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Why do the big names so dominate the rental car industry? One reason: When people are investing their safety in a used car they've never driven before, they want to be reassured of the maintenance and quality standards of a trusted national brand. These brands therefore charge a certain premium for such peace of mind. But in many markets, better deals are frequently available at hundreds of small, no-brand-name independents--away from the airports--that are regulated and consistently provide dependable vehicles.
No-names can offer cheaper rentals in part because they don't pay the heavy government fees and taxes imposed at airports. They also recognize that the public comes to them for one reason - discounts. If they don't deliver, most can't stay in business. With a little bit of knowledge, you can steer clear of the shysters and choose a money-saving auto rental for those trips when an independent firm will meet your needs--and it will do so much of the time.
"There are top-of-the-line, world-class companies and there are dogs-companies you wouldn't want your daughter, wife, or parents to be renting from, just like in any business," says Neil Abrams, founder of Abrams Consulting Group, which advises auto rental operators around the globe. "But just because it's not a household name, one can't infer it's an inferior product. Many independents have late-model, low-mileage cars."
Even now, word about these no-name agencies isn't widespread; all of them combined still handle only a small fraction of the business raked in by just one of the majors; still, during 2001, Auto Rental News reported 7,820 independent car rental locations in the United States, with 107,192 cars in service and estimated revenues of $1 billion.
Prices at some of the majors have been climbing even as post-September 11 travel declined. Hertz hiked its weekly rates by approximately 26 percent last December, and other companies such as Avis also increased rates. Not long after, the Chicago Tribune quoted an Avis spokesman as saying prices had been "irrationally low" for months. The message seemed clear: People who rent cars from the largest firms should expect to pay more.
Our own findings
We compared prices in Chicago as well as in opposite corners of the country, Fort Lauderdale and Seattle. Our Internet research focused on booking an economy car from March 7 to 13, more than a month in advance. This lead time should have helped ensure bargains at the major agencies, which use a computer pricing system known as "yield management" (altering rates automatically based on existing reservations - meaning the earlier, the cheaper).
Still, the best-known names had a hard time competing with the small independents. In Fort Lauderdale, the base price for an economy car was $244 at Hertz, $199 at Dollar, and $196 at Enterprise. But a single-location, 150-car operation called Bay Auto Rental, near the airport, charged only $134. Another independent, Sunshine Rent-A-Car, asked even less-$119. And the lowest price we found was at InterAmerican Car Rental, a larger independent with locations in several major Florida cities. InterAmerican's base rate: $104, a savings of $140 over Hertz.
The story was similar in the other cities. In Seattle, Hertz wanted $294 for its economy cars and Dollar asked $217. Enterprise was more competitive, quoting $124. But the rock-bottom prices we found were still at the small off-airport firms. Express Rent-A-Car gave rates between $99 and $119 and Ace Extra Car Discount Rentals charged just $116. The difference between Hertz and Ace Extra: $178, or more than 60 percent.
And in Chicago, Hertz, Avis, and National all quoted rates at or above $200. Two small agencies called Rent-Rite and Ace Rent-A-Car asked $129 and $139, respectively. Payless, a prominent international brand, offered $132.
What you get
The vehicles we saw during unannounced lot inspections appeared clean, well maintained, and surprisingly new. At Bay Auto Center in Fort Lauderdale, for instance, customers mostly drive 1999-2001 model-year cars, and the fleet even has 2002 editions mixed in, says owner Jeff Burruano. The average odometer reading is 15,000 to 40,000 miles.
"The market requires that independents have brand-new to one-or-two-year-old cars," says Mickey Vergillo, the owner of Seattle's Ace Extra Car Discount Rentals. "Ours have very low mileage. And we usually sell them before they reach 30,000 miles. Of course, you don't have quite the selection or the high-end cars you do with the major brands."
The owners of both Bay and Ace Extra say they take pride in offering good customer service. "We have three operators on the phones 24 hours a day, seven days a week. We just had a woman call to say she had broken a key in the car door lock," Vergillo explains. "I paid to have it fixed. It cost me $204 and it was a $230 rental. So I lost money on that one."
With small fleets, the no-names operate much closer than large companies to the edge of financial disaster. "A few bad incidents with rentals can put them out of business, or even a lawsuit. They're gone," points out Abrams, the consultant. "The smaller you are, the more protective you have to be of your assets."
For consumers, that protectiveness means a few more restrictions at the no-names. The most frequent of them is distance limitations. In an example typical (but not universal) among no-names, Bay Auto Rental allows customers to take its cars only a limited distance from Fort Lauderdale - as far south as the Florida Keys and as far north as Orlando, with 200 free miles a day. Those who go beyond these limits pay a steep price: 25: a mile. Then, of course, there's the issue of one-way rentals, which are out of the question with single-location no-names. Finally, there are plenty of horror stories about people who got stuck with lemons after they left the rental lots - which can happen to anyone who doesn't exercise a bit of caution.
Overall, though, consultant Neil Abrams believes customers are shielded against the rip-off artists. "The independents have to be licensed," he says. "It varies by state, but in general the states do regulate the car rental industry."
State regulations usually include minimum insurance requirements and statutes mandating full disclosure of restrictions on travel and mileage. The best protection: Ask about restrictions, inspect the car before leaving the lot, and read the contract carefully before signing it.
Finding the no-names
One of the best Web sites for finding a no-name is BreezeNet (bnm.com), which lists rental car firms at and around 65 major U.S. airports, including some of the small off-airport companies. BreezeNet also has car rental information for 37 smaller airports, from Burlington, Vermont, to Omaha, Nebraska, to Lihue, Hawaii. It also includes a listing of last-minute specials from big-names such as Hertz and Alamo, special pages devoted to cars in Florida, California, and Canada, as well as for college-age consumers, van and SUV rentals, and ski-area vehicles--with discounts provided. And many firms, large and small, offer discounts of up to 25 percent simply for booking through BreezeNet.
Another Web approach is TravelNow (travelnow.com). By clicking on the "drive" tab at this site, travelers can find auto rentals in more than 20 major cities, including options at many independents.
And, don't forget the Yellow Pages!