According to the New York Times, the global recession is sending prices plummeting on airfares, hotels and cruises, but moreover it is having the opposite effect on rental cars.
Take for example this data, from earlier this year in May, where the average rate for a weekly hire car, if booked in advance was $345.99 up approximately 73% compared to the $199.65 for the same month of the previous year. Data Collected by the ABRAMS CONSULTING GROUP, which tracks rental rates.
There is a lot of sticker shock, said Neil Abrams, president of the consulting group. People do not understand. The economy is caving around them, he said, adding, so how is it possible that rates are as high as they are for car rentals?
The basic reason for the increase in price on rentals is relatively simple. Supply and Demand. Although the actual demand for car rentals are down, Rental agencies are cutting their fleets by huge amounts, by doing this they are creating the shortage and ‘jacking’ up the price for the consumer.
The companies method of trimming their fleets is accomplished by selling cars into the already large used car market and flatly refusing to buy new models. Of course people will worry about getting a ‘clunker’ but it is not unusual to see a rental car with 30,000 miles on the clock.
With the current climate of booking a hotel room early to save money, and the same applying to airplane flights, unfortunately this will not work with car rentals.
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