CHOICE membership

Rental Car Price Gouging

I’ve accepted that Car Rental companies charge a relocation fee with one-way rentals, but I was gouged by Avis and Budget in the USA twice within weeks, once for $300 from Lewiston (ID) to LAX (CA), and for $100 from Seattle (WA) to Portland (OR).

The gouge is quite simple and straightforward. Rent a car in California and drop it off in Idaho and thank you, that’s a $300 (US) relocation fee and charged to the renter, but when the next renter wants to go the other way i.e. returning the car to California, they charge the same $300 for doing what they’ve already been paid for previously.

Not wanting to be an unwitting mule for them, I asked for an Idaho plated car so at least I’d get my money’s worth but sorry - none available. Same went for a rental from Seattle to Portland, where they’d switched my selection from a sedan to an SUV with Oregon plates. Sorry, no other cars available.

3 Likes

How do you know the car will go back to its origin?

I understand that car rental/hire companies have a atock (cars available for renting) based on a number of factors including major events, seasonality, historical trends etc.

If they lose a significant number of cars from one to another city, it can impact on their ability to service future demand.

In Australia, they do relocate vehicles. Many years ago when at university, quite often we would get messages like…does anyone want to go to Sydney…to return a hire car…only pay for the fuel. Always thought about it but never had the money for the stay and travel.

If the company needs to reloate, it can come at some cost (e.g. back of a truck or two cars and employees needed to take a car back to origin).

While the fees can be steep, I can see why they are charged. Are they reasonable, don’t know but labour costs could be significant where relocations are required.

Maybe an option in the future is to see whether a specific car company has any vehicles which need to be returned to origin and see if the hire companies can do a deal with fhe proposed hire. This means dealing with them directly rather than through a second booking party.

3 Likes

Rental companies charge drop off fees based on supply and demand in each location. For example if there are too few cars in Lewiston ID and too many in LAX they add a disincentive to cover what becomes their inventory problem.

Sometimes there is no fee if, for example there are too many cars in LAX and too few in ID and you are picking up at LAX and dropping off in Lewiston ID because you are effectively helping them. Same with any city pair. The fee will vary with the supply and demand of cars at each location regardless of where each vehicle is registered.

FWIW most often within a metro area there is no added drop off fee to pick up in a suburb where the rental rate is cheapest and drop off at the main airport.

5 Likes

Many years ago, rental companies would even provide vehicles for free if they were to be used one-way from where they were to where the companies wanted them to be.

A person who lived in Cairns and was working in Townsville at my workplace used to regularly use them to go in either direction for a weekend at home.

At least up untl he rolled one of them.

3 Likes

So that’s why Hertz UK charge £75 to collect in Central London and return to Heathrow Airport?

Yes, they did have a car they wanted returned to its origin state. It was allocated to me.

Having collected a relocation fee from the previous renter who collected in CA and left it it ID, they should not have charged a second fee, but they wouldn’t give me an ID plated car when I asked for one - I figured if they wanted a $300 relocation fee then, I wanted a car they would genuinely have relocate.

Returning to the same state as the rego plated can still incur a relocation fee as the vehicle may not be returning to the same city or office the vehicle is based at. In Australia, relocation fees can be charged for vehicles which aren’t returned to the same base and may be relatively close by. Examples might be Melbourne and Geelong, Perth and Fremantle or Brisbane and Ipswich.

Just because you are returning the vehicle to the same state as the rego plates doesn’t mean it doesn’t costs the business money to return it to its base site (as it could be some distance to the base within the same state and with inconvenience to the rental car operator).

As indicated above, if one asks if a rental company has any cars which need to be returned to a another of their agencies/sites when booking, then it may be possible to get the relocation fee waived…such may only be possible to do shortly before the rental occurs. Booking a car and then turning up expecting the relocation fee is waivered because the vehicle is returning to the same state as the rego plates is not the same.

If there are too many cars at Heathrow and not enough in the CBD it would reflect the normal pricing. It probably also depends on the relationship of the airport to the city area and how each company marshals their
vehicles.

3 Likes

You’re either not listening (or you work for Budget)!

