auto rental news 2011 handbook

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ACQUIREACQUIRE AN AUTO AN AUTO RENTAL COMPANYRENTAL COMPANY

EFFECTEFFECT LEGISLATIVE CHANGE LEGISLATIVE CHANGE

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ARN • 2011 TECHNOLOGY HANDBOOK2

table of contents2011 Handbook • Volume 24, No. 2

AUTO RENTAL NEWS (ISSN 1075-9409) (USPS 011-305) (CDN IPM# 40013413) is published bimonthly with additional issues in February and December, by Bobit

Business Media, 3520 Challenger Street, Torrance, California 90503-1640. PERIODICALS POSTAGE PAID at Torrance, California 90503-9998 and additional mailing offi ces.

POSTMASTER: Send address changes to Auto Rental News, P.O. Box 1068, Skokie, IL 60076-8068. Please allow 6 to 8 weeks for address changes to take effect. Subscription

Prices - United States $25 per year; Canada $30 per year; Foreign $75 per year. Single copy price - $10; Fact Book - $30. Please allow 6 to 8 weeks to receive your fi rst issue. Bobit

Business Media reserves the right to refuse non-qualifi ed subscriptions. Please address Editorial and Advertising correspondence to the Executive Offi ces at 3520 Challenger Street,

Torrance, California 90503-1640. The contents of this publication may not be reproduced either in whole or in part without consent of Bobit Business Media. All statements made,

although based on information believed to be reliable and accurate, cannot be guaranteed and no fault or liability can be accepted for error or omission. Printed in USA

THE HOW– TO ISSUE

4 Industry News ● DTAG and Avis Budget Group Provide FTC Update ● Business Travel Spending to Grow in 2011

23 Product and Vendor News ● Learn more about these products at the Car Rental Show!

25 Ad Index 28 RentAlert ● Keynote speaker presentations announced for the 2011 Car Rental Show.

DEPARTMENTS

6

12

10

On the Cover: ©istockphoto.com/evirgen

BONUS!

Step-by-step Guides to:

6 Acquire an Auto Rental Company Are you ready to expand? Buying out another rental company

can be a quicker path to new revenue than opening up a brand

new store—if you can avoid the pitfalls going in.

10 Increase Sales Conversions with Language Techniques Motivating your frontline sales team to use active,

service-based language during the rental process will boost

your bottom line.

12 Determine if EVs Are Right for Your Fleet First adopters will gain free publicity and a high rental rate.

But with uncertain resale values, range issues and limited

initial availability, the decision to acquire electric vehicles

for your rental fl eet is not to be taken lightly.

17 Effect Legislative Change Between your state and local representatives, Chamber of

Commerce and industry associations, you have the power to

shape legislation that will directly affect your business.

20 Readers Choose Favorite Rental Car We asked ARN readers to choose their favorite rental car of

all time and tell us why. Toyota Camry tops the list.

ARNHB11toc.indd 2ARNHB11toc.indd 2 1/24/11 2:14:29 PM1/24/11 2:14:29 PM

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mailto:[email protected]

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industry newsDTAG and Avis Budget Group Provide FTC Update

Dollar Thrifty Automotive Group Inc. and Avis Budget

Group Inc. released a joint statement on Jan. 11, regarding their

attempt to achieve antitrust approval from the Federal Trade

Commission.

“Avis Budget and Dollar Thrifty believe substantial progress

has been made in the discussions with the FTC on these issues,

but the FTC’s position with respect to the competitive issues

remains uncertain,” the companies said in the statement.

The two companies said they have told the FTC a potential

acquisition of Dollar Thrifty by Avis Budget would not reduce

competition in the rental car industry. They also said a merger

would result in signifi cant cost savings and operational effi cien-

cies, which would benefi t all rental car customers, particularly

Dollar Thrifty’s core leisure customers.

The two companies said they expect an offi cial decision from

the FTC by the end of March or early April. They also reiterated

in the statement that they have not made any agreements with

respect to any merger or other business combination.

NBTA: Business Travel Spending to Grow in 2011Business travel spending, a key indicator of the overall health of the

U.S. economy, is expected to advance by 5 percent in 2011, according

to the National Business Travel Association (NBTA).

The association also estimated that overall growth of business travel

spending in 2010 reached 2.3 percent, a sharp contrast from the 14.1

percent drop reported in 2009.

“Based on the way 2010 began, the year wrapped up better than

expected thanks to a number of factors, including higher than expect-

ed GDP, stronger exports and very strong corporate profi ts. These

trends are translating into greater business travel spending as compa-

nies invest in travel to drive revenues and compete aggressively in a re-

covering economic environment,” said Michael W. McCormick, NBTA

executive director and COO.

The NBTA forecasted that outbound U.S. international business

travel spending grew 16.9 percent in 2010, an improvement from the

32.1 percent decline recorded in 2009. International spending is ex-

pected to increase more modestly in 2011 — 3.2 percent — as a re-

sult of a weakening dollar.

The NBTA said group travel fl attened out in 2010, but will recover

in 2011 with a projected growth rate of 5.5 percent for trips and 3.2

percent for spending.

Enterprise Rent-A-Car to Offer Chevrolet Volt

Enterprise Rent-A-Car said in January that

it will begin offering Chevrolet Volt extended-

range electric vehicles (EVs) for daily and week-

ly rentals. The Volt will be available at the Mark

Christopher Auto Center in Ontario, Calif.,

along with a new charging station.

Enterprise said additional EVs will be offered

at other Enterprise locations as manufactur-

ers make them available. The company said 500

Nissan LEAFs will be available at select Enter-

prise locations nationwide, and on-site charging

stations will be installed to support the vehicles.

“By embracing new, clean fuel and engine

technologies like electric vehicles, Enterprise

can help the passenger vehicle remain relevant

by giving alternatives a chance to become com-

mercially successful,” said Lee Broughton, direc-

tor of sustainability for Enterprise Holdings.


2007 2008 2009 2010 2011 2012

Yr-t

o-Yr

% C

hang

e 20

12

NBTA U.S. BUSINESS TRAVEL OUTLOOKU.S. Domestic plus International Outbound

■ TOTAL U.S. BUSINESS TRAVEL TRIPS ■ TOTAL U.S. BUSINESS TRAVEL SPENDING

0.0%

10.0%

5.0%

-5.0%

-10.0%

-15.0%

The National Business Travel Association forecasts that

total U.S. business travel trips and spending will increase

in 2011.

FOR THE RECORDAuto Rental News incorrectly stated in the 2011

Fact Book issue that Enterprise had a score of

766 in J.D. Power and Associates’ 2010 Rental

Car Satisfaction Index Study. The correct score is

786, the highest of the 2011 survey.

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2011 TECHNOLOGY HANDBOOK • ARN 5

industry newsRental fl eet sales improved in 2010, but have negatively im-

pacted both the residual performance and perception of qual-

ity for certain vehicle brands, according to the Automotive

Lease Guide (ALG).

Rental fl eet penetration (RFP) is ALG’s measure of the to-

tal number of vehicles sold into rental fl eet channels divided by

total vehicle sales. RFP for the industry increased from 11 per-

cent in 2009 to 13 percent in 2010, resulting in an increase to

ALG’s used supply forecast.

ALG said it recommends RFP levels below 10 percent for

mainstream brands and less than 5 percent for luxury brands

to avoid any negative impact from rental fl eet sales on residu-

al performance.

Chrysler showed the highest increase in RFP with 49 per-

cent in 2010 compared to 19 percent in 2009. The Dodge

and Jeep brands also showed year-over-year increases in RFP

with levels at 32 percent and 18 percent for 2010, respectively.

ALG said the increase in RFP will negate much of the used sup-

ply impact on residual values due to the decline in perceived

quality and residual performance relative to the competitors.

ALG said that rental fl eet sales have an even more detri-

mental effect on residual values and perceived quality for lux-

ury brands compared to mainstream brands. Cadillac showed

the highest year-over-year increase in RFP, jumping from 9

percent in 2009 to 17 percent for 2010. ALG believes the in-

crease in RFP will place Cadillac at a disadvantage compared to

other luxury brands.

Other luxury brands had small changes to RFP levels and av-

eraged less than 5 percent for both 2009 and 2010. Both the

mainstream and luxury domestic brands showed higher rental

fl eet trends versus their import counterparts, ALG said.

DTAG Implements No-smoking Policy for Rental Cars

Dollar Thrifty Automotive Group Inc. has im-

plemented a new policy prohibiting smoking by

renters at all Dollar and Thrifty corporate stores

and participating franchise locations in the Unit-

ed States.

Renters who do not comply with the new

policy and return vehicles after smoking may

face a charge of up to $250. Rental cars that

have been smoked in will be immediate-

ly grounded upon inspection and removed

for a thorough detailing before being returned

for customer use. All rental cars in Dollar and

Thrifty fl eets will display “No Smoking” stickers

notifying renters of the potential charge for non-

compliance.

“We think it is important to follow suit with

the rest of the U.S. travel industry’s non-smok-

ing approach so that travelers always have a

smoke-free means of transportation,” said Scott

Thompson, Dollar Thrifty president and CEO.

Hertz Partners with Beverly Hills Rent A CarThe Hertz Corporation and Beverly Hills Rent A Car, a provider of lux-

ury and exotic vehicles in Southern California and Las Vegas, have partnered

to provide Hertz customers with exotic car rentals.

