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  • Car-rental rates are rising

    By Purchasing Staff -- Purchasing, 2/15/2006 7:00:00 AM

    The cost of maintaining new car fleets is rising but business customers are balking at paying higher prices for their rentals. So, to get to the projected 7% increase in car-rental rates, suppliers are adding new fees onto rental base prices.

    Travel-industry experts are making generally robust forecasts for 2006. The reasons for their optimism, they say, include a continuing U.S. economic expansion and the desire of airlines and hotels to make up for several lean years by raising prices and returning to profitability. At the start of the year, American Express Business Travel forecast that car-rental rates would be heading up 7% or higher from 2005 levels. But, already, there is growing reluctance of business travelers to sign-off on higher car-rental rates. So, the rental companies have decided to tighten "terms and conditions" in their basic rental agreements. For example, the rental firms are holding customers responsible for "any and all" loss or damage to rented vehicles—even if its storm damage. The car rental industry is not keen to discuss its new fees and surcharges. But the process, known as "unbundling," was confirmed in a New York Times interview with David Kilduff, the head of car rental procurement for American Express Business Travel.

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