A good time to be a car-less driving non-American in America
March 29, 2009 7:35 AM   Subscribe

I'm trying to hire a car for two days in the US, and have found it's far cheaper for me as a Brit (US$40), than if I was an American (US$120). Is there any particular reason for this? Taxes can't be *that* huge a mark-up, surely?
posted by almostwitty to Work & Money (13 answers total)
When you say, "hire", you mean rent a car, not hire a car + driver, correct?

I think a lot of it has to do with insurance- it completely bonkers in some places here. There's even a significant difference in renting, for example, as a resident of Manhattan vs. Brooklyn here in NYC.
posted by mkultra at 7:39 AM on March 29, 2009

Taxes are certainly a part of it, but you should also make sure you're comparing apples to apples. The last few times I've had to rent a car, the price has varied TREMENDOUSLY depending on factors like how soon I needed the car, the dates I wanted to rent on, and which type of credit card I presented.

Calling on a Tuesday to get a car from Friday through Monday using American Express? Eight bucks a day (and I got an upgrade to a nicer car than I asked for!). Calling on a Thursday to get a car from Friday through Sunday using Visa? Would've been forty bucks a day.

Maybe your American counterpart has bad credit, or is under 25. Or maybe when you book from the UK you're using an agency that gets a preferential discount with its American partner. Etc.
posted by bcwinters at 7:48 AM on March 29, 2009

The price you quote for an American sounds extremely high to me, unless you're renting a luxury car or something. Did you get the quotes at different times? In my experience the price goes up and up the closer the current date is to the pick-up date and of course on the pick-up date or the day before it's astronomical.
posted by XMLicious at 7:49 AM on March 29, 2009

If you're renting the car from a European company, those of often brokered wholesale deal (i.e. Europcar or Sixt makes a deal with Alamo or Avis for a certain amount) and you are paying that contracted rate. Making a reservation for the same car through the same US car rental agency may be more due to local market conditions. That is, the location has rented most of its cars for a date, it may cost significantly more than if their lot is full. The same principle is used with airline seats and hotel rooms which is why sometimes vacation packages are cheaper than buying the room/car/flights separately.

For the supplier, having a contracted rate with volume requirements can mean that they'll get a fixed revenue even if the local conditions suck and they can't give the car away. A lot of times these contracts do have different pricing for different times/places/etc, but often times local conditions may cause the prices to spike. Also, note that many of the car rental companies will have corporate rates that never change regardless of the supply/demand.

Car (and hotel and air) pricing is insane with all sorts of rules like mandatory Saturday keeps for the rental. One time I rented a car but due to an emergency I had to cut my trip short. The weekend rate would have been $35/day, but I had to pay $80 for the one day because I didn't keep it on Saturday. I argued to no avail with the local office even though since they had the car back they could rent to someone else. A lot of times the wholesale contracts won't have all these weird restrictions in it which could give you a cheaper rate.
posted by birdherder at 7:56 AM on March 29, 2009

Just so you know, in the U.S. this is usually referred to as "renting" a car.

My first thought was that of bcwinters. What were the parameters of your searches? But it is quite possible that your home address will change your insurance profile greatly as well.
posted by grouse at 7:56 AM on March 29, 2009

$40 a day still seems high. I'd look around a bit at dropping that down, especially if the trip is in advance. Most of the time you can get one from between $20-40 a day with a little break if you're renting it for more than a few days.
posted by devilsbrigade at 8:09 AM on March 29, 2009

Speaking of comparing apples to apples - is your American sample comparison, by any chance, for someone much younger than you? Under-25 folks have a significantly more difficult time renting. Maybe this is true in Britain, too, but I thought I'd mention it in case it was a factor here.
posted by amtho at 8:12 AM on March 29, 2009

Taxes can't be *that* huge a mark-up, surely?

I'm not sure what you mean by this. You pay exactly the same taxes when renting a car here that I would.
posted by oaf at 8:32 AM on March 29, 2009

I am guessing you have a Hertz Gold account. The markdown is considerable when you hire a car overseas. I'm an American who gets a similar rate when I'm in Italy (compared to what Italians pay). My friends there are convinced I must be a relative of Mr. Hertz.
posted by Zambrano at 9:02 AM on March 29, 2009

Response by poster: I put the same details in - over 25 in both cases, for the same time/date/location - at the same time using two different browsers. The only difference was stating my billing address...
posted by almostwitty at 9:15 AM on March 29, 2009

Response by poster: Oh, and the same website. budget.com in this case.
posted by almostwitty at 9:16 AM on March 29, 2009

Insurance is the only thing that makes sense, then, in terms of differing costs. There's also potentially a price discrimination aspect—they might find that Brits aren't willing to pay as much, and so set up their pricing structure so that they don't have to, although this would lead to accusations of redlining. Here is a New York Daily News story from 10 years ago about rental agencies charging different rates due to people's addresses, and claiming it is because of differences in liability costs.

I've found much less expensive deals on Hotwire, and have been able to beat those by using the name-your-own-price feature of Priceline.
posted by grouse at 9:37 AM on March 29, 2009

the name-your-own-price feature of Priceline

Absolutely the way to go for car rental, unless you need to use a certain company or want a specific type of car.
posted by Rock Steady at 1:20 PM on March 29, 2009

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