Car Rental Q&A: What Criteria Should I Know if Deals on New Cars Are Right For Me?

Q: Lately my local dealers have been coming to me with some good deals on new cars. What criteria should I use to know if these deals are right for me?

Jack Vercollone — vice president, Sixt Rent A Car, Boston

A: Those good local deals can and should be taken advantage of, but only if you have a flexible fleet plan and keep certain criteria in mind.

The first order of business is to understand your fleet plan, and to make it flexible enough to fleet up opportunistically.

This means completing your fleet planning in conjunction with your annual profit plan and forecast. However, because rental demand, fleet needs and the resale market are continuously changing, you should review your plan every 30 days to ensure adjustments are being made and appropriate actions are taken, such as spot buys and de-fleeting as the market dictates.

MMR (Manheim Market Report) and Black Book are important benchmarks for past market performance, and both assist in projecting the models that could be your best fleet buy. However, the data is still historical.

Always having a good fleet mix by model — and more importantly, by manufacturer — will ensure that you’re not too heavy in any one car type. This will lessen the chances of getting burned if the market gets unusually soft on a particular car type or manufacturer.

When you buy outside of your original plan, it helps to have a diversity of remarketing channels when it comes time to sell. Develop and strengthen relationships with local and regional auto dealers, wholesalers, auctions and credit unions. These channels provide a diverse pipeline for not only selling your fleet but also will open up new possibilities to acquire fleet.

Depending on your rental market and your percentage of business versus vacation customers, the selection of cars and the rate that will support your fleet mix may differ from other rental markets. Therefore, each rental operator must challenge the “standard” fleet model.

CONTINUED:  Car Rental Q&A: What Criteria Should I Know if Deals on New Cars Are Right For Me?
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