“High net worth individuals grew worldwide by more than 17 percent in

2009 and there’s growing interest in luxury travel. We’re confi dent our abil-

ity to offer customers exotic and luxurious car rentals in conjunction with

Beverly Hills Rent A Car will be appreciated by high-end travelers who are

seeking unique rental options while traveling,” said Mark P. Frissora, Hertz’s

chairman and CEO.

Beverly Hills Rent A Car’s selection of vehicles includes such exotic

cars as the Ferrari 458 Italia, Porsche Panamera, Mercedes SLS and Rolls

Royce Ghost. In addition, the company offers customers VIP pick up

service at baggage claim, complimentary pick up service to and from

each of its six Southern California and Las Vegas locations, and delivery

to hotel, home or business.

“Beverly Hills Rent A Car prides itself on providing its customers the best

products and services in the exotic car rental market and we’re confi dent

that working with Hertz

will enhance our cus-

tomers’ experience,”

said John Vincent of

Beverly Hills Rent A Car.

ALG: High Rental Fleet Sales Still Damaging Residual Values

LARGEST INCREASE IN RENTAL FLEET PENETRATION FOR LUXURY SECTOR, 2010 VS 2009

BRAND RANK2010 YTD

RFP INCREASE IN RFP YOYCADILLAC 1 17% +7.6 PPTS

JAGUAR 2 3% +2.2 PPTSPORSCHE 3 1% +0.7 PPTSLEXUS 4 1% +0.1 PPTSBMW 5 1% +0.1 PPTS

AVERAGE 5% +0.3 PPTS

LARGEST INCREASE IN RENTAL FLEET PENETRATION FOR MAINSTREAM SECTOR, 2010 VS 2009

BRAND RANK2010 YTD

RFP INCREASE IN RFP YOYCHRYSLER 1 49% +30.3 PPTS

DODGE 2 32% +19.8 PPTSJEEP 3 18% +13.6 PPTS

CHEVROLET 4 26% +12.7 PPTSMERCURY 5 36% +11.7 PPTS

AVERAGE 17% +4.6 PPTS

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HOW TOACQ UIRE

Are you ready to expand? Buying out or merging with another rental company can be a quicker path

to new revenue than opening up a brand new store—if you can avoid the pitfalls going in.


BY JIM TENNANT

You can probably remember the days when there

were eight separate, standalone national car rental

companies. Th ere are still eight separate brands

visible to the public, but behind the back walls just four

companies (as of this writing) own the eight brands. Th e

companies have realized substantial savings through

combined fl eets, employees and support infrastructure,

and have probably strengthened the industry by keeping

the eight brands alive in the public’s eyes.

Merging operations have worked for the large nation-

al companies. Can it also be a winning strategy for much

smaller, local or regional companies? Can you strengthen

your company and improve your bottom line by merg-

ing with or buying another car rental business?

WHY TAKE OVER SOMEONE ELSE’S BUSINESS?

1To get into a new geographic area. Opening a store from

scratch in a new area can be very time consuming and

costly. You need to fi nd a suitable location that presents a

good face to the public and has a place to clean and store

your cars—not easy in some areas.

You will need to spend money on leasehold improve-

ments, signs, furniture and equipment, computers, etc.

You may have to deal with zoning and licensing issues.

You will need to hire and train employees or take them

from your existing locations.

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Th e day you open, you will have zero busi-

ness. You will face a long building process

before the store is covering its overhead and

putting money toward your bottom line.

Is there an existing business in the pro-

spective new area? Would it be better for

you to take it over instead of starting from

scratch? In the early days of our company,

we operated a small location near San Fran-

cisco International Airport (SFO), and we

had dreams of opening in downtown San

Francisco, an area with great tourist and lo-

cal business potential. It was probably not as

diffi cult an area as Manhattan, but close. It

was too much for our limited resources, so

it did not happen for the fi rst three or four

years we were in business.

One day we spotted a classifi ed ad off er-

ing a small downtown car rental business

for sale. We were able to buy it on good

terms and instantly had a downtown loca-

tion complete with parking, a wash bay and,

most importantly, a steady stream of exist-

ing business.

2To grow your business much faster than

organic growth allows. Th e major compa-

nies realized signifi cant savings by combining

back room operations and fl eet. Economies

of scale exist in almost all businesses and a

20 to 30 percent or greater increase in your

revenue might be much more valuable than

the same revenue operated as a standalone

business.

Buying another business in your present

area could make a lot of sense. You can ex-

pect that the combined businesses will lose

some existing revenue to the competition in

a merger, but handled correctly the loss can

be minimal. Additionally, under the right

circumstances, you can capture new reve-

nue from the merged company by off ering

a wider range of vehicles, newer vehicles or

additional services, such as customer pick-

ups from a wider area.

3To get into a new market segment. Have

you wanted to off er luxury vehicles or large

passenger vans? Have you been looking for

a way to get business from a large corporate

account or government business in your area?

Like a new geographic area, you can enter

these segments on your own and suff er the

missteps and startup labor and costs that go

with it. But what if there is a business already

in that segment? Would it make sense to buy

this business? Th ose business owners have

already done the work and made the mistakes

that you might make.

When we bought the little downtown

business, it not only had the steady stream of

walk-in business because of its excellent lo-

cation, the staff also had good contacts with

hotels and local corporate accounts. We of-

fered a wider range of newer and much nic-

er vehicles and were immediately able to in-

crease this business.

Keep your eye on the local market and

keep an open mind. Your competition is

also a potential takeover target and there are

many ways you can strengthen your opera-

tion by merging it with another.

WHAT DO YOU GET WHEN YOU BUY A BUSINESS?

You might buy a business for any num-

ber of reasons, some of which are outlined

above. However, when you buy it, you in-

herit certain things that you need to think

about carefully.

1Location. Th e physical location might be

your main reason for buying or you may

unwillingly acquire a location as part of the

deal. If you plan to keep it, be sure you can.

When we bought the downtown business,

the sellers were on a month-to-month lease

because they were not sure of the future of

the business. Before committing to buy, we

met with the landlord, who was delighted to

have stable, experienced operators as tenants.

We were able to lock up the location in a very

favorable long-term lease.

On the other hand, if you do not plan to

keep a location, the cost of getting out of the

lease, if any, is part of the acquisition cost of

the business.

2Employees. You may or may not want to

keep the business’s existing employees.

Our experience in taking over a number of

businesses is mixed, to say the least. Some of

the best and some of the worst employees have


AN AUTO RENTAL COMPANYACQ UIRE

Keep your eye on the local market and keep an open mind. Your competition is

also a potential takeover tar-get and there are many ways

you can strengthen your operation by merging it with

another.

Jim Tennant and the Tennant Group Round-

table return to the Car Rental Show for a

two-hour, pre-conference seminar (Tuesday,

March 8, 10 am – noon). This year’s ses-

sion will feature a confi dential, one-on-one

analysis of your company’s operating

and fi nancial data by an experienced,

non-competing roundtable member. Free,

pre-registration required.


come from businesses we have taken over.

When you take over a business, the sell-

er should discharge all employees and take

care of any sick time, vacation or other

pay owed and any other commitments to

the employees. You will start fresh. If you

need employees, the previous employees

are obviously a good source, but there are

many potential pitfalls. Do not hire all

the employees. If you took over the entire

staff, employment regulations may view

you as merely new owners of an existing

business, and you would then be liable for

their years of service and other employ-

ment obligations.

Th e seller should fi rst explicitly terminate

the employees, and then you should have

them apply, just as they were coming off the

street. Plan on retraining and spending time

orienting the new employees—you will have

bad habits to break. If possible, move employ-

ees around so that old and new employees

are working side by side. Th ere are pitfalls,

but the old staff knows the area, has a rela-

tionship with the customers and knows the

market segments that are new to you. You’ll

want to take advantage of this while not de-

grading your existing business.

3Vehicles. It is diffi cult—if not impossible—

to get out of vehicles in the middle of their

lifecycle, so oft en the seller’s vehicles are a big

part of the deal. When we bought the down-

town business, the sellers were running older

vehicles. We ordered additional vehicles, but

they would not be delivered for a few weeks.

Th e sellers were able to sell off some of their

fl eet immediately, but as part of the deal we

leased the balance of their fl eet at their carrying

cost while they sold them off one or two at a

time. It was a small price to pay to let them

get out cleanly and for us to have suffi cient

vehicles to keep the business running.

We bought a much larger local company

many years later and the vehicles were the

major consideration. Th e seller’s vehicles

were all fi nanced through Ford Motor Cred-

it, which was delighted to have our company,

with its perfect history with Ford, take over

the fi nancing. We worked out an equitable

arrangement to cover the diff erence between

the amount owed and the actual value of the

vehicles, taking into account that we would

hold and sell the vehicles at the end of their

normal life cycle.

Th e seller’s vehicles will oft en be the most

diffi cult part of the deal. It is important to

understand the seller’s problems and then

get creative in coming up with an equita-

ble solution.

4 Th e Business Name. You will probably

want to switch the new business to your

name, unless the old name is better or has

value itself. However, when you make the

switch you should do it in such a way that you

don’t lose the goodwill and existing business

of the old name. Sometimes a gradual, two- or

three-step conversion is best.


● Price. What is the business worth to me? Everyone focus-

es on price and it is obviously important. But if the deal is right,

price is just one part of it, and you can afford to pay a fair price.

If the fi t is wrong, you don’t want the business, even if it’s free.

