Fleet News

BVRLA: Hire rates must rise or we'll go out of business

FLEETS face stiff increases in car hire rates and some rental companies could shut as the daily rental industry struggles against a tide of adverse economic pressures. The situation is so serious that the British Vehicle Rental and Leasing Association has warned that the combination of rising interest rates, increased wage costs, weakening residual values and the new £25 first registration fee threaten to drive a number of rental companies out of business.

Don Strathdee, chairman of the BVRLA Rental Committee and managing director of Mersey Hire, said: 'Our customers have grown accustomed to the most competitive rental rates in Europe, but very few people understand the true costs involved. We simply cannot go on absorbing more and more in the way of costs, charges and taxes, without increasing rates.'

The £25 registration fee is just the latest burden placed on rental companies, a cost which they must offset over the relatively short six-month holding period of rental cars. 'Daily rental companies are not in a position to accept yet another financial burden and will inevitably have to pass this unfair government tax directly to the customer in the form of a surcharge, likely to be in the region of 35p per day, added to rental invoices,' said Strathdee.

'The prices the whole industry has been charging have been uneconomically low, and when rate negotiations come around, one can expect to see reasonable sized increases introduced.'

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