Fleet News

More rises in daily rental charges on cards

FLEETS face a profound shake-up in the way they buy car hire, as daily rental companies move to levy separate charges for every value added service they offer. Hire operators have already set a precedent by imposing an individually identified charge of around 95p per day to cover the cost of the new £25 vehicle registration fee.

This principle is now being extended to cover other areas of car hire, including daily mileage caps and charges for collection and delivery, as the industry bids to return to profitability in the face of rising fleet holding costs and declining residual values. Don Strathdee, chairman of the British Vehicle Rental & Leasing Association's rental committee, said hire companies could not afford to continue offering unlimited mileage on rental cars with depreciation rates on upper medium models having risen to 7.5p per mile.

This has become an even more pressing problem in current trading conditions, with companies looking to keep vehicles for longer. And without signs of an improvement in nearly-new trade values, Strathdee forecast further increases in the cost of car and van rental before the year end.

This may see base daily rates remain constant, but fleets paying more for value added services, according to John Leigh, managing director of National Car Rental, who said menu pricing was very much on the agenda for the industry. 'Delivery and collection is a very expensive component, and I am lobbying for us to show it as a separate item so customers fully understand it as a separate expense. If they want to mitigate it as a cost they could do so by doing without it,' he said.

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