Renting for Special Events

If your just going on a standard vacation, or a normal business trip, typically you can get a car with little difficulty. The only question is "what will it cost?"

But when it comes down to special events, its a much more difficult process. Some events (Olympics, Super Bowl, Pro Bowl, Major College Football Bowl Games, Basketball Tournaments, Famous Festivals and parties) simply are so big that even while booking almost a full year in advance the prices are still sky high, let alone trying to get a car closer to the event. It doesn't matter if you are in town for that particular event, or not, your stuck in the same unwieldy, expensive mess.

So what's a guy to do? I need a car, but how can I get one? The honest truth is there is always cars available. But i'll get to that later. Right now I want to focus on how to get the best price in those situations. In order to do this, we need to discuss how the car rental agencies set their prices.

Every agency, in fact every travel related company is familiar with a term. This term is called "yield management." In a nutshell, this is how they RAISE prices. And lower them, but the purest version of this is all about raising prices. Here is an exxagerated example for demonstration purposes.

A particular car company has 1000 cars on its lot available for rent on a particular day. The company sets a base rate of, lets say for easy math, 25 dollars per day for that particular car class. Based on historical records, they can predict what the final rental demand will be on a specific day as much as 4-6 months in advance. After receiving the estimate, they begin to "yield" up or "down" the price according to match the expected number of available cars for any given day.

in our example, lets choose Forth of July. Independence day is typically a busy travel period. As a national holiday, many people take little weekenders, or escape trips around the Fourth. With the forecast data, the trendline is showing that we will rent around 850 cars at a particular car class for that day. That means we have around 150 car rental days to grow for that period. So a local manager may opt to reduce the base rate of $25 to $22 per day for the same period. Also, he/she may opt to put in sales for weeklong rentals starting several days before the 4th. Each decision would have an effect to hasten the pace of renting cars in that particular locale. Once the Forecast is on target for 1000, then they raise the rates to $25.00 or more to slow it down again.

This also works in the other direction. The Forecast model shows 1400 car demand for the 4th and strong demand for the days before and after. Although they do not HAVE 1400 booked reservations, (actually they may have 650 booked), the projection says that if they don't increase their prices or close down reservations soon, they will be overbooked.

In comes Yield Management at its best. The absolute goal is to NEVER be sold out. If you have one car left on the lot, that car must rent out at 1 million dollars per day. The busier you get, you keep moving the price up and up and up until the the market says "no". The sad part is that there is always someone willing to pay 30-40-50-60 dollars a day more than the last person to guarantee they get a car. So often Yield Management is not enough.

So now that you have a basic understanding of how they set their prices, click the links to the right of my screen (the google ads) for some of the rental car companies that pop up over there. Take a peek and look at what you see. you will see a various list of prices. The Base price as discussed mythically at $25 per day. Here is the basic rule of thumb when it comes to rental cars.


take the MSRP of that car, divide by 1,000. That will equal the "approximate" starting point for every car rental price for that class of car. But as the cars get bigger, the premmium rate increases more and more. Examples...

Subcompact- retail 14-15k Starting price 15.00 per day
compact- retail 14-17k Starting price 17.00 per day
Midsize- retail 18-20k Starting price 20.oo per day
Full size- retail 22-25k Starting price 25.00 per day
SUV- retail 30-35k Starting price 35.00 per day + size market upg ($25.00 per day)

*note- these numbers are for comparison only. When looking at the one week price, these prices reflect the average price per day.

you can use the retail prices formula to "start" your priceline bidding strategy (a blog for another day).



So now that you have a basic understaning of how they price the cars, several theories on how to pick the best price come forward.

1> Mass booking, dollar cost averaging strategy. if you KNOW your going to the "super bowl" and you know that you will need a car, booking a car per week until the prices go sky high is one strategy. Most rental car companies do not penalize you for cancelling car reservations (unlike hotel reservations) but some do. Check the terms of the company your dealing with before you book.

2> Book early. Yes, booking early does work, but too early means you get the "set" price of what they "think" the demand is going to be. Typically about six months out is a good time to start price shopping for specific events, but some places (Hawaii) seem to always book out in tremendous fashion really early around the holidays. When it comes to those locations, its best to book a "safety" reservation first and then go shopping, knowing that if you cannot find a better price, at least you have the backup plan.

3> Walk up. some people are GREAT at yield management, others are not. Booking one really solid but not earth shattering reservation at a company you are comfortable with is where we start with this strategy. Then, on the day of your arrival, put your best negotiating face on and pound the turf. Some companies have misjudged the need on those days by wide margins. If so, they have "Cars Available" signs everywhere with special rates to try and capture on the last second foot traffic. Keep your "safety" reservation (make sure your aware of its cancellation policy) and play one location off the other...." National just offered me 30 a day, can you beat it?"
Whomever gives you the best deal, wins.

Its VERY important to know that agents get comissions on the walk up traffic they bring in. So they are more likely than managers to "drop the rates." Agents have tremendous ability to play with prices. As an agent I sold a subcompact car for 80 dollars a day, and the very next customer "because she was very cute" got the 20 dollar rate and they both got the same car.


May the force be with you. Ask questions and I will answer them. Or visit my website at carrentalinsider.com