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PDF Editor FAQ

Why is Dollar's car rental much cheaper than other car rental companies like Hertz? What is the key to lowering the cost in the car rental business?

The short answer:-Run older cars in your fleet-Hire fewer staff (yes, you'll have longer lines at the counter)-Run less-frequent airport shuttles-Keep your facility less flashy-and the big one: Push your staff to sell harder--much harder.The rest of the story:It's easier to answer this now that Hertz owns Dollar. (Hertz bought Dollar Thrifty Automotive Group last year and now owns both the Dollar and Thrifty brands.)I'm only being somewhat tongue-in-cheek when I say this, but Dollar is Hertz's new dumping ground for their older, heavily-used cars. Rent a car with Hertz and it's more likely (though of course not guaranteed) to be pretty new--under 25,000 miles and within the last model year. Rent with Dollar these days, and there's a not-insignificant chance you'll get a two-year-old model with 55,000 miles (and a corresponding amount of wear and tear).It didn't used to be this way, but in my experience and that of my clients, the company certainly seems to be trending in this direction. Prior to Hertz's takeover, Dollar still ran a lower cost operation than Hertz. They didn't have all kinds of extras like Hertz does, such as the ability to reserve specific high-performance models (Adrenaline Collection, Fun Collection, etc.), programs that give free upgrades and other bonuses, to frequent renters, a lower staff-to-customer ratio (resulting in longer lines), better-organized administration and management, less flashy installations (in many cases, in lower-cost buildings offsite rather than in-terminal at the airport) and less advertising, etc.That all said, there really isn't a *huge* cost difference between operating a top-tier brand like Hertz (or Avis or National, their chief competition) and a mid-tier brand (like Dollar, or Thrifty or Alamo or Budget, etc.). The biggest reason Hertz is more expensive than Dollar is because it can be. Their offering is tailored more towards price-insensitive business travelers who value time over money. In exchange for a higher rate (although often significantly discounted with corporate discount agreements), they promise (and usually, though less often these days, deliver) a hassle-free experience, especially for members of their (free, so definitely always sign up!) frequent renter program, Hertz Gold Plus Rewards, where you can simply walk directly to your pre-assigned parking stall (you can find your stall via text message or from an electronic sign in the garage) and drive out through the exit gate in mere seconds. To meet that expectation, Hertz is less aggressive about overselling than the lower-tier agencies. For those who (unfathomably) aren't Gold Plus Rewards members, they also don't pressure their salespeople as much to sell insurance and upgrades and other ancillary extras that are very profitable, although there is still a push to do so, and agents are commissioned. But the cost to do that isn't terribly high, so it's mostly a brand-positioning thing: pay our high rates and enjoy your smooth experience!Dollar, on the other hand, is much more aggressive about running a fleet with high utilization, pushing their salespeople hard to sell extras, and doesn't focus on making the experience nearly as hassle-free for business travelers. They aim for the leisure traveler (or cost-conscious small-business owner) and thus compete on price, so their rates tend to be much lower. They're really taking the same product as Hertz and simply not marking it up as much.One industry analyst I knew pegged the hard cost for a rental company to rent a car at about $15 per day, assuming 85% fleet utilization. Just guessing, but if $15 per day is what it takes Dollar to break even, I'd say $17 per day is what it takes Hertz, maybe $20/day if you account for their less-efficient administration (Dollar Thrifty under Scott Thompson did a phenomenal job of maximizing their organization's efficiency). Certainly not a huge difference and not one that would explain why Dollar might rent a car for $30 and Hertz will rent the same car for $50!Personally, for me, unless you're comparing benefits and the experience of the frequent renter programs (and in that vein, National's Emerald Club clearly reigns supreme over all others in the industry), the experience you get in a given rental transaction has far more to do with the specific location, the local management, the specific employee helping you, and even that employee's mood (and your mood!) more than anything else--certainly more than the name on the sign behind the rental counter.

Question That Contains Assumptions: Why does it take so long to rent a car?

Here's the lowdown:Book with Hertz, Avis or National and through their Frequent Renter Programs and you skip the counter entirely at any of the major airports. Even if not at an airport location, typically you're on your way in 5 minutes or less when you're in the program which is free to join at all 3.Book with Budget using their FastBreak program or Alamo's Insiders program and it's usually way faster than normal since they have all your info, but not quite as seamless as Hertz, Avis, National.Enterprise Plus, Dollar Express, Thrift Blue Chip, etc. all help to a certain degree but are generally less of a timesaver than the ones above. You can also check-in online with a number of companies which also saves time, but again, you still need to stop at the counter, and the experience is not nearly as seamless as the "Big 3".There's one more thing to keep in mind. Stopping at the rental counter gives these companies the opportunity to sell you on the benefits of taking their insurance, offer an upgrade, prepaid gas, GPS, etc. Put simply, while you view the counter time as an inconvenience, they car rental companies view it as quality time with you to sell you on the enhanced experience you will enjoy by paying them more. This is a calculated strategy designed to enhance their bottom line.Hope this helps to explain things. Now go sign up for Hertz Gold, Avis Preferred, and National Emerald Club and avoid the hassle (and the rental counter) going forward.

How could a person get a free upgrade on a rental vehicle?

The easiest thing to do is “just ask”.Most car upgrades have worse gas mileage, and so they are happy to get rid of them, because no one wants to pay for the extra gas.You can also look and see if the lot is mostly empty, and if some other type of car is overrepresented compared to the car you book, offer to take the other type of car for the same price to free up the car type you booked for another customer, since it seems to be in demand.Reserving the cheapest rental, and picking up during peak hours will typically get you an overbooked model; you won’t even need to ask, they’ll be offering it to everyone.Rent at the airport rental lot; you are guaranteed that they will have the newer models distributed there first, which means an “upgrade” to a different (new) model in the same class.Ask if they have any specials.Join a “frequent renters club”; you can get free upgrades that way; this gets you an agency brand credit card. Some programs are “Avis Preferred Plus Perks”, and “National Emerald Card Express”, and “Sixt Platinum Perks”. National guarantees the upgrade.Book with a World Elite MasterCard; “elite” status at Enterprise, Alamo, and Budget, will usually get you a free upgrade to the next class.If you have an Amex Platinum card, you get free “elite” status at Avis, Hertz, and National, if you use the card (Hertz requires the code “CDP#211762″ when making the reservation; this is listed in your cardholder agreement paperwork).Your United Mileage Presidential Plus Club membership card gets serious benefits at Hertz (you can no longer apply for this card directly).

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