This project has been assigned to our group to give the audience more information about the car rental industry. We will show the most leading car rental companies that has been in the industry since the middle of the 1940’s. First, let's take you for a Tour. Next, we will give you the Car Rental Industry Analysis in details.

The car rental industry started in 1946 in Detroit, MI. There were two car rental companies in the industry, Hertz, and Avis. Avis was the only one car rental company located at the airport at Willow Run Airport.

Warren Avis was the first owner of the company with the same name that believed that air travel would soon be the primary mode of transportation throughout the country and the world. By 1948, operations were at most airports and by 1956 the company expanded throughout the nation. Hertz has been the leading company in the industry, competing with Avis.

During the 50’s, 60’s, and 70’s other companies entered the market like Budget, National, Alamo, and Dollar. In the 80’s and 90’s other companies came into the market such as Advantage, Thrifty, and Resort.

The car rental industry has been increasing since the middle of the 1940 decade. During this time two established companies were providing rental vehicles to customers for $10.00 per day and 10 cents per mile. The demand for car rental has been increasing at an increasing rate. The business of car rental has also introduced a number of new services such as sales, rental of other products, and premiums for other services. Below is a list of car rental services, sales and premiums:

Rental of Other Products	Premiums for Services
Rental of Snow Chains Rental of Ski Racks Rental of Baby Seats Rental of Moving Equipment Rental of Cell Phones	Premiums for Loss Damage Waiver (LDW) Premiums for Supplemental Liability Insurance Premiums for Personal Accidental Insurance. Premiums for Personal Effect Protection. Premiums for Under Age Drivers. Premiums for Additional Drivers.

Sales

Sales of Gas Options Upgraded Sales Sales of Turn Back Vehicles Sales of Vacation and Travel Packages (Airline Tickets, Car Rentals, Hotels, and Ski Resources. Sales of Advertised Coupons

The car rental Industry is no longer just a car rental business. Many companies are surviving with recently introduced services and products developed by the main car rental businesses. For example, the rental of other products has been a tremendous revenue cap for leading car rental companies like Hertz, Avis, and Budget.

Loss Damage Waiver (LDW)

Companies offer this type of service for every renter who does not have or want to use his or her own car insurance. Loss Damage waiver is similar to an insurance that relieves anybody of financial responsibility for any theft, collision or vandalism on the car rented only. Rates vary from city to city. For example, in Reno a daily rate for this waiver is $10.00 per day.

Supplemental Liability Insurance (SLI)

Supplemental Liability Insurance is another type of premium. It covers one million dollars in liability to the third party for bodily injured or property damage. A daily rate for this insurance is $9.00 per day.

Personal Accident Insurance (PAI)

Personal Accident Insurance. This premium is designed to protect the renters and the passengers in case they get into a car accident. Normally this insurance covers the renter in and outside the car. However, the passenger is only covered under this premium while he or she is inside the car. A daily rate for this service is $5.00 per day.

Personal Effects Protection (PEP)

Personal Effects Protection is an insurance premium that a renter could take when they rent a car to protect the renter’s and passenger’s luggage in case it is stolen or damaged.

Under Age Drivers Fee

Some of the car rental companies do not rent to anyone who is under 25 years old, such as Hertz and Avis. Many other car rentals do rent to people under age, but with an under age fee that is normally $20 per day.

Additional Driver Fees

Many states have restrictions on car rental companies that charge additional drivers fees. For example, in Nevada car rental companies can not charge the additional driver fee to renters. Normally this fee varies in every city. A normal additional driver fee is $20.00 per day.

As the car rental industry slowly developed other products being offered also developed. Some of the other products the industry offers are snow chains, ski racks, baby seats, moving equipment, and cell phones.

Snow Chains:

Many cities with snow during the winter make additional revenues by renting snow chains. This is normally rented for $6.00 per day.

Ski Racks:

This is another product that is very popular fort the cities that have snow and ski resorts. Car rental companies make a lot of revenues from the rental of this product. A normal rate for ski racks is $6.00 per day.

Baby Seats:

Baby seats are products that are very useful for traveling families. A rental rate for this product varies from $5-$10 per day (depending on the city).

Moving Equipment:

The travel industry has also developed other services such as renting vehicles for moving parties. Companies have also diversified into unrelated products, like moving trucks, and vans (Budget). The moving service has equipment to offer that makes moving more convenient, such as dollies, boxes, bungee cords, etc…

Rental of Cell Phones:

Almost all companies offer cell phones to their customers. A normal rate for this product is $9.00 flat fee plus $2.95 per minute.

Recent services offered in sales are the Sales of Gas Option (FPO), Upgraded Sales, Sales of Advertised Coupons, Sales of Vacation Travel Packages, and Sales of Turn Back Vehicles.

Sales of Gas Option (FPO):

Every car rental in almost all cities in almost all cities are offering fuel options. This fuel option is a good service for renters that are traveling with short length of time and have no time to refuel. The fuel option insists that renters must purchase the gas when they rent the car. Normally the price for gallon is 15 cents – 25 cents cheaper than the actual market price in the city.

Upgraded Sales:

Another good service from the car rental industry is the rental of a bigger or upgraded car. When renters walk up to the counter to book their reservations with travel agents and reservation centers they pay a higher rate. For example, a renter who books a full-size car (Taurus) with his travel agent for $41.99 a day. When the renter walks to the counter the agent offers him a sports utility vehicle for a minimum difference of $15 a day, the total actual cost is $56.99 a day. A normal rental for a sports utility booked with his travel agent is $79.99. This is a good strategy for the car rental companies, since they pay less in commission to the travel agents and offer a discounted rate to customers. In this case, the customer would save $23.00 a day for a sports utility vehicle. Upgraded sales are very popular for car rental companies.

