11 June 2018

Our insider's view to Car Hire - 2018

Find out what's happening in the world of car hire at present - better regulation, the latest sharp practices and how this is all impacting the car hire market.

2018 has seen some major changes in the car hire industry and it's fair to say that some of these are feeding through, both positively and negatively, to those looking to rent a car this summer. As our companies are involved in both car hire and car hire insurance, our Managing Director Mark Bower is in a unique position to offer a wide ranging opinion on the state of the market at present.

The Competition and Markets Authority (CMA) Investigation

Background - For the last two years the CMA has been investigating the Car Hire Market - it commenced with a review into the big UK rental firms and then expanded Europewide and incorporated brokers. The CMA has now closed its investigation and has moved onto new pastures.

The good news for UK hirers is that now, when you run a quote on a website designed for UK users, you should find that all unavoidable fees are included in the headline price quoted. These would include:

• Younger or Older driver fees
• Fees for picking up the car outside normal office hours
• Fuel Service Charges
• One Way Fees

The slight downside though is that, because of the complexity of quoting all inclusive rates, we see some car hire brokers stopping serving, say, drivers where these fees apply, thus reducing customer choice.

Also some sites based outside the UK are not applying the rules - although they are being used by UK customers. The CMA say that any website has to comply if they sell to UK users, but that is more easily said than done.

We understand the pain here - having spent months focusing on the changes required on our own in-house car hire broker Clarify Car Hire to meet the regulations - especially as we look to serve every customer - young or old, arriving mid-afternoon or middle of the night.

Other Regulatory Work Underway

Earlier this year car hire hit the news with another negative story regarding charges should your car hire be damaged. Which magazine, in an article called Grand theft auto: The great car hire rip off describe how they mystery-shopped a number of firms and found that the charges made by car hire firms for damage are higher than those a local garage would charge.

The SFO are already investigating Europcar for a specific situation found last year, for which the car hire giant have already put aside over €40m to cover potential penalties.

As a car hirer, the best way by far to protect yourself against such charges is to take a car hire excess insurance policy - that way you won't be out of pocket - and, if the insurer feels the charge levied is out of order, it's up to them to take it up with the rental firm.

Car Hire Firms Disappearing

Last summer saw the demise of broker Atlas Choice and Spanish car hire firm Solmar but, following financial difficulties within the firms, both left as always some hirers out of pocket. And this summer appears to be following the same pattern.

In the last week budget car hire firm AutoClick cancelled all bookings following the firm becoming embroiled in a potential financial scandal. Reports in the Spanish press are saying that the Majorcan based car firm have been selling on cars which had been obtained at hugely discounted rates from manufacturers. Given the company have been expanding rapidly across Europe, the cancellations and subsequent re-bookings elsewhere have created some capacity issues and therefore in a number of locations prices have leapt.

Our top tip when it comes to booking ahead is to keep your money in your pocket until you get the keys. Sites such as Clarify Car Hire, which is UK based, only take a small deposit on booking - limiting your financial risk - and also leave you in a powerful position when it comes to negotiating at the desk.

Car Hire Firms Changing Ownership

The biggest change this summer is the €550 million buyout of Spanish low cost rental firm Goldcar by Europcar. Goldcar, renowned for their hard sell approach when it comes to selling insurance products at the desk, have been swallowed up by the European giant for this eye-watering sum of money. The reason is that Europcar want to significantly increase their presence in the low-cost market. Long term we seen this move as a positive one, as it's likely to curtail some of the sharper practices adopted by a few of the front desk Goldcar staff.

Centauro, the well regarded Spanish brand, have been acquired by Portobello Capital who acquired a majority interest from the Devesa family. The family and their existing management are retained and the strategy is to consolidate Centauro’s competitive position and open in new locations significantly increasing its market share.

And, across the world, Eastcoast Car Rentals, the Australian domestic brand, has seen a management buyout. Given we hold that management team in high regard, this will only further enhance the company's reputation.

There is certainly change and consolidation in the car rental market - and overall this is mostly positive - but, as with all change, there are always teething problems.

We will continue to keep you appraised of moves within the industry, with the aim of giving you the inside track when it comes to choosing the company you want to use this summer.

Image courtesy of: Pixabay