The most common valuation method is a multiple of adjust-

ed earnings — net earnings before taxes, but with all the items

extracted that are not really part of the business. This includes

owners’ salaries greater than what you would pay an outside

manager. It also includes family vehicles and other goodies that

you draw from the business. A normal multiple would be three

to fi ve times, depending on the situation.

● Employees and Management. Is your management strong

enough to oversee a larger number of employees? Are you

capable of running a larger company? How does your company

handle change? In our experience, this is where you can go

wrong most easily. It will be more diffi cult than you think.

● Financing and Cash Flow. You will need more vehicles,

of course, but you also should anticipate increased operating

cash needs during the takeover period — they will probably be

greater than you think.

● Accounting and Computers. This is critical. You need

computers up and running in all offi ces the day you take over.

Be sure your accounting system can begin billing new custom-

ers immediately.

● Personal. At this point in your life, are you looking for new

challenges or are you satisfi ed with the status quo? This should

be the last question you ask just before you make an offer, but it

is perhaps fi rst in importance. You will be leading your company

into new territory and you need to be sure!

● The Transition. The best deal can be made much worse

by poor planning and execution of the takeover. Who gets

the revenue from cars on rent on the takeover date? Who is

responsible for damage and third-party claims on vehicles on

rent at takeover? What is the procedure for receivables during

the transition? How will you handle the announcement to the

employees, existing customers, vendors and the public? All these

and many more questions should be addressed as part of the

agreement, but some details will be missed. Trust and the ability

to compromise will be necessary.

THE ACQUISITION CHECKLISTBefore making an offer, go through this checklist:

With the recent turmoil in the industry, loss of fi nanc-ing, insurance or sources of affordable vehicles can all be great motivators for

prospective sellers. For someone facing these types of issues, a potential buyer,

willing and able to put together a fair deal, could be the best thing that ever happened to him or her.



3Analyze the value. How much does the

seller want? It may be that the seller would

be satisfi ed with less than you thought, so you

should always ask this. In our experience,

though, the seller is factoring in a lifetime

of work, sentimental value and other things

that are of no value to you. Do not react to the

price. Just ask more questions as they come up

and say you will get back with them.

4Structure the off er. Be as creative as pos-

sible in structuring an off er. Th e terms

are in some ways as important as the price.

A percentage of revenue may be a good ap-

proach, because the seller may have a high

regard for his business, and you are protected

if the revenue comes in lower than expected.

You pay a commission to a travel agent — why

not pay the seller?

When we purchased the local business,

the terms were that we took over the fi nanc-

ing of the vehicles, with an adjustment for

market value at the end of the holding cycle,

plus 10 percent of the revenue from the ac-

quired locations for six months. Th e vehicles

are probably an important issue to the sell-

er, so try to come up with an approach that,

while not harming your operation, gets the

seller out of his vehicles cleanly.

5 Show respect. Above all, show the seller and

his or her business respect for the lifetime

of work he or she spent building it.

Obviously, mergers and acquisitions in

the local and regional end of the car rent-

al business will not keep Goldman Sachs in

business, but it can be a great opportunity

under the right circumstances.

sues, a potential buyer, willing and able to

put together a fair deal, could be the best

thing that ever happened to him or her. Don’t

think that you are unfairly taking advantage

of a bad situation.

HOW DO I APPROACH A DEAL?

In our experience, trust is the fi rst and most

important key to putting together a deal. Some

are good at playing business hardball, but that

is not our style. A low-key, win-win approach

has worked well for us. Get involved with the

business’s advisors early on. Accountants and

attorneys oft en have a more realistic and less

emotional view of the business than the own-

er, but that will not always be true.

1Ask questions and listen. Ask all the

questions you can at this point. What is the

seller’s motivation? What are his problems?

What does she really need? How are vehicles

fi nanced? How much equity is there in the

vehicles or how much are they upside down?

What debts are personally guaranteed? What

are the terms of the location leases? What are

the seller’s plans aft er the sale? Does he or she

want to retire and travel? Would he or she want

a role in the company for a while?

2 Know your benefi t. Ask yourself these

questions. What will buying the business

do for you? Are there economies of scale?

Are the locations valuable to you? Are they

in market segments that would help you?

What is the business worth to you?

Th e seller has to give up all rights to the

name. Usually, the seller can assign the coun-

ty fi ctitious name registration to you, and if

he holds a state or federal trademark, it must

be assigned as well.

5 Other Assets. Computers, furniture,

counters, offi ce equipment, shop equip-

ment and other assets have little market value

but can be quite valuable to you because they

are expensive to replace. Each situation will

vary, but these items should be addressed as

part of the deal.

WHO ARE POTENTIAL TAKEOVER CANDI-DATES?

Supposedly everybody has his or her

price, but a young, vigorous owner, making

consistently high profi ts with no need to fi -

nance, and who is self-insured and has no

personal or family issues will have a much

higher price.

Good candidates are veteran owners,

especially if they do not have anyone in

the next generation willing or capable of

taking over. With the recent turmoil in

the industry, loss of financing, insurance

or sources of affordable vehicles can all

be great motivators for prospective sell-

ers. Divorce, death of a family member,

health or other personal issues could play

a role as well.

Keeping your eyes open for any of these

potential candidates could pay back in a big

way. For someone facing these types of is-

Jim Tennant was the founder and partner of car rental busi-

nesses based in the San Francisco Bay Area from 1982 to 2001.

During that time, his company completed the following sales

and purchases:

● Bought a small, local downtown San Francisco franchise

using a small down payment and a three-year note. Leased a

few of the seller’s vehicles for carrying costs until they were

sold. The location (which later became a Payless franchise) had

a very strong manager and the offi ce paid for itself much faster

than anticipated.

● Sold the Payless franchise and business to a sophisticated

buyer with no car rental experience. The price was based on a

multiple of adjusted earnings, plus two years paid consulting as-

sistance. Gave buyer rights to Ford repurchase vehicles, plus leased

buyer a small number of vehicles to help in tran-

sition. After takeover, spent considerable time

with the seller, who is very successful today.

● At the same time as the Payless sale,

purchased the money-losing but much larger

Thrifty Car Rental franchise and business, with

a down payment plus a fi ve-year note.

● Purchased large local, multiple-location rental business. Very

little overlap between new and existing business offi ces; closed

only one offi ce. Paid 10 percent of acquired offi ces’ revenue for

six months, plus took over vehicles that were not yet ready for

sale. Ran into many unanticipated problems, in no small part due to

broken promises from the telephone company, resulting in a delay

in having all offi ces online.

A HISTORY OF BUYING AND SELLING

TENNANT



The success behind every outstanding

car and truck rental operation is always

found in the smallest of details. Th e

best team members approach every detail

as though it were the greatest piece of the

operational puzzle.

It is critical for your frontline team to un-

derstand the importance of their words dur-

ing those critical fi ve minutes in the rental

process. Creating an awareness of how the

“little things” add up and how words mat-

ter will enhance your customer’s experience

and lead to a stronger bottom line.

The Power of “We”When pricing a reservation rate, walk-

up or an upsell, it is critical that the front-

line associate always use the pronoun “we”

instead of “I.”

If an associate says, “I can get you a rate of

$49 per day on that,” it implies that the front-

line associate solely controls the pricing sce-

nario. In many cases it will open up further

negotiation with the customer. Th is eff ect is

magnifi ed if your sales team is much younger

than their average customer. By utilizing “we,”

a “strength in numbers” perception is created

for the customer because it implies that the per-

ceived entity of the car rental company is be-

hind the frontline associate as well.

Using the word “we” instead of “I” is al-

ways more eff ective in a customer service re-

demption scenario as well. Saying to an up-

set customer, “Mr. Smith, I understand you

have a concern, let me listen to it, so we can

get it resolved,” creates for the customer an

environment of collaboration.

Measurable Impact: Operators who have

a strong service-based sales process in place

with follow-up training and coaching can

expect to have a stronger upsell conversion

than their competitors. Th ey will also have a

stronger rate per day on their walkup rentals

and a higher reservation conversion rate.

Avoid Passive TalkImplement a defi ned coaching process

that stresses strong, confi dent dialogues and

closing messages. Train your frontline team

to avoid using passive phrases such as “We

have,” “Do you want,” “We off er,” “Would

you like, “Do you need.” Replace those pas-

sive messages with strong words and phras-

es such as, “recommend,” “suggest,” “we en-

courage,” and “many customers prefer.”

Successful sales people are advocates of

their products and services; utilizing this dia-

logue technique will make the rental process

more professional for your customer and will

increase the confi dence level of your front-

line sales team.

Measurable Impact: Eliminating passive

talk in your frontline team will increase your

coverage and product sales conversion as well

as lower customer complaints.

Using “Empty” Lowers Profi tsTelling the customer to return the vehi-

cle empty not only lowers the ability to sell

your fuel service option, it also increases

the customer’s apprehension that they will

run out of gas prior to returning. Th e mar-

gins on fuel are thin to begin with, encour-

aging the customer to push it will only make

them worse.

Replace the “empty” phrase with, “You

can return the car with whatever amount

of gas you are comfortable,” or “You can

return the vehicle without refueling.” Th is

will lower your customer’s apprehensions

about fuel.

Th is dialogue and benefi t to the custom-

er is only eff ective if the customer is aware

of the convenience of the fuel option and is

informed that they are purchasing the en-

tire tank.

