■ Are there any issues you think the industry needs to address?
Yocum: Details. Be very specific about your business and defining your business model. Brag about your successes and be honest about shortcomings. The most successful rental operators are investing more of their time in ensuring that every aspect of their business is in check - right down to income statements and balance sheets. A properly aligned fleet combined with detailed financial statements tends to afford rental operators with more lending opportunities.
O'Dell: Credit and fleet availability. Many banks and financing companies have pulled back on the amount of money that they are willing to loan in this business segment or have stopped lending to these dealers altogether, closing or locking down lines of credit that were once available for the dealer during the buying seasons. DSC has streamlined its credit process for the RAC operator to accelerate the approval process during these seasons, and has maintained relationships with fleet companies like Eckhaus to allow our RAC operators access to as many buying opportunities as possible.
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Hankey: Operators still get incentive money direct from the manufacturer and this allows them to finance over cost and put the lender upside down (negative equity). This is a big risk in the rental industry. There is no way to stop this, and this is where the banks take big hits.
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Opferman: Risk versus program. With repurchase cars having longer hold periods and higher cost, most operators need to run a high percentage of risk cars. Incentives on cars have greatly diminished, so the need to buy more cars to get to the next incentive level is all but gone. Holding cars longer makes fleeting for peak seasons harder so lower fleet at peak season is also impacted by the risk versus program.
Since deep discounts on cars have been reduced significantly, the little guy has a more even playing field with the large corporations who bought volume in the past and got the highest discounts.
Fewer program cars, longer holds, and fewer lease cars all contribute to fewer cars at the auction which has made the prices very strong, which supports the risk car move and provides not only a profit with higher rates as a result of fewer cars in the total fleet, but profits when the cars are sold.
Tim Yopp is chief technology officer of Eckhaus Fleet LLC, one of the largest independent fleet suppliers representing Hyundai, Suzuki, Toyota and other manufacturers to the corporate fleet and rental car industries. He can be reached at tim@eckhausfleet.com.
Mark Eckhaus is CEO of Eckhaus Fleet LLC and a principal in several new car dealerships. He can be reached at meckhaus@aol.com.
Jack Goode is fleet manager at Eckhaus Fleet LLC. He can be reached at jack@eckhausfleet.com.