Intense competition has kept daily rental price rises below inflation for years and a car can now be rented for about £25 a day. The only way suppliers can keep making worthwhile profits is by getting smarter and more efficient at providing them.
To do the job, rental firms need managers who can cope with the daily toll of abuse meted out to their vehicles – and have them ready for rental again as quickly as possible or face lost business as a result.
At the heart of the process is an asset management and checking procedure that many other fleet operators could learn from.
It covers areas including vehicle wear and tear, driver responsibilities and the quality of servicing or repairs.However, to achieve optimum results each company must have an adequate reporting facility in place. Here’s how rental firms do it:
IN-DEPTH recording of a myriad of details about vehicles ensures that rental fleet managers have access to information on every vehicle at the touch of a button.
Stephen Deakin, vice- president of fleet for National Car Rental, said: ‘The key to asset control is to have a secure fleet reporting system, which will allow senior management to see where the fleet is and how it is being utilised. This monitors the vehicle rental situation and constantly updates the live system accessed by all branches and fleet control functions. By continually monitoring the fleet it is possible to direct or redirect deliveries to ensure that the fleet is kept in continual balance.’
An online database will show the rental company fleet managers what vehicles are on hire, who is renting them, the hirer’s name and the length of rental. This allows companies to monitor the fleet and communicate relevant information back to the customer.
Having the right systems in place can be a matter of survival in the daily rental market, according to Robert Burton managing director at Thrifty Car Rental.
He said: ‘Several rental companies over the years have gone out of business due to lack of controls over cars and vans used in their businesses. Either rental customers have stolen the vehicles or, in some cases, franchisees have sold vehicles.
‘At Thrifty we have systems which control the asset from the moment the vehicle is ordered to receipt of payment for the car upon sale. All vehicles are registered to our company, and are logged on to the system. Our fleet management systems control the asset by location, with data available online for us to check the position of the vehicle at any time.’
However, even if the most organised daily rental fleet has introduced a rigid reporting facility, if the drivers continue to return the vehicles in poor condition then costs and administration will rise.
WEAR AND TEAR
MINIMISING damage and keeping track of wear and tear are probably the two biggest issues daily rental companies and their fleet customers have to cope with.
If the rental company is to require payment fairly for damage from a customer, it is vital that vehicles are thoroughly checked prior to the rental agreement starting. Don Moore, vice-president of sales at Enterprise rent-a-car, said: ‘Fleets often want the convenience of delivery and collection, but it can sometimes lead to discrepancies over the state of the car when it is dropped off and when it is collected.
‘What fleets need is a way to ensure employees have a chance to check over the vehicle before the rental and agree its condition with the rental firm.’
IF a customer damages a vehicle from a rental firm, nine times out of 10 the customer will be liable for the bill. Burton said: ‘The art in the business is how to ensure the customer has proper documentation from the rental company to back up the damage claims.
‘Millions of pounds a year are lost within the industry due to inadequate controls.’
Rental companies also face the tricky question of whether a row over a £100 damage charge is worth risking a major customer contract for.
If a vehicle returns with damage to the bodywork, windscreen or wheels, a trip to the local bodyshop will be necessary.
However, getting the job done quickly and efficiently is a priority for daily rental fleets. The longer an asset is off the road, the higher the costs will climb.
Des McCann, director of UK operations at Budget Rent-a-Car, said: ‘An integral part of the ‘life’ of a rental car is the time spent servicing and carrying out any repairs.
‘Our experience shows that self-owned bodyshops often take far longer than commercially-owned bodyshops to complete a repair.
‘This obviously has a knock-on effect on utilisation so we have outside suppliers with which we have service level agreements who undertake repairs. We keep a close watch on estimated hours for repair to target the quickest return from the bodyshop. Where possible, we go for smart repairs, which are quicker.
‘Our analysis of vehicle repairs through the whole life approach is sub-divided into ‘in-life’ and ‘end-of-life’ repairs.’