Measurable Impact: Based on a recent study,

the average profit margin on prepaid fuel

services is 11 to 14 percent. Avoiding the

word “empty” will not only increase your

fuel margins on returned vehicles, it will

lower your sales-related complaints and in-

crease the conversion on fuel option sales.

Control the CallRental operators spend millions on mar-

keting to make the phones ring. It is critical

that their frontline sales teams be prepared

to answer those phones in a polite and pro-

fessional manner.

The most effective frontline team mem-

ber answers the phone by thanking the cus-

Proper language during the rental process will increase sales conversions, lower customer complaints and boost the confi dence of your frontline sales team.

LITTLE WORDS LEAD TO

BIGGER PROFITS

BY KEN STELLON

PHOTO: ©ISTOCKPHOTO.COM/WOSEPHJEBER

ARNHB11motivate.indd 10ARNHB11motivate.indd 10 1/24/11 2:44:32 PM1/24/11 2:44:32 PM

tomer immediately. The associate will then

state the rental office’s geographic location,

offer his or her name to the customer and

then solicit the name of the customer.

For example, the strongest greeting is,

“Th ank you for choosing ABC Rent A Car at

Fourth Street, my name is Ann. May I have

your name please?” Th is technique conveys

appreciation immediately to the potential

customer, and by stating the location, the

associate is oft en answering the customer’s

fi rst question. Th is technique also quick-

ly transitions to the relationship aspect of

the associate’s name and the potential cus-

tomer’s name.

Time is money, and competition for that

potential customer’s attention is fi erce. En-

suring that your team utilizes this strategy

will lead to greater call effi ciency and new

bookings.

Measurable Impact: To measure your

team’s follow-through, have your team test

call their neighboring locations and your

competitors. The impact of using this tech-

nique can be measured by the increase in

local reservations made compared to the

800 number reservation channel and the de-

crease in reservation cancellation rates.

Ask Open-ended Qualifying Questions

In gathering information from the cus-

tomer, it is essential to use open-ended ques-

tions to determine his or her needs. Ask-

ing closed-ended questions usually results

in a “yes” or “no” response and doesn’t al-

low the associate to gather necessary infor-

mation to make sound, needs-based recom-

mendations.

Although using open-ended questions

will take more time than closed-ended ques-

tions, the results can be signifi cant. Open-

ended questions are more useful in gath-

ering information, because responses are

not as limited. Th ese questions are also per-

ceived as less threatening and foster a high

level of trust.

Measurable Impact: If associates use only

closed-ended questions, they will reduce

most product penetrations (namely, up-

grades and coverage) by 20 to 30 percent —

thus hurting the operation’s bottom line.

Conversely, if associates use open-ended

questions, sales penetrations increase dra-

matically and certain customer complaints

are reduced as well.

“It’s the little things that are vital. Little

things make big things happen,” John Wood-

en, one of the greatest basketball coaches of

all time, once said.

Take stock of those little things that can

make big things happen for you, your oper-

ation and the team that you entrust to take

care of your customers.

Ken Stellon is a managing partner for the

Frontline Performance Group (FPG). Stel-

lon and the team at FPG are frequent con-

tributors to Auto Rental News. Contact Stel-

lon at (630) 788-2879.

ARNFB11thrifty.indd 1 11/22/10 4:18:01 PM


Team members from Frontline Perfor-

mance Group will be presenting and

exhibiting at the 2011 Car Rental Show.

ARNHB11motivate.indd 11ARNHB11motivate.indd 11 1/24/11 2:44:37 PM1/24/11 2:44:37 PM


Pure electric vehicles (or EVs) are be-

coming the latest rage in the auto rental

industry. It seems a week does not go

by without another announcement of a new

EV launch. If you have been to the Car Rental

Show in the past few years, you may have seen

and test drove EV models available through

Eckhaus Fleet, including ZAPs, Zenns and

the Mitsubishi i-MiEV.

Th e fi rst wave of electric cars is just reach-

ing the market, and Hertz and Enterprise

have announced they are adding EVs to their

rental fl eets. But is this the right time to add

electric vehicles to your fl eet?

Th e fi rst step is to understand the market

through the answers to these questions:

WHY WOULD YOU WANT TO BE AN EARLY ADOPTER?

● The Benefi ts of GreenIncorporating EVs into your fl eet shows

your commitment to being environmental-

ly responsible. Enterprise and Hertz realize

being green is good business. Far from being

“tree huggers,” these companies are bringing

in more customers at a higher price point.

Corporations with green mandates will

want to try out the electric car. Th ey will want

to rent them for presentations and conferenc-

es to show their commitment to a cleaner envi-

ronment. Cities and states are also under similar

mandates and they will want to try out the new

technology as well. If you rent EVs, your busi-

ness will be exposed to customers you might

not normally do business with.

Eckhaus Fleet recently put the Mitsubishi

i-MiEV through its paces for two weeks near

our offi ces in Fresno, Calif. During that time

we had more than 30 city offi cials, fl eet man-

agers and interested individuals who want-

ed to drive our test model.

● Free Publicity!Because Eckhaus Fleet had test-

ed the i-MiEV locally, our com-

pany was featured on two local

television newscasts and in

the business section of the

Fresno Bee. One electric car

might pay for itself in free

advertising if you are fi rst

to the market. If you wait

and end up the third or

fourth rental company

in your area with an elec-

tric car, you will not get the

same response as the fi rst.

● The Novelty FactorInitially, there will be a limited number of

units available for both consumers and rent-

al fl eets, and this lack of supply will allow for

higher rental rates.

When the (non-electric, but much hyped)

smart car was fi rst introduced, Eckhaus sold

two units to a customer who was able to rent

them out constantly at $99 a day with a two-

day minimum. Th e customer sold them for

a profi t. Th e Nissan LEAF has a wait list of

more than 20,000 buyers. A lot of people will

want to rent an electric car to try it out. When

you’re ready to de-fl eet, early adopters will

be in line to buy your used units.

● Incentives to BuyInitially, there are several federal and

state programs available to encourage ear-

ly adoption. Th ere is a federal tax credit of

up to $7,500 for qualifi ed electric vehicles.

In California, there is an additional rebate

from the state of up to $5,000. Some cities

also have programs.

With these incentives, an electric car like

the i-MiEV, with an estimated MSRP of

First adopters will gain free publicity and a high rental rate. But with uncertain resale values, range issues and limited initial availability, the decision to acquire electric vehicles for your rental fl eet is not to be taken lightly.

WILL ELECTRIC VWORK FOR YOUR R

BY TIM YOPP

A Tesla Roadster

meets a Mitsubishi

i-MiEV outside the

Eckhaus Fleet offi ces

in Clovis, Calif.

Hertz has partnered

with Daimler’s smart

USA to bring the smart

for two electric drive to the Connect by

Hertz car sharing program.

ARNHB11electric.indd 12ARNHB11electric.indd 12 1/24/11 2:42:04 PM1/24/11 2:42:04 PM

$28,000, could cost as little as $16,500. Th e

Nissan LEAF site has incentive information

by state. (Visit www.nissanusa.com/leaf-

electric-car and click on the “Price” button

to view incentives.)

● Reduced MaintenanceElectric cars require almost no main-

tenance. Many of the cars are direct drive

so there is no transmission and there is no

oil to change. Regenerative braking causes

brakes to last longer. A once-a-year tune

up is satisfactory to make sure the connec-

tions are tight.

WHY WOULD YOU AVOID BEING AN EARLY ADOPTER?

● Battery Cost and ReplacementUntil the cost of batteries goes down, elec-

tric cars will remain expensive compared to

a similarly equipped gas-powered vehicle.

Th ough built on a proprietary platform, the

Nissan LEAF has an MSRP of $32,780 for the

SV model and is similar in size and equip-

ment to the Nissan Versa, which runs from

about $10,000 to $17,000.

Th e fi rst Tesla model was powered by 6,831

lithium-ion batteries, which are commonly

used in laptops. Th e cost to wire and manage

all those batteries added substantially to the

cost of the car. Electric cars coming to mar-

ket now have larger format batteries that cost

less and are easier to manage. Th ese batteries

are expected to last fi ve to seven years.

Battery costs are expected to drop with the

application of new technologies and econ-

omies of scale. In 2009, a replacement bat-

tery pack for the Tesla cost $36,000, but Te-

sla estimates the cost will drop to $12,000

in seven years.

● Uncertain ValueTh ere is no established residual value for

this car class. However, the market did quick-

ly establish a residual value for hybrids such

as the Toyota Prius.

Similar to hybrids, electric vehicles’ resid-

ual values will vary with the cost of gasoline.

In 2008, when gasoline went up to $4 a gallon,

used hybrids were selling for more than new

ones. With oil prices expected to stay above

$90 a barrel, residual values should stay fi rm.

Some people are forecasting an active mar-

ket in used electric vehicles, which will pro-

vide an easy way to dispose of them.

● FundingUntil a residual value is established, banks

may be reluctant to fund electric cars. Th is

will be especially true with new, indepen-

dent manufacturers such as CODA. Howev-

er, Bank of America did provide funding for

the purchase of Teslas. If you need funding,

start small. 1st Source Bank “would consid-

er 10 to 20 for a customer but not a hundred

units initially,” according to Joe Opferman,

vice president of the bank’s auto and light

truck division.

