars on order in February, he says, added up to one-tenth of those bought one year ago.
THE TOURIST TAX
You may think that your per-day charge has gone higher (and it has — we recently paid about $50 per day to rent a mid-size car in Columbus, Ohio), but that’s not the worst of it.
Once you’re finished paying your rental agency, keep your wallet out for the city.
As nearly all do with hotel stays, municipalities regularly levy taxes on rented cars to cover new convention centers, road construction, even stadiums.
For example, with the help of a 3.25-percent surtax on rental charges, the Arizona Cardinals are now playing in a new stadium, which increased the team’s value over $102 million in 2008.
Benefit to renters or the car companies? Zero.
MORE FEES COMING
At a time when the industry is struggling, there’s a push to bring the car rental booking process more in line with that of the airline and hotel industries.
For instance, making a rental reservation that you don’t show up for may now cost you.
Want to keep your car longer without notifying the company? Your rental rate may change considerably.
These fees that aren’t born from a desire to penalize the customer, Barton says, but to manage inventory better. Companies now average a no show rate of 30 percent.
Consider that the company is on the hook for the $3 per reservation it pays the online travel agency for your booking, and you’re talking $2 million in fees out of a fleet of 250,000.
That’s not exactly chump change.
DRIVE HAPPY
With higher base prices and plenty of non-optional extras, renting a car without breaking the bank requires more savvy than ever.
* RESEARCH THE MARKET Most online travel companies now break out the base price of a car from the taxes for you on their sites. Look for differences in regions. For example: The city of Phoenix levies more than 13 percent of your total bill, a whopping add-on that includes various surcharges, not to mention up to 9.3 percent retail sales tax. Tucson, on the other hand, charges $3.50 plus 8.1 percent sales tax.
* GAUGE YOUR INSURANCE NEEDS Collision-damage waiver insurance is often more insurance than you need. You likely already have CDW through your credit-card company; call your provider to see if you’re covered. Coverage can be as high as the base price of the car.
* GO OFF-AIRPORT License fees, concession fees, security fees, and energy surcharges all refer to the money the rental company pays to the airport (and therefore you pay to the company) for rent, busing, and a host of other services that should be included in the base price. In some cases, even taking a cab into the city or farther off airport grounds will defray costs.
* OPT OUT WHERE POSSIBLE Car companies may charge more (up to $20 per day) for an additional driver, even though most waive the fee for a spouse. Have a roadside assistance program of your own? Make sure you don’t pay for another.
* LOOK FOR PROMOTIONS Alamo is offering 10 percent off the daily rate on some rentals, Budget will slash rates by up to 40 percent, and Enterprise gives 15 percent off in some cases. You won’t find news of these promotions on the big online travel agencies; go to the car-rental sites themselves.