The vehicle I rented in Lewiston ID with CA plates would have cost the previous renter a $300 relocation fee. In other words, the cost to return to CA had been recovered before I took it. Even if it the next renter didn’t return to it’s origin, the relocation fee had been paid., so it’s irrelevant whereabouts in CA it was returned to. It wasn’t returned twice, so explain why Budget should gouge a second $300.

2 Likes

One answer could be they are greedy, another could be that they are inept, another could be that it was a clerical error, and even another because they can. None seem very satisfactory answers though do they?

2 Likes

How do you know…did Budget confirm this with you or are assuming that a previous customer hired with the same contract and conditions as yourself…and returned the car to where you collected it

How do you also know that the vehicle hadn’t already had one relocation back to where you picked it up. It is possible that Budget had moved the car back from another state or location to Lewiston ID. They could have moved it part of the way back to CA knowing that you had a booking that would take it even closer to its base site. Doing such could be part of their logistics plan for vehicle location management…and could be plausible to save them the hassle of a ID vehicle now appearing in CA.

Then the extra relocation fees you paid could have been used to return the vehicle from your drop off location to its base site.

I wouldn’t be jumping to conclusions based on what you think may have happened as there are other reasonable and plausible scenarios. BTW, I don’t work for a hire car company or an advocate for them…and have mentioned elsewhere in this forum recent issues with Europcar.

I also know that some corporate customers may not pay same rates or fees as private hirers as they have special arrangements due to the number and value of the hires they make. The vehicle could also have been rented by a coporate customer with different arrangements to your own.

I wouldn’t be assuming what the car hire companies do unless you have some evidence indicating such. One also has the option to shop around with different hire companies to find one with hire conditions, rates and fees which are more acceptable, if and where they exist.

Edit: it is also possible that Budget relocated a CA plated car from CA especially for your booking…so that the car could be returned to CA. This could have been done for a range of reasons (no cars in ID which could fulfil your booking, local laws about car hire, insurance cover etc). As such Budget had incurred the cost of this relocation and is why you paid the relocation fee.

I am sure there are other scenarios as well, such as that you have assumed. All are equally as plausible.

phb

[redacted] having endlessly and vigorously suggested multiple reasons why my gouging complaint is not valid, including some which are fanciful (local laws about car hire, insurance cover etc). I’ll stick to the KISS principle. The Lewiston operator had plenty of ID and WA plates which they declined to offer when requested, and insisted on the CA plate. End of story.

Sorry to hear about your frustrating car hire experience. Perhaps this type of expense should be built in to the cost, due to possibility of consumers getting gouged? Either way, it’s yet another tale of problems with hire cars - time and again we hear about consumers getting burned by rental car companies.

Don’t be put if people want to examine the details at hand, many of us on this thread have had our own personal bad experiences. I’ll be sure to forward your experience to our investigations team for inclusion.

2 Likes

After mentioning this thread to a friend, he indicated that car rental companies still relocate cars around a state/country (usually to a location where there is a demand for a vehicle type but not necessarily the vehicle to supply the demand as it is sitting at a low demand location). For longer distances, some rental car companies advertise what vehicles they wish to move (origin to destination). One such website where advertisements are placed are…

It is also worth noting that car rental companies offer a vehicle for a nominal daily fee (say $1 day which may be so that a formal contract is entered into with the relocating customer) and often pay a fuel allowance for the relocation (see relocations in Australia as an example).

I suspect that the costs (mileage and fuel) are borne partly by the previous customer which did not return the car to the same location as its origin. Some of the fuel allowances are significant and run into hundreds if not close to a thousand dollars. It does show that relocation of a vehicle, even without labour costs, can be a significant cost to a car rental company.

They also give a duration (days) for the relocation to occur…with some allowing additional rental days as well (possibly until the day of the next known rental pickup).

I was not aware that such relocation opportunities existed still today, and may be of interest to those who like to have a spontaneous holiday somewhere (it appears that relocation offers are only listed in days/week before relocated vehicle is required).

One downside is one needs to find return travel at one’s own expense.

2 Likes