● Range IssuesTh e fi rst generation of electric cars has

limited range. Nissan estimates a range of

62 to 138 miles depending on terrain, speed

and accessory use. Th is rental situation works

well for business travelers with a series of lo-

cal meetings, but not a family going from

New York to Disney World.

All manufacturers are equipping their

electric vehicles with smart displays to man-

age remaining charge and direct drivers to a

charge point. Th is should help reduce “range


VEHICLESR RENTAL FLEET?


http://www.nissanusa.com/leaf-electric-car



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anxiety,” but what happens if your rental cus-

tomer runs out of charge?

● Charging Infrastructure, Time and CostPublic charging infrastructure is just com-

ing online. A lack of charging stations com-

bined with limited range and a lengthy charge

time reduces electric vehicles’ utility.

While most EVs will charge on a standard

110v household circuit, EVs take at least eight

to 10 hours to get to a full charge, or longer.

Th is presents charging challenges for quick

turnarounds. Specialized quick charge cir-

cuits will charge an EV to 80 percent in about

20 minutes, but can cost up to $12,000 per

unit and are not yet widely available.

● TrainingIn order to get the most miles out of your

electric car, both drivers and your rental per-

sonnel need a limited amount of training.

Th e cars are amazingly quiet. Some vehi-

cles require that accessories need to be turned

off when the EV is parked to avoid draining

the battery. Driving style aff ects the range.

Smooth acceleration and deceleration will

extend range while aggressive acceleration

and deceleration will decrease range.

● AvailabilityElectric vehicles will be fi rst assigned to

dealers. As with any overhyped new model,

dealers will sell them for substantially more

than invoice.

We have already seen delays in the pro-

jected delivery of the fi rst all-electric produc-

tion vehicles and will probably see more. Th e

Nissan LEAF and the extended-range elec-

tric Chevy Volt are offi cially on sale but are

experiencing severe backlogs. With this in

mind, it is highly likely that only the larg-

er rental companies will be able to get their

hands on early units.

CODA, makers of an all-electric sedan, have

pushed back their release date from Decem-

ber 2010 to the third quarter of 2011.

Smart has announced it will launch the

smart fortwo electric as a 2012 model in the

fourth quarter of 2011 with very limited avail-

ability. Wider availability will not occur until

the fi rst or second quarter of 2012.

Th e American version of the Mitsubishi

i-MiEV is slated for sale in the fourth quar-

ter as well. Eckhaus Fleet has a fl eet alloca-

tion of iMiEVs available for rental and com-

mercial fl eets.

Depending on your market, adding a

small number of electric cars to your fl eet

could be very profi table if they are market-

ed properly. Th ere is a risk, but you will be a

market leader and as more electric vehicles

arrive the fi rst adopters will have established

the market.

Tim Yopp is chief technology officer of

Eckhaus Fleet LLC, one of the largest

independent fleet suppliers represent-

ing Hyundai, Suzuki, Toyota and other

manufacturers to the corporate fleet and

rental car industries. He can be reached

at [email protected].


Eckhaus Fleet will have an electric

vehicle to test drive at the 2011 Car

Rental Show.

Enterprise and Hertz have announced

partnerships with CODA Automotive to rent

CODA’s all-electric sedan (pictured). Both

rental car companies are also rolling out

Nissan LEAF all-electric models to select

locations in the fi rst quarter of 2011.

Enterprise announced it will offer the Chevrolet

Volt extended-range electric vehicle for rent

through a dealership location in Ontario, Calif.

starting in January.




Between your state and local representatives, Chamber of Commerce and industry asso-ciations, you have the power to shape legislation that will directly affect your business.

HOW TO EFFECT LEGISLATIVE CH ANGE BY SHARON FAULKNER

In any business, if you have a problem

you find a solution. You don’t wait for

someone else to fix what’s broken; you

put out your own fires. So, why do so many

people expect others to change a law for

them when it’s crippling their own indus-

try? It might be that they just don’t know

where to begin, or they think they won’t be

effective when it comes to politics — the

most frustrating, slow moving, at times

ineffectual, often confusing process that

exists in the world today.

Your state is a permissive use state. How

can you change it? There is another discrim-

inatory tax for automobile rentals. How can

you stop it from happening again in your

state? The government thinks that anyone

who has a license, regardless of age, should

be allowed to rent your car. How can you

make sure this bill doesn’t move forward?

Every year countless bills are introduced in

Congress and in state legislatures that will

affect your business, most of them nega-

tively. So what can you do?

Start by knowing that you usually can’t

do it alone. Most of the time it takes num-

bers to stop, support, or introduce legisla-

tion. Join your state’s rental organization

and become active by attending its meet-

ings. Even if you don’t think of yourself as

a political animal or a joiner, you can’t ig-

nore that the car rental industry is plagued

by government regulations and taxes. At

the minimum, you need to stay informed

of the political climate surrounding your

business.

Timeline of actual legislation and amendments, 1988-2002If you want to change a law, it takes time, commitment, money and a unifi ed front from within the ranks of your industry.

This timeline outlines the 14-year effort to change the New York State law regarding the ability to sell a collision damage waiver.

▲

December 1988An act to amend the general business law section 396-

z in New York passes. It limits negligent drivers’ liability

for damage to vehicles rented from rental companies

to $100 and eliminates the sale of any collision damage

waiver in the state of New York. It defi nes “authorized

driver” to include a wide range of individuals, including

most 18 year olds.

This amendment passes without opposition because

at the time there was no national or statewide car rental

association that monitored legislative issues. It also passes

because it was actually supported by a major car rental

company. The RAC did not share its knowledge of the bill

until it was too late to stop it.

▲

January

1989The New York Vehicle Rental

Association forms to reverse

this amendment. Independents,

franchisees, lobbyists, industry

vendors, travel groups and local

politicians gather to discuss

possible strategies and plans to

propose new legislation. The

fi rst lobbyist is hired.

▲

April 16,

1989State legislature passes the

bill, effective retroactively, to

redefi ne the authorized driver

defi nition that is more favor-

able to the industry.

PHO

TO: ©

ISTO

CK

PHO

TO.C

OM

/BLU

BERR

IES

NEW YORK STATE COLLISION DAMAGE WAIVER BILL SAGA

ARNHB11lobbying.indd 17ARNHB11lobbying.indd 17 1/24/11 2:45:13 PM1/24/11 2:45:13 PM


Meet the PoliticiansWhen you want to introduce a bill or an

amendment to a bill, you need an elected

representative on either a local, state or fed-

eral level to introduce that bill or amend-

ment. That’s where the real politics be-

gin. Being a part of your community and

meeting these representatives is very im-

portant. It’s always harder for someone

to refuse assistance when they know you.

This principle applies to industry events,

such as the Car Rental Show. At this an-

nual industry gathering, you have the op-

portunity to meet and greet the people who

can help you improve your own business

—financiers, software providers, insur-

ance company executives, manufacturers

and the vendors.

Getting to know the politicians and law-

makers and, more importantly, getting them

to know you, make the business of doing busi-

ness easier. So goes politics. Start with your

local chamber of commerce. Most chambers

have an annual breakfast meeting where the

state senators or house members are invit-

ed to speak on the state of the state. Th is is a

great place to begin your own campaign to

meet the people you will be asking for sup-

port in the future.

▲

1990-1994For six years, briefi ng pa-

pers are written and distrib-

uted. Lobbying assignments are given to participating

car rental owners and vendors. Politicians are contact-

ed and appointments with legislators are made during

every session that the legislature meets in Albany, N.Y.

Full days are set aside to visit each legislator that is in

opposition to amending 396-z as well as revisiting each

legislator who supports the amendment to thank him

or her and ask for their continued support.

Letters are presented to every member of the

Senate and the House. Each member of the associa-

tion is asked to send letters to his own representative.

(Note: It only takes 25 letters to your legislator to

acknowledge that there is a concern that needs to be

addressed.)

Members attend chambers of commerce meetings,

business organization dinners and, most importantly,

political fundraisers at every opportunity. Members

repeatedly discuss and outline the devastation of this

legislation with politicians.

▲

1995 A model amendment is proposed

to increase customer liability from

$100 to $500. Sale of collision damage

waivers would continue to be prohib-

ited. The amendment is approved by

Senate and Assembly committees. Lob-

byists for the industry are convinced

that the amendment will pass. During

the fi nal state Senate debate, one ma-

jor rental company registers opposition

to the amendment and it is not brought

up for a vote. (Note: Without the

cohesive agreement and support of the

entire industry most legislation will not

pass. With

the op-

position

of just one

company no

legislation

will pass.)

▲

1996-1998

The New York

Vehicle Rental Associa-

tion continues to meet

and raise money for

lobbyists and political

contributions. More let-

ters are written. More

breakfasts, lunches, din-

ners and conferences

are held. More legisla-

tors are contacted and

appointments are made

for lobbying days at the

capital. No legislation

is passed in support of

the car rental industry.

p

th

p

o

c

le

w

▲ This reunion of New York Vehicle Rental Association board members took place in 2009.

(L to R) Richard Aronow, past president; Frank Elliott, board member; Sharon Faulkner, past

president; Bob Faulkner, past president; and Rick Norris, past treasurer.

At that time, only the Faulkners were still in business as Dollar and Thrifty rental car operators

in Albany, N.Y.

▲ This reunion of NewYorkVehicle Rental Association board members took place in 2009.

