Nine Ways Fewer Cars Affect U.K., European Renters

<H1>Nine Ways Fewer Cars Affect U.K., European Renters</H1><H3>By Amon Cohen</H3>Car rental rates are escalating in Europe, particularly in the United Kingdom.

In continental Europe, the problem is less acute. To some extent, that is because striking corporate deals with rental companies is far less common than in the United Kingdom. In the rest of Europe, business travelers are more likely to rent a car on their own and submit the bill with their expense report.

Nor have there been the same difficulties with car manufacturers. "The same circumstances do not prevail on the continent in terms of oversupply," said Alun Cathcart, chairman and chief executive of Avis Europe.

Elly Sterk, vice chairman of the Dutch Association of Travel Managers in Industry and Commerce, said she had not seen any rise in prices, while Luxembourg Association of Business Travel secretary Rene Friederici said he had just negotiated rates for next year that were exactly the same as last year. Trade sources in Germany said there had been no noticeable increases there either.

Nevertheless, Robin Davies, Hertz Europe vice president for strategic planning, maintained that prices had gone up in Europe, although not as steeply as in the United Kingdom. U.K. customers are paying about 15 percent more per year, compared to 10 percent in the rest of Europe, according to Davies.

Whatever the true picture in the rest of Europe, it does not make matters any better for the United Kingdom, which is suffering nine adverse effects from the restriction of cars in the rental market.

1. Price rises. In spite of the rise in rental costs, car rental companies claim clients are still receiving a good deal because prices had been falling in real terms for 10 years. "We didn't put up our prices at all for years, which was a mistake," said Freddie Aldous, chairman of EuroDollar International and of the European Car and Truck Rental Association.

2. Shortage of vehicles "If things carry on the way they are for the next couple of years, it is a distinct possibility there will not be enough cars to go round," said Avis' Cathcart.

Neil McCrossan, EuroDollar's U.K. sales director, claims this is already happening with some competitors, although clients with corporate contracts are far less likely to suffer than one-time renters. Some industry insiders suggest that the shortages are actually restraining rental companies from seeking new business.

There also are fewer cars available on Wednesdays and Thursdays, the industry's two peak days, so renting on these days is becoming particularly tough.

Moral: If your company does not have a corporate rental deal, get one now.

3. Airport supplements. Owing to the United Kingdom being perhaps the most competitive market in the world, car rental companies have historically not charged supplements at U.K. airport locations. This is despite the fact that they pay steep rentals to the airports, have to finance courtesy buses and have longer operating hours than non-airport locations.

All that has changed in the past six months, and most rental firms now charge a 10 percent supplement, bringing the United Kingdom in line with the rest of Europe and the United States.

4. Delivery and collection charges. "These are now the norm rather than the exception," McCrossan said. The average home delivery charge is about 10.

5. Peak pricing. Although peak pricing is not yet a reality in the United Kingdom, the idea is being examined. "Logic would dictate that on a Wednesday or Thursday, when we are busier, we should charge more," McCrossan said.

6. Mileage caps. These are starting to appear in Europe, particularly on long-term rentals (more than 28 days). Davies said Hertz had introduced a cap of 300 kilometers a day in France. "It is quite a generous cap and won't affect most customers," he said.

7. Multiple suppliers. Rental companies are telling their larger customers that they would be wise to find more than one supplier to forestall potential fleet shortages. Hertz is issuing this advice to accounts with an annual spend in excess of 500,000. But McCrossan advises leaving the work to one supplier who can buy cars from rival companies if necessary but will continue to coordinate invoicing and management information.

8. Short-rental premiums. In the past, renters paid the same daily rate for a period of anywhere between one and six days. Under the new austerity, they have to pay for the higher administrative costs of short-term rentals. Most companies now charge more per day for a one- or two-day rental than for a three- to six-day rental.

9. Old cars. For anyone who believes you are what you drive, get ready to feel a lot older and more worn out. Business travelers are driving cars that are closer to 12 months than six months old, and with up to 10,000 or even more miles on the clock.