You may have to make do with that not-so-fresh-feeling next time you rent a car.
Automotive News (Subscription required) via Motor Trend: Struck by the same credit challenges facing consumers and dealers, rental car companies are drastically reducing fleet orders from automakers. Rental agencies are also having difficulty finding dealerships willing to purchase their off-fleet rental cars, according to recent reports.
Citing a trade publication, Automotive News reports fleet orders by rental companies fell by roughly 400,000 units in 2008, from 1.9 million to 1.5 million vehicles. Robert Barton, president of the American Car Rental Association, attributes the drop to the recession and subsequent cutbacks in business and leisure spending.
According to the report, used car dealers, which normally purchase rental cars after service life, are having difficulty securing credit to do so. As a result, an increasing number rental cars remain unsold at wholesale auctions. This problem is two-fold for automakers: Those located in Detroit traditionally rely on rental companies to purchase left-over stock, but on the flip side, automakers see a drop in residual values when rental companies buy large fleets and flood the used-car market at the end of service. Meanwhile, the nation’s largest automotive rental agency, Enterprise Rent-a-Car, will reduce its 2009 purchases to around 400,000 vehicles — roughly half of order volume for previous years.
Right now the larger problem is the increasing number of vehicles sitting at used-car dealers, wholesale auctions, rental car lots, and automaker back lots. Unless credit restrictions lighten soon, the stockpile will only grow larger.
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