Sometimes you can find some extremly low daily rental prices ie. €5/day at Malaga Airport or €12/day at Dublin Airport. How can the rental companies make a profit on that? Have you ever thinked about it? OK. Here is the thing, they don’t make any money on it.
They make profit “selling” fuel and expensive insurance policies. Recently I’ve booked a Nissan Micra from Budget at Dublin Airport for €12 a day. The guy at the desk offered SCDW for €15/day, GPS for €17/day and prepaid fuel option.
I refused to buy all of them because I had my own excess reimbursement insurance from Worldwide Insure, I knew my way pretty much and I like to pay for petrol at the petrol station. However there were two other customer at the desk at the same time with me. The Italian group payed for the SCDW to reduce the €1200 deposit what they couldn’t pay. And the couple with a baby who also payed for the SCDW €15/day and also for a child seat which cost €50/rental for them. The reason why I get this really cheap daily price because they bought the extras at the desk. Budget brought in clients with low prices and sell them expensive extras at the desk.
Patrick Collinson from The Guardian also travelled to Ireland and had a similar experience with his rental.
“For a four-day trip to Ireland later this month, my rental car – a four-door Ford Fiesta – will cost me £56. That’s £14 a day. I have followed all the steps in our guide to car hire, and my guess is that the firm, one of the big companies, will not make a penny. It will probably make a loss. I should be pleased with myself. In truth, the only reason I’m driving away with a bargain is that other holidaymakers are, quite frankly, being conned.
The car hire business is in a cul-de-sac of its own making. We all remember how Dixons never made much money selling electronics, but from pushing pricey warranties instead. We all know the banks never made money selling personal loans at 6% interest, but from strong-arming buyers into taking out payment protection insurance, which (for a while) made gigantic profits.
And I think we all know that running a business renting out new cars for £14 a day from a costly airport location is not going to make you any money. What is also certain is, that when I arrive in Dublin, I will be subjected to the usual amateur dramatics at the car hire counter.
You can read the full story here >>
There are good deal car hire offers available in most location. You have to prepair to keep it low when you arrive at the desk. If you want peace of mind you can buy independent excess insurance daily or annual policy. (Please read the reviews of the most popular excess covers on the market)
These policies can save you £10-15/day on extra insurance. Bring your own GPS and child seat if possible will also reduce the final price. Car rental should be simple and easy. But it is not it’s more like low cost flight ticket these days. Any extra service can cost a lot.
Source: http://www.guardian.co.uk/money/blog/2012/jun/15/car-hire-too-cheap?newsfeed=true
