Fleets are being warned that short-term rental rates are increasing.

Avis will increase its charges within weeks with other rental companies expected to follow suit.

“Avis has increased rental prices by 10% for rentals during and post the Easter period this year,” confirmed a spokesman.

“The aim of this rise is to defend the business from the tough economic pressures currently being experienced and to lead the industry in the opportunity to change, following seven years without rate increases.”

Now Avis has put its heads above the parapet, it is expected others will follow suit.

“We would anticipate that our competitors follow this lead,” said the Avis spokesman.

Europcar has confirmed its rates will rise, although it would not say by how much.

Hertz announced its rates would go up by 10% in October 2008.

However, this increase affected its retail rates only, with all its negotiated contract rates remaining unaffected.

It is expected it will now increase its corporate rates will increase, although the company refused to confirm this.

Thrifty has already begun to increase prices.

“More realistic rental will have to be forced through, said managing director Roger Hancock.

“Rental rates will have to rise.”

Sixt managing director Ian Lawrence told Fleet News: “Rates will need to go up,” indicating that these increases would be a minimum of 5%.

Enterprise refused to comment on its plans to raise prices.

The rental industry is faced with “significant fleet cost increases, which is in turn impacting rental rates,” said Lorraine Farnon UK sales director, Europcar.

“However, whilst rates must go up, we are working closely with our customers to mitigate these costs as much as possible.

“It is difficult to say how much rates will go up by, this is dependent on the client-specific profile and mix of business and whether there is any behavioural change.

Tough times lie ahead, that’s certain.”

The BVRLA, which represents the daily rental as well as leasing industry, agreed that it is a dismal outlook.

“The daily rental sector is faced with rising prices for new vehicles and increased depreciation through lower resale values,” explained John Lewis, BVRLA chief executive.

“And commercial funding rates are continuing to rise, particularly for motor finance.

"Finally, our members are seeing no let-up in the financial burden imposed by new regulation.

“We are not surprised that the industry is no longer able to continue to absorb all of these costs and may not be able to maintain current pricing levels.”