Rider on the Storm

Avis Budget takes a $1 billion hit and Enterprise lays off 200 employees in the same quarter. Costs are up, yet rates are flat. (See our new “Market Data Snapshot” section) The wholesale market is moribund—a foreclosed family might take you up on that used SUV to live in; otherwise they’re not moving. It’s going to be a cold winter in Florida.

No, it’s not pretty out there.

Change is blowing in the wind like a bad folk song. But it’s not just a political slogan—troubled economic times will make people rethink the way they go about doing business.

In times like these, then, it might actually be good to be an independent. How, you ask?



  • You’re not tied to heavy commercial paper like the big guys and you’re not worried about a lower debt rating. Your cost of funds may have gone up a point, but your credit lines have not been cut. The banks have funded you on your business reputation, not a brand name. You (and your bank) have always played it conservative, a good thing now. The ties to your community are strong.



  • You’re not taking your marching orders from someone in a head office 500 miles away who may not have the best interests of your local operation in mind.



  • You can tighten your inventory and de-fleet much more easily than the big guys. It’s true, no one is buying. But dumping 10 units is a lot easier than 1,000. And you can get away with holding your vehicles a little longer through the trough—you’ve always run higher mileage units than the big guys anyway.



  • If you’re buying cars and not leasing them, you’re not suffering through the captive’s pullback on lease deals. If you buy low-mileage units at auction, there are deals to be had when you’re ready for them.



  • You’re not tied to agreements with manufacturers having trouble keeping the lights on.



  • If you’re dealing with credit-strapped customers, it’s easier for you to relax corporate policy and come up with an alternative with the customer face to face. You do a higher percentage of repeat business, so chances are they’re already in your system. Or you may have GPS tracking units installed.



  • If you’re in a neighborhood location, the drop in leisure rentals and air travel hasn’t hit you so severely. People are finally starting to wake up about excessive airport fees and are looking elsewhere to rent when they can.



  • If you’ve been aggressive in replacement rentals, you may be finding that some body shops are now more receptive to your services.



  • Your rentals were never a commodity based solely on rate. You offer a good deal and a positive rental experience based on a continuing relationship. In tough economic times, this is golden. Your local clientele appreciates the familiar face behind the counter.



  • If you’re a niche renter, business is stable. The van specialists say that churches and universities are still renting for retreats and sporting events. Vans don’t have the stigma of the high-mileage passenger car, so van operators say they can hold them through the soft market. The guys that do luxury rentals exclusively say business is off only about 15 percent, which is in line with the economy. The truck guys have seen a drop in construction and moving rentals, though the smart ones are going after steady business such as linen, floral and bakery deliveries.


There may be some sunshine peeking through the clouds: Hertz and Enterprise announced rate increases. Gas prices have plummeted. We may have seen the bottom of the used car market. The song, more appropriately, might be “Riders on the Storm.” If you’ve made it this far, you’re a survivor. You’ll ride this storm.


Chris Brown is executive editor of Auto Rental News. He can be reached at chris.brown@bobit.com.


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