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Car rental costs will rise, warns Avis
Avis has warned corporates and fleet operators that car rental costs are likely to rise during 2008 and into 2009.
The company says a combination of rising car costs from manufacturers, the strong Euro, the economic slowdown and falling used car prices is likely to force rental suppliers to pass on their increased costs to customers.
“Car costs to rental companies have risen considerably over the past 12 months and look set to rise further in 2008,†explained Paul Hainsworth, Avis fleet director.
“In addition to the credit crunch restricting demand for new cars, the weakening of the pound sterling against the Euro, the currency of choice for many manufacturers, is significantly reducing margins for car makers.
“They are already increasing their prices and may look to further restrict supply to the rental market, which some car makers are already doing.â€
The situation has been made worse by the recent Budget, which introduced new Vehicle Excise Duty bands for new cars which rental companies will have to pass onto customers during 2008 and 2009.
“We will work with our corporate customers to find ways of improving efficiencies within their rental agreements which will help counteract any rises.
“Avis is committed to keeping its prices as low as possible, but circumstances beyond our control will continue to put severe pressure on the entire rental industry,†added Hainsworth.
By Bev Fearis
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Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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