Hidden Goldmine: Why You Should Negotiate Your Car Rental Contracts

By Bill Knepper, Senior Consultant

Car Rental is often overlooked as a travel segment that offers an opportunity for significant savings.  Evergreen agreements have become the norm in this sector, and with all the demands put on travel category managers, there is a tendency in the industry to just “let it ride.”

In reality, if you have not conducted a car rental request for proposal (RFP) in the last three years, you are likely missing the opportunity for savings. And, the longer it has been since you conducted an RFP, the greater the savings opportunity.

While there are subtle differences between Avis Budget Group (Avis and Budget), Enterprise Holdings (Enterprise, National, and Alamo), and the Hertz Corporation, they all provide a solid offering capable of servicing corporate travel programs.  With solid utilization of an online booking tool (OBT), switching suppliers is much less traumatic than it was just a few years ago.  Additionally, with the significant increase in rideshare providers such as Uber and Lyft, the car rental marketplace is as competitive as ever as each supplier tries to maintain their revenue levels.

While Expense data will provide you with an overview of where your car rental dollars are going, digging into the supplier data will give you a much better look at that spend.  The key is to look at the breakdown of your spend and identify those areas that offer the maximum opportunity for savings and strengthening your program.  List them out so that at negotiating table, they are a priority in your discussions.

Further, many travel managers focus only on their base daily rates and fail to capitalize on negotiating other components of their program (such as fuel, etc.).  Focusing on those areas of the greatest savings potential and benefit to your specific program will provide the best overall result.  Don’t fall into the trap of negotiating reductions on components that don’t further your goals (such as the one day surcharge).  When in doubt, ask for a reduced rate, a fee waived, or another program benefit.  You may be surprised at just how much your savings opportunity is.

Have questions about how to optimize your rental car agreements or improve your ground transportation program? Drop me a line at bill@goldspringconsulting.com. SpringBoard Ground Transport™ is our industry-leading system designed specifically to support every component of your ground transportation program. We can assist in optimizing your ground transportation needs via a full program strategy review, management of the RFP process, detailed analysis of the proposals, and/or negotiation assistance.

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