October 10, 2008

The car rental industry is a very competitive one, and so rates for rentals change fast and sometimes look like they change without rhyme or reason on the surface. To make sure you get the best rate possible, it helps to be familiar with how rates work and keep a few things in mind when making your reservation.

The quick rate changes at rental car agencies are due to the fact that the entire process is based mostly on supply and demand at each rental location. The rate strategy widely employed by these companies is known as “yield management.” It uses a computer system that automatically adjusts rates based on the number of cars available at any given time at each rental location. This is why reserving in advance will help in keeping your car rental rates down, since the rates and prices automatically adjust for availability of the different vehicles, and when they start running low on a certain class, the rate goes up. When you are making a reservation, you are actually usually just reserving a rate, not the car itself, as car availability can change. This could mean you end up with a nicer car for the lower rate you booked, if the original car is gone when you arrive, but you must book in advance to even get a chance for a deal like that.

Rental care rates will also vary wildly at the SAME rental car location, even in one day. A weekly rate at a location may run you 100 dollars more if you book it in the afternoon instead of that morning, because of that supply and demand structure. If your destination is in a high travel area or tourist area such as Las Vegas, Orlando, Los Angeles, or other similar vacation spots, then this is something you must really remember, because those are the places you are most likely to get caught with a crazy rate fluctuation. Again, the key is to book in advance!

Renting a car for your trip does not have to break the bank, especially if you keep the yield management structure in mind and remember to book early. Even if you must make a last minute reservation for a spur of the moment trip, at least call it in on the way to the airport instead of just walking up to the desk when you get there, because the rate will likely still be lower that way.

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