PHOTO: ©ISTOCKPHOTO.COM/DJGUNNER

PHOTO: ©ISTOCKPHOTO.COM/SCHULTEPRODUCTIONS

NEW YORK STATE COLLISION DAMAGE WAIVER BILL SAGA

Getting InvolvedIf a bill regarding our industry is introduced,

it goes through 53 steps, and sometimes more,

before it becomes a law. Th erefore, most bills



introduced in Congress don’t become a law.

Some bills don’t even get noticed, but those

that do can be extremely detrimental. Th at’s

why you also need to join and support your

national association, the American Car Rental

Association. ACRA can be there when you’re

too busy running your business to go lobby

at your state capital. ACRA watches the bills

that are introduced, tracks their progress and

makes every eff ort to infl uence the outcome

of new or amended bills that will be a prob-

lem for our industry.

Check ACRA’s Website for information

about the current bills that are being watched

or acted upon. When a bill is introduced to

amend an existing law or when new legisla-

tion is introduced that will benefi t the car

rental companies, which are members of our

association, ACRA aggressively lobbies leg-

islators for passage.

Besides joining ACRA, what can you do?

Communicate with your legislators. Don’t

know where to start? Start by writing and ex-

plaining how legislation will aff ect you and

your customers. Can’t seem to get it started

▲

1998The Vehicle Renters

Financial Responsibility and

Protection Act is intro-

duced. It would allow the

sale of damage waivers and

outlines when a rental com-

pany may or may not void

a waiver. It also limits the

amount the rental company

would be allowed to charge

per day for that waiver. The

amendment does not pass.

▲

1999-2001The car rental industry is

still not working together to

pass the proposed amend-

ment that would make

the renter responsible for

damages to rental cars. A bill

to repeal the law is stopped

in the Assembly by Assem-

blyman Pete Grannis, who

speaks out against it. It is

pulled off the calendar.

▲

2002The industry mounts a major lobbying campaign to repeal the

law. It redoubles its efforts and the large car rental companies

pour money into lobbying and hire a former aide of the House

minority leader. The industry puts forth the argument that there

has been a decline in the number of rental cars from 120,000 in

the decade previous to just 64,000. In addition, more than 360

rental offi ces have been closed and counting. The moral argu-

ment is presented that it is wrong to allow bad drivers to walk

away from accidents after paying only $100. The bill passes the

Assembly and the Senate and goes to Governor George Pataki

for his signature.

The major rental car companies combined with the small car

rental companies—the ones that survived the devastation caused

by the original amendment from 1988—form a united front and

fi nally succeed in passing an amendment that would allow rental

vehicle companies to hold the renter responsible for damages

and reinstate the sale of collision damage waivers with a cap of

$9 per day.

▲

Dec. 3, 2002After a devastating 14-year saga, during which time hundreds

of rental companies failed, Governor Pataki signs into law a bill

that allows car rental companies to sell collision damage waivers

to cover the cost of repairs. The amendment that the industry

has been seeking since 1988 is fi nally attained and the industry

attempts to rebuild. There is a fi ve-year sunset on the amend-

ment. The car rental industry fi nally works together to assure the

success of the amendment.

▲

2007After the fi ve-year mark, the

amendment is not challenged.

Join Sharon Faulkner and the board

members of the American Car Rental

Association for a panel discussion on

today’s issues affecting the auto rental

industry. This is your chance to cause

action and effect change through your

association.

or get it done? ACRA can provide you with

the tools that you need to lobby on your own.

ACRA will provide you with sample letters

to put on your letterhead and give you your

legislator’s contact information so you can

submit your correspondence. ACRA will

provide you with updates on the combined

lobbying eff orts to halt or promote the leg-

islation that directly aff ects you.

Become an AdvocateBecoming an eff ective advocate on legis-

lative issues isn’t easy. Being successful at it

is even harder. But it can be accomplished.

ACRA, with the aid of its members, has

stopped taxes from being added to our rent-

als, has reinforced our stance against the re-

turn of vicarious liability, and has monitored

thousands of legislative matters aff ecting you

and your company.

Every day you are an advocate for your

customers, your employees and your family

members. You need to add your livelihood, the

car rental industry, to your advocacy group.

Our industry can accomplish much more as

a common voice than any one person can do

alone. Become a part of the solution to your

legislative problems. You fi xed the car wash,

you upgraded your soft ware and you hired

an experienced manager. Now you can also

put out the legislative fi res before they ever

get out of control.

Sharon Faulkner is the executive director of

the American Car Rental Association. As a

former Dollar and Thrifty franchise owner,

Faulkner played an integral role in shaping

auto rental-related legislation in New York

State and nationally.

PHOTO: ©ISTOCKPHOTO.COM/DNY59



Survey reveals what really matters to a car rental operator. Toyota Camry tops the list.

AUTO RENTAL OPERATORS CHOOSE FAVORITE RENTAL CAR OF ALL TIME

BY CHRIS BROWN

There’s a survey for everything these

days, and everything is easily trans-

latable to list form. Th e auto industry

is not immune to this: Who can resist “Th e

Best Vehicles for Dogs” or “Th e World’s

Ugliest Cars”?

Th ough predominantly consumer driven,

auto-related surveys have just as much, if not

more, relevance within the business commu-

nity. Th is is especially true for auto rental op-

erators, who have experience with scores of

models and hundreds of vehicles from varied

manufacturers, and who rely on their fl eet ve-

hicles as their main source of revenue.

Auto Rental News surveyed owners and

managers of auto rental companies to deter-

mine their “favorite rental car of all time.”

Survey respondents were asked to judge 35

model choices on price, functionality, reli-

ability, safety, customer experience, main-

tenance, acquisition costs, resale value and

overall return on investment.

Th e results revealed how the auto rental

industry considers a favorite car compared

to the general public. In their evaluations,

survey respondents cited “reliability” most

oft en, not surprising when rental cars run at

least a thousand miles a week. Cost to repair

ranked almost as high—with so many vehi-

cles to manage, “cost to replace brake pads”

and even “cost to replace a lost key” become

key considerations.

Contrary to consumer car surveys, a vehi-

cle’s styling was not a primary judging crite-

ria. While styling was mentioned, it was oft en

in deference to a simple, ergonomic design.

Rental operators appreciate a car “without

a lot of bells and whistles for the customer

to mess up.”

Acquisition cost matters, but resale val-

ue was mentioned more oft en. Functional-

ity, roominess and trunk space are also cov-

eted—respondents pointed out that a good

rental car needs to be versatile enough to

handle a renter’s needs if the requested rent-

al class is sold out.

Here are the top 10 results, out of 386

responses.

THE WINNER: TOYOTA CAMRY

In addition to achieving the highest score,

the Camry garnered the most comprehen-

sive praise from the auto rental industry, with

comments such as “most versatile”; “great car,

period”; “great all-around rental”; “It is by

far the best rental vehicle I have ever come

across, factoring in every aspect of the in-

dustry”; “I think they are the best-built cars

[serving] the car rental industry.”

More so than other models, operators

pointed out that the Camry is a renter’s fa-

vorite, citing its “good image to customers”;

“customer satisfaction”; “customers love it”;

“people request it.”

Th e Camry was voted the most popular

rental car in spite of Toyota’s recent recall

issues. Respondents wrote: “… fewer main-

tenance issues (except for that pesky sticking

pedal business)”; “Customer satisfaction, re-

sale and reliability, even with last year’s recall

issues”; “Until 2010, it was the most reliable

and off ered excellent residual value.”

SECOND PLACE: FORD TAURUS (PRE DISCONTINUATION)

We split the Taurus into two choices, as

the model line was discontinued in 2006

and reborn on a new platform in 2009 for

the 2010 model year (with a rebadging of

the Ford 500 in between). Both incarna-

tions were highly praised by rental oper-

The Toyota Camry was chosen as rental operators’ favorite rental car of all time. Respondents called it a “great car, period,”

and gave it rave reviews for its “customer experience.”

2011 TOYOTA CAMRY

1991 TOYOTA CAMRY

ARNHB11survey.indd 20ARNHB11survey.indd 20 1/24/11 2:41:33 PM1/24/11 2:41:33 PM

ators. The pre-discontinued Taurus took

second overall in our survey, while the new

Taurus took third.

Th e original Ford Taurus is viewed as “a

classic rental car.” Operators praised the Tau-

rus for its low cost to operate, “bulletproof”

reliability (“Steady and true. Seemed like the

one you could always count on to get you there

and back.”), as well as its fl exibility “as both

a mid- and full-size rental.” Its model lon-

gevity was a plus, as respondents referenced

its “familiarity” and “endurance.”

“Customers loved the reliability of a ve-

hicle that hadn’t changed much in almost

15 years,” wrote one respondent. “Very few

customer complaints—they knew what they

were renting,” wrote another.

THIRD PLACE: FORD TAURUS (NEW DESIGN)

Th e new Ford Taurus got high marks for

its styling, performance and overall quality.

Th e new Taurus garnered comments such as

“Customers like to drive this car; it’s com-

fortable, reliable and easy to maintain,” and

“Th e model meets or exceeds all our expec-

tations with regards to the customer experi-

ence, reliability and functionality.”

4. TOYOTA COROLLATh e Toyota Corolla was praised for its high

resale value, which translates into higher rev-

enue per day and a very good return on in-

vestment. It was also cited numerous times

for its reliability. Th is response: “Popular,

dependable, maintenance free, good resale,

positive customer response,” sums up the

sentiment in many of the comments.