Sales of Advertised Coupons:

Many car rental companies are offering coupons for discounted rates to other firms (credit card firms, hotels, ski resorts, and airline companies).

Sales of Vacation Travel Packages:

This is another strategic car rental service that offers discounted rates as package for vacations. This offer is in conjunction with other firms products. The package includes airline tickets, car rental rates, hotels, and ski resources. Every firm takes a percentage of this revenue from the sale of this package, and the customer also gets a huge discount.

Sales of Turn Back Vehicles:

Many car rental companies (Hertz, Avis, and Budget), advertise cars for sale to the public. Normally, the car rental industry sells cars to the public in auctions at a discounted rate. Basically, these cars are turned back from the fleet of car rental businesses and the cars are within one year old.

Revenues:

The past decade has been a positive period in the car rental industry. The car rental industry ends the decade at close to 20 billion dollars. In 1999, the industry grew to an estimated $18.3 billion. This is an 8% increase from 1998 and a 17% increase from 1997 at a basis of 15.6% (David Stepner, March 2000).

As the demand from customers increases the supply of vehicles must expand to keep up the demand, Due to this increased demand and larger fleet size, total revenue for the industry has increased as well. Larger fleets can also be attributable to the availability of vehicles, favorable incentives from car makers, and strong manufacturers buy back programs (General Motors, Ford, Chrysler). All of these factors give car rental factories strong buying power and more options. Auction prices for programmed car sales were up to 7% in 1999 when compared to 1998 figures. For the most part the market share for 1998 and 1999 figures remain constant. Hertz continues to be the over all leader in market share categorized with 23% and Avis with 20%. Below are graphs for US Car Rental Fleets and Rental Revenues:

As advancing in technology continues, businesses, and consumers are offered more value. Global Position Satellite (GPS). It offers tremendous opportunities for the car rental industry. GPS technology is a system that leads renters to their destinations. Renters can benefit from the added comfort of knowing they would never get lost. The Never Lost System serves like a map and will also give the renters the best route to the chosen destination. The system is guided by a satellite and includes:

Remote Door Unlocking:

The ability to contact a vehicle and remotely unlock its doors in case a customer locks their keys in the car.

Road Traffic and Weather Reporting:

A service that provides customers with up to the minute reports with any conditions that may impede their travel plans.

Wireless E-Mail/Fax/Internet:

A full wireless data capability providing customer direct access to their personal e-mail and internet service.

Special Event Services:

A function that provides customers with information regarding special events on a city by city basis.

Incidental Damage Capture:

Using GPS incidents can be electronically captured and automatically reported prior to a vehicle return. This function provides details on the date, time, and location of each such incident on ensuring that vehicles damages does not go unnoticed.

Overdue Vehicle Response:

Electronic vehicles can be electronically located providing car rental companies with respected details in conjunction with their daily overdue management process or on an on/off basis by a computer staff who are responding to customer waiting for an overdue reserved vehicle.

Vehicle Security in Theft Response:

GPS enables unauthorized vehicle movement to be immediately reported and acted upon by locating, tracking, and disabling any vehicle found to be at risk of theft.

Fuel Revenue Management:

Fuels levels are automatically reported upon each vehicle return, providing accrue details for refueling charges and improving efficiencies in the vehicle check-in process.

Rapid Return:

This Rapid Return program allows car rental companies to check in cars when they return. The system is controlled by remote access to the car parking lot with only a hand-held set control. It offers convenience to renters since they do not have to stop at the counter.

The car rental industry uses many ways to advertise their products and services. One of the main channels of advertising is magazines, such as Auto Rental News, Automatic Fleet, Fortune Magazine, Business Week, etc... A second channel of advertising is through media like TV commercials. There are a few car companies that are not well known due to the lack of advertising skills. The third way of advertising is through radio stations. Normally, this is a less attractive way for the car rental industry. A new recent channel is the Internet, which has given a huge incremental revenue since companies are using less expenses in labor and the customers have control of what they want.

Many of the top car rental companies link their web sites to travel partners such as major airlines, hotels, credit card companies, travel agencies, and other corporate partners.

Rates for car rental companies vary from one city to another and from company to company. One strategy is called "Corporate". Corporate is a discount account that car rental companies offer to firms. Employees from these firms enjoy a flat rate nation wide. There are a few others corporate discounts that unemployed individuals can benefit from. Some examples are Triple A (AAA), and American Association of Retired Persons (AARP). These discounts usually offers a 10%-25% discount on rates. Customers just need to mention that they have this kind of discount. Some of the car rental companies have clubs that offers speedy rentals, discounts, and special offers to their member.

The car rental industry has been developing tremendously since the first rental company in 1946. There are no signs of the industry starting to decline, but new innovating techniques are being developed for the new millennium.

Auto Rental News (David Stepner, April 2000)
Pages 1-70

Auto Rental News (David Stepner, January 2000)
Pages 1-25

Automotive Fleet (Car and Truck Management, January 2000)
Pages 1-25

Avis Employee Handbook (Avis Company, 1999)
Pages 1-3

Budget Employee Handbook (Budget Company, 1999)
Pages 3-5

www.budget.com (About Budget, Fleet)

www.avis.com (About Avis, Reservations)

www.hertz.com (About Hertz, Rates)

www.alamo.com (About Alamo, Reservations)

www.dollar.com (About Dollar, Rates)

www.nationalcar.com (About National, Reservations)