| Dealership-Based Car Rental Departments |
 |
 |
 |
| Written by Robert Hano |
| Monday, 04 January 2010 13:32 |
|
Almost twenty years ago, I took a position with a growing car rental company in the Boston, MA area. It was a nationwide company that was just beginning the most dramatic expansion in the history of car rental operations. The first location that I worked in was an office leased from a large Buick dealership that had decided that it would be easier to have an outside company handle its rental and loaner car needs. This dealership had maintained a 40 car rental fleet by only renting to its own customers. Within nine months, the office that I worked in was running close to 200 vehicles. Revenue and profitability came very quickly for this location and the newly established region for this company and that success continues today.
This story and ones like it are now well known in our auto industry. The growing local market car rental company became the largest in the world and, in many ways, a model for the industry. They have expanded to major airports around the country and, with various acquisitions, around the globe. Other rental operations have found success in the local replacement market as well, proving that renting vehicles to your dealership and local customer base can add to your revenue stream.
Over the years, I have seen the number of rental departments within the dealership environment rise and fall. At times it seems like there is great interest in growing this business within a dealership, at times it seems that dealers can’t get out of it quick enough. With the difficult economy over the past few years, dealership rental departments are in decline. Manufacturer programs are not as supportive or beneficial and dealers are simply looking to cut costs. Curiously enough, however, while dealers have been cutting back on rental departments this past year, the stocks of publicly traded car rental companies have all increased in value. These increases have been dramatic, anywhere from 200% to, in one case, over 2000%. Apparently, the financial markets realized that, regardless of the economy, people still need to rent cars.
Dealerships across the United States need to take this message to heart. They have the personnel and the facilities for a car rental department. They have a built in customer base unlike any other and they have the access and expertise to purchase inventory. Keeping customers within the umbrella of services offered by your dealership will help the rest of your departments as well. Instead of shipping off customers to some third party rental company with its own used car department and “other” branded vehicles, keep them as your own. Time after time, the business model has been proven to work, it just requires that you commit to it.
Robert Hano is a regional sales manager with Bluebird Auto Rental Systems. Please feel free to contact him at
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
or at 608-270-0347. Bluebird provides the most complete vehicle rental management software and services in the industry with over 25 years of experience.
|
2012-02-03..gif)