5. CHEVROLET IMPALAOperators particularly praised the Chevro-

let Impala for its roomy, “six-passenger capa-

bility,” its reliability (“the least amount of re-

calls in the last few years”), its “good fl eet price”

and “good gas mileage for a large sedan.” Oth-

ers mentioned the Impala as “user friendly, eco-

nomical and easy to buy and sell.”

6. HYUNDAI SONATAHyundai has used the rental market to gain

exposure for its new models. Th e move has paid

off , as the manufacturer’s quality improvements

are getting noticed: “I still have Hyundai/Kia

cars with 100,000 miles,” wrote a respondent,

while others wrote, “Least [number of] me-

chanical problems”; “Long-term reliability of

vehicle, enabling long-term usage accompa-

nied by the strong resale value.”

Another referred to the Hyundai Sonata

as “a great car to run in a rental fl eet for 18-

24 months and sell directly to customers,”

and one wrote, “No bad reviews from cus-

tomers and it is requested a lot, not to men-

tion I like driving them compared to other

vehicles on the list.”

7. HONDA ACCORDTh e Honda Accord made the top 10, even

without the manufacturer actively pursuing the

rental fl eet market. Respondents praised the Ac-

cord for its strong resale value and its fuel econ-

omy, and called it a “customer favorite.”

8. CHRYSLER 300Th e Chrysler 300 was praised for its com-

fort and features (“heated seats and satellite

radio”; “electronic features are nice and easy

to operate,”) as well as its “luxurious, smooth

ride,” resulting in “customer satisfaction across

a wide variety of demographics.”

9. (TIED) FORD FOCUSTh e Ford Focus garnered praise for its low

operating and maintenance costs. Respon-

dents named it as “one of the most depend-

able vehicles, inexpensive to repair,” and

cited its “low cost, good longevity and du-

rability, acceptable resale value considering

low initial cost.”

9. (TIED) NISSAN ALTIMATh e Nissan Altima was praised for its cus-

tomer experience, as respondents nominat-

ed it for its “customer confi dence” and “cus-

tomer general satisfaction” while calling it

“an ‘ask for’ from customers.”

“Nobody ever complains about it,” wrote

a respondent.

Th e Altima was also commended for its re-

liability, called “the least trouble of any vehicle

we have owned or leased for the fl eet.”

9. (TIED) CHEVROLET MALIBUTh e Chevrolet Malibu garnered style points,

in addition to its overall cost to operate and

reliability. Th e Malibu was also named for

its “car group fl exibility.”

“It’s a mid-sized car that suits almost ev-

eryone’s needs, and made by a great brand,”

wrote one respondent.

The Getaway CarTh e Dodge Charger did not make the top

10, but was praised because “Th ey rent as

soon as they hit the ground.” Others praised

its “high profi t margin.”

However, one respondent is thinking twice

before purchasing them again with a more

powerful engine. “We were requested by the

Newark Police to stop purchasing Chargers

with Hemis,” he wrote. “Th ey couldn’t ‘catch’

them. Needless to say we lost a few.”

The Write-Ins and Noteworthy Comments

We chose to cover only high-volume se-

dans for this survey to limit the number of

choices (35 models) and prevent informa-


Anointed as “a classic rental car,” the Ford Taurus was chosen for its low cost to operate and “bulletproof ” reliability.

The model’s longevity was a plus. The reborn Taurus was praised for its styling, performance and overall quality.

FORD TAURUS CIRCA 1990

2011 FORD TAURUS


tion overload. Th erefore crossovers, SUVs,

pickups, luxury cars and exotics were ex-

cluded from the list.

However, that did not prevent respon-

dents from choosing vehicles from those

classes as write-in candidates.

Small SUVs and crossovers were noted for

their versatility. Th e Ford Escape was nomi-

nated for its “Great functionality for custom-

ers. Good room for adults. Rents well as an

SUV, mid- or full-size car with customers

happy to accept it.”

Th e Buick Rendezvous was praised be-

cause it “Functions as a car or an SUV, priced

comparable to cars, inexpensive to upgrade

customers and great resale.”

Th e Ford Mustang collected several write-

in votes. “Everybody likes this car,” wrote

one respondent. “It makes [customers] feel

young and it is not that expensive, so custom-

ers think they are getting a bargain.”

Two hailed the Ford Mustang Shelby GT,

which is available exclusively through Hertz:

“As a car guy, this was the pinnacle of rent-

al cars”; “If you have driven one, you don’t

need to ask the question!”

Other write-ins included long-gone—but ap-

parently not forgotten—models. One operator

called the Dodge Aspen of the 1970s “indestruc-

tible,” while another voted for the Dodge Dy-

nasty, saying “[It] was probably the best ‘work-

horse’ of the early 90s fl eets and very popular

with the general public at that time.”

Nominating the fi rst-generation (1970-

1972) Chevrolet Monte Carlo, one opera-

tor wrote, “What else? Resale value, resale

value, resale value!”

One called the 1977 Pontiac Grand Prix

“the coolest drive ever.”

And then there is this evaluation of the

Dodge Aries, which puts the job of the car

rental operator into perspective: “I lived to

see the face of young hot rodders, who were

ready to tear up my rental car over the week-

end, when I handed them the keys to this pale

green four-door, four-cylinder Dodge Aries,

that did zero to 60 in three minutes. Th ank

you, Dodge, for keeping my fl eet safe from

the weekend warriors.”


• AUTHORIZATION CHECK LIST •

FURTHER CUSTOMER CHANGES ON THIS PROOF ARE CHARGEABLE.

Please fax this proof back by ______________ on_________________________.If not received by the above date, the ad will run as is.Thank You!

BOBIT BUSINESS MEDIA • 3520 CHALLENGER ST., TORRANCE, CA 90503 • 310-533-2400 • FAX 310-533-2501

Signature________________________________________________________________ Date_____________________

URGENT ADVERTISING PROOF

Proudly Serving the Southeast United States!

ARN1107courtney-R.indd 1 9/3/09 9:57:40 AM

One operator praised the Dodge Aries “for keeping my fl eet safe from the weekend warriors.”

DODGE ARIES



products & vendor news

Check out these companies and many more on the exhibit hall fl oor!

TML Information Services offers DriverCheck, a

risk management solution that enables RACs to query a

customer’s offi cial driving record within the time it takes

to get a credit authorization, analyze it based on a pre-de-

fi ned rule set, and obtain a safety based rental decision

consistent with good risk management practices. The pro-

gram includes four phases of vehicle monitoring and train-

ing that work to protect assets and minimize liability. For

more information, call (770) 916-6700 or visit www.driv-

ercheck.net.

ARBOC Mobility offers a low-fl oor paratransit bus called the Spirit of Mobili-

ty. The bus is designed for easy entry and exit through the 41-inch clear door open-

ing and allows for one step entry into the passenger area, eliminating the standard

step entry application. The LP Model also offers the ability

to add a ramp, which is compliant with the Americans with

Disabilities Act and can meet all non-ambulatory passen-

ger needs. The Spirit LP offers confi gured perimeter fl oor

plans with up to three wheelchair positions. For more in-

formation, call (866) 953-5555 or visit www.arbocmobili-

NS Corporation’s Mini Express Wash is an automat-

ed wash system that’s suitable for any fl eet size. A small pad, a

garden hose and electricity are the only things needed to be-

gin washing cars with the system. The company’s patented

Lammscloth and Soft Scrub combination is also included to pro-

vide a thorough wash without damaging clear coats or paint fi n-

ishes. Other system features include hose activation for both ma-

chine and rinse, a built in pre-soap applicator and a built in wax

applicator. For more information, call (800) 782-1582 or visit

www.nswash.com.

ARNHB11products.indd 23ARNHB11products.indd 23 1/24/11 2:24:15 PM1/24/11 2:24:15 PM

http://www.nswash.com

http://www.driv-ercheck.net




products & vendor newsVidTroniX specializes in direct thermal printers for

the aviation and travel industry, with services including

manufacturing, maintenance, design and parts supply. The

three models presently available are the ATP 3 Travel

Document Printer, the ATP MAP Travel Document Print-

er and the ATP RFID system. Currently, VidTroniX print-

ers are certifi ed with Amtrak, ARINC, AirIT, SITA, Ultra

and IBM. VidTroniX has supplied more than 70,000 print-

ers worldwide since 2000 and more than 9,000 thermal

printers in 2008 alone. For more information, call (913)

441-4124 or visit www.vidtronix.com.

Bluebird Auto Rental Systems recently upgraded its

RentWorks software to electronically capture a renter’s sig-

nature with a signature pad. Before the contract is printed, a

“script” is displayed to the renter with legal text for coverages,

prepaid fuel, etc., which the renter then initials on the pad. The ini-

tials and signatures are then printed directly on the laser-based

form. This module is included as a feature of Service Pack B9

for version 4. For more information, call (800) 304-5805 or visit

www.barsnet.com.

On The Move provides vehicle rental programs that include rent-

al insurance and ancillary products, such as forms and rental software.

The programs currently available are the standard car rental program,

the members’ car sharing program, and the members’ truck sharing pro-

gram. On The Move also offers customizable graphics for vehicles, truck

rental software, Zero Base advertising and various types of roadside as-

sistance. For more information, call (800) 645-9949 or visit www.onthe-

movetrucks.com.

