As if it wasn’t bad enough that gas prices are going through the roof.

Going on a road trip just became more expensive for those people who would rather rent a car than stack the mileage on their own vehicle.

According to recent article in the Wall Street Journal, rental-car companies are raising rates by as much as 20% as their relationships with car suppliers deteriorate.

Historically, rental companies have maintained close ties with auto makers—buying vehicles at a discount and always having a supply readily available. But, now, automakers are pulling back on their agreements with rental-car companies in an effort to shed the “fleet car†stigma that has surrounded some models and slowed showroom sales. They are raising the prices for the rental car companies and not offering the newer cars.

Fleet car stigma is a well-known phenomenon in the automotive industry. Historically, auto makers flooded rental fleets with vehicles in order to boost their sales numbers. However, rental cars are a double-edged sword for the auto industry. On the one hand, putting a car into rental fleets gives consumers exposure to the product. If they like the car, they may decide to buy it. On the other hand, many consumers will say “That was a nice car, but I don’t want to spend that much money to buy a rental car.”

The higher costs for new vehicles, coupled with a boom in travel, has resulted in a dwindling supply of vehicle at major car-rental companies, such as Avis, Dollar, National and Hertz. That’s led to car rental companies increasing prices across the board.

In fact, prices are typically up by 5% to 15%, leaving vacationers with a big dent in their pocketbooks. Depending on your rental schedule, this might add up to an increase of $5 a day or $20 week.

There are still ways to score a deal but this means taking your time to research and compare prices. Enterprise Rent-A-Car, for example is running a summer special of $20 a day in Denver, Co. and $15 a day in Orlando, Florida.

August 4, 2005