This should tell you that car hire is a pretty lucrative business for all involved; there are handsome commissions paid to anyone promoting their services – after all, the car hire people have expenses that are pretty fixed – often cars are leased for a set period, and customers take car of the fuel. Any damage to the car can be billed direct to the customer.
There is also significant competition; and many car companies are seen as being ‘equal’. There is quite a difference in getting a flight from British Airways or Easyjet, even if they go to the same destination, however, a customer won’t see much of a difference in getting a car, from say Hertz or Avis.
This can lead to good competition in prices; but also there is an element of large price inelasticity; expect car hire prices to be very high in times of good demand and cheaper elsewhere. The reason being of course, that the car is often the customers only choice of transport; particularly if they have a family, or the airport does not offer the correct public transport.
Here are our tips to save you money when using the car-hire companies:
1) Never pay the rack rate: The rack rate being the price charged to someone who just walks up to the counter and hires the car there and then. It’s fairly likely that promotions (0ften decided by head office) will not apply in these cases and you will be charged the set fee, almost like someone walking into a hotel on the day they want your room. You may get lucky but the laws of supply and demand will not be on your side.
2) Book in advance: Tied into the first point. Some car hire companies may have a slim selection of cars, or not many of one type. If you need a particular type of car, ie. Manual or Automatic transmission, you may find it saves a lot of hassle to book online rather than to get to the airport and pay more for less. At larger airports such as Stansted, this is unlikely to be a problem but at smaller airports there will be less cars allocated.
3) Shop around: It may be easier and handier to pay for your car hire with your flight but it’s not really saving money: there is little incentive for a site to pass on savings (especially the really good deals) and it is not that much harder to have a quick scan around for your requirements. Neither is it any safer; if flight is cancelled for say, volcanic ash, your car hire booking will still stand. Travel insurance will cover you irrespective of the methods of booking (subject to the policy).
4) Consider your needs: There may be cheaper car hire firms not located at the airport, who will nevertheless meet you at the airport with the car. Larger car hire firms have greater flexibility, allowing a car to be dropped off at a different location from the pick-up point; ideal for those on more flexible schedules. If transport to the city is easy and cheap, it may be worthwhile checking out other options. Don’t necessarily think that driving a car is more convienient. For example, if you are visiting Brighton on a day trip from London, it is quicker, easier and cheaper to take the train as opposed to the car.
5) Calculate your costs: The obvious one, really but much overlooked. Some people hire a car when they don’t really need to, and with fuel being so expensive nowadays, your holiday won’t necessarily be curtailed. Do make a quick calculation on not only the basic hire cost but also the petrol and also other fees such as car parking at hotel. I can accept that in many cases it really pays to have a car – particularly if you have a long way to drive. Some friends hired a car for a week in Spain to make the same journey to the beach everyday – a taxi would have worked out considerably cheaper considering the trips made.
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