Winning Enterprise predicts rental price rises
25 February 2009
Author: Tristan Young
Enterprise Rent A Car boss Don Moore has predicted a rise in rental costs this year due to the recession seeing car makers cut back on vehicle production.
Speaking at the collection of the BusinessCar Award from Editor Tristan Young for best rental firm 2009, Moore (pictured right), said: "The numbers of cars going to daily rental by manufacturers means vehicle prices for us will go up. Because there's more margin in retail, that's where they will put any money."
However, Enterprise believes its policy of buying cars from car makers, rather than leasing them with a guaranteed buy-back price, has put them in a strong position for 2009.
"We took the hit last year [on residual values] but have retained greater flexibility. Those doing buy-backs didn't have the risk, but they have no flexibility either."
This flexibility means Enterprise can hold onto cars for longer if fewer vehicles are available or demand suddenly increases.
"98% of our fleet is purchased - we're the only rental firm who does that. We don't sell through auctions, but direct to the market. We have 40 employees who sell our cars in regions to approved buyers.
"Each seller has about 25 buyers and they sell small numbers of cars to these people," said Moore.