Linear Logic’s new Digital Fuel Meter is a low-cost, easy to

install and user-friendly device that directly measures how much

fuel a customer actually uses. The device also is easily transferable

from vehicles leaving the fl eet to those coming into it. Installa-

tion requires plugging the device into the OBD2 connector under

the dashboard, standard on 1996 model year and newer cars and

light trucks, and pushing a few buttons to set up. To determine

fuel usage, read the DFM at the beginning and end of the rent-

al period (along with the odometer), perform the correct sub-

tractions and determine fuel use to 1/100 of a gallon or liter. For

more information call Ron Delong at (888) 433-5664.

ARNHB11products.indd 24ARNHB11products.indd 24 1/24/11 2:24:18 PM1/24/11 2:24:18 PM

http://www.vidtronix.com

http://www.barsnet.com

http://www.onthe-movetrucks.com




ad index

Bluebird Auto Rental Systems .......... 800-304-5805 ................barsnet.com .................................C2-1

Car Rental Show 2011 ....................... 800-576-8788 ................CarRentalShow.com ................ 26-27

Courtney Leasing, Inc. ........................ 407-438-0083 ................courtneyleasing.com .......................22

Thrifty Car Rental ............................... 800-532-3401 ................thrifty.com ........................................11

Lancer Insurance ................................. 800-782-8902 x3027 ....lancerinsurance.com ......................C3

PurCo Fleet Services, Inc. ................. 888-PURCO 88 .............purco.com ................................... 3, C4

TSD Rental Management

Software ................................................ 800-743-1200 ................tsdweb.com ............................... 14-15

COMPANY PHONE WEBSITE PAGE

The Advertisers’ Index is provided as a courtesy to Auto Rental News advertisers.

The publisher assumes no responsibility for errors or omissions.

www.autorentalnews.com

Vice President & Group PublisherSherb Brown — (310) 533-2451

Executive EditorChris Brown — (310) [email protected]

Senior EditorJustina Ly — (310) [email protected]

Art DirectorArmie Bautista

Production ManagerBrian Peach — (310) 533-2548

Subscription Inquiries(888) 239-2455

ChairmanEdward J. Bobit

President & CEOTy F. Bobit

Chief Financial Offi cerRichard E. Johnson

Editorial ConsultantHoward Rauch

ADVERTISING MANAGERS

Associate PublisherJoni Owens — (310) [email protected](310) 429-9659Fax: (310) 533-2503

Great LakesRobert J. Brown 1000 W. University Dr. Ste. 209Rochester, MI 48307(248) 601-2005 Fax: (248) 601-2004

Printed in the USA

All statements made, although based on information believed to be reliable and accurate, cannot be guaranteed and no fault or liability can be acceptedfor error or omission.

®

acra

ARNHB11adindex.indd 25ARNHB11adindex.indd 25 1/24/11 2:56:51 PM1/24/11 2:56:51 PM

http://www.autorentalnews.com




Produced by Bobit Business Media

NEED A HAND? 2011 Car Rental Show (CRS) will give you, the independent or franchised car rental operator, manufacturer or industry professional, the tools you need to take advantage of new opportunities to survive and grow in this ever-changing economic landscape. Jam-packed with education, information and networking, the Car Rental Show offers take-home value for those in all facets of the industry. Clear your calendar March 8-9 and join us in Las Vegas!

”“What a great networking

opportunity! All the parties were there; customers, dealers and lenders.

~ DAVID FUNSTON, PRESIDENT, FUNSTON FLEET SERVICES, INC.,

RIVERSIDE, CA

Media Sponsor

For More Information, Visit www.Car R

In conjunction with

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http://www.Car

Your affordable, value-packed conference pass gives you the once-a-year opportunity to immerse yourself among car rental industry professionals in the exciting atmosphere of Las Vegas!

You’ll enjoy…

Register Now!

r RentalShow.com Or Call 800-576-8788

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01-0

4.11

… And Seasoned Car Rental Industry Insiders’ Keynotes will Energize and Inspire:

The 2011 Car Rental Show’s Innovative Session Topics Like These Help You Maximize Profi ts:

JACK FITZGERALDFitzgerald Auto Mall and

Rent-A-Wreck

LARRY DE SHON Executive Vice President

of OperationsAvis Budget Group, Inc.

Five Profi t Boosters and Five Profi t Busters of • Incremental Sales

Profi t Making Ideas to Use Today•

Turbo Boost Your Rental Car Operation: Secrets • to Running Your Rental Operation at Maximum Effi ciency and Profi tability

High Risk, High Reward: Renting Exotics•

Over • 6 Hours of Networking Opportunities and Exhibit Hall Time.

11• Educational Sessions - Which Include 2 Keynotes, 4 General Sessions and Your Choice of 5 Concurrent Sessions.

An Exhibit Hall Full of Products and Services Your Business Needs to Thrive.•

2• Networking Receptions, 2 Breakfasts and a Lunch.

A Chance to Win Great Prizes in our Room Block Raffl e.•

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ARNHB10lancer.indd 1 2/3/10 10:16:12 AM

The program for the 2011 Car Rental Show, taking place

March 8-9 at the Las Vegas Hilton, has been fi nalized. Here

are further details.

Car Rental and TechnologyTh is year’s opening keynote speaker, Larry De Shon of Avis

Budget Group, will discuss how technology is not only chang-

ing car rental processes, but also changing the traditional busi-

ness model itself. De Shon’s address, titled “Rethinking Car Rent-

al in a New Era of Technology,” is scheduled for Tuesday, March

8 at 1:15 p.m.

De Shon will guide car rental operators on how technology is

providing new opportunities for the industry, but with these op-

portunities come new challenges in areas such as PCI compliance,

customer information security, fl eet safety and environmental reg-

ulations and standards. Will you be able to harness technology to

avoid the potholes and better your business?

De Shon, executive vice president of operations, oversees all

domestic car rental operations as well as quality assurance and

fi eld security for Avis and Budget. Prior to joining Avis Budget

Group, De Shon was senior vice president of airport operations

at United Airlines Inc., leading an organization of 23,000 employ-

ees in 29 countries.

The New NormalAutomotive industry entrepreneur Jack Fitzgerald will deliv-

er the closing keynote address, scheduled for Wednesday, March

9 at 4:15 p.m.

Fitzgerald’s keynote, titled, “From Bailouts to Cash for Clunk-

ers: the New Normal in the Car Business for Dealers and Rental

Operators,” will examine today’s issues by drawing on his more

than 50 years of experience in the auto industry.

Fitzgerald will touch on the upheavals of the last several years

and how his organization has dealt with the changing landscape

of the car business. Fitzgerald will present his unique perspective

in the context of a franchised dealer, a retail car rental operator

and a franchisor leading a car rental system.

Fitzgerald owns and operates 15 car sales locations and 35 man-

ufacturer franchises in Maryland, Pennsylvania and Florida, as well

as Mid-Atlantic car rental company Nextcar. In 2006, he acquired

Rent-A-Wreck of America and sister company Priceless Car &

Truck rental, the franchisor of more than 200 car rental locations

across the United States and abroad in Scandinavia.

Sustainability NowIn a special Wednesday morning breakfast session, Lee Brough-

ton of Enterprise Holdings will highlight “the triple bottom line”—

global economic, social and environmental sustainability.

Broughton, who heads up corporate sustainability at Enterprise

Holdings, will address the need for the car rental industry to devel-

op a sector-specifi c position on sustainability reporting and trans-

parency. He will discuss how car rental companies must embrace

new, clean fuel and engine technologies to help ensure that the pas-

senger vehicle remains relevant. As well, the industry must work

together regarding sustainable best practices before environmental

regulations and legislation mandate the industry to do so.

International Operators SeminarTh e International Operators seminar is back by popular de-

mand! Hosted by Angela Margolit of Bluebird Auto Rental Systems,

this pre-conference, two-hour session is scheduled for Tuesday,

March 8, from 10 a.m. to noon. In this jam-packed, hands-on ses-

sion, CRS international attendees will learn about the latest trends

and techniques to implement in their operations.

Margolit will present the newest technology for going mobile,

including signature pads and handheld devices.

Roy Bricker, COO of Element Payment Services, will discuss

how important new security mandates in the credit card indus-

try will aff ect car rental. In the U.S., new Payment Card Industry

Data Security Standards (PCI DSS) infl uenced the development

of technology solutions to ease the cost and complexity of com-

pliance. Outside the U.S., countries including the U.K. and most

recently Canada are now mandating chip-and-PIN technolo-

gy at the point of sale. Bricker, who was involved in the develop-

ment of smart cards (chip and PIN) at MasterCard, will demon-

strate devices.

Joe Knight, vice president of business development for Fox

Rent A Car, will introduce Fox’s new affi liate program, which

gives overseas operators the opportunity to align with this grow-

ing discount brand and off ers them access to the Global Distri-

bution Systems (GDS).

Where and how do you source top-notch talent these days?

Join Jim Davis and Tom Sabol of Leslie Saunders for a session full

of hiring and training tips. Participants will take home ideas on

fi nding candidates for the job, hiring the right team members and

training them for success.

Visit www.carrentalshow.com for further details.

Technology, sustainability and “the new normal” will take center stage at this year’s annual industry conference.

BY CHRIS BROWN

Program Finalized for 2011 Car Rental Show

rent ALERTFOR UPDATES, VISIT WWW.AUTORENTALNEWS.COM


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http://www.carrentalshow.com

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During these tough times, we’re here for you.

Recovery Specialists for the Vehicle Rental Industry

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