Car Rental Agencies

The history of car rental agencies dates back to only a decade or so after the Model T was introduced in 1908. The young industry, with roots in Chicago, experienced some difficult years during the time of Prohibition. Most respectable people, it seems, associated rented cars with bank robbers, bootleggers, and other unsavory professions. When the 18th Amendment, which had banned alcoholic beverages, was repealed in 1933 by passage of the 21st Amendment, the car rental industry's reputation began to improve. In the 1930s, several railroads systems, from Chicago to New Orleans, joined together to provide automobiles for their passengers. To encourage the burgeoning practice, the railroads gave free advertising to the car rental agencies and free telegraphing services so that passengers could reserve automobiles at their destination. But the industry really took off after World War II when air travel became more common. In today's modern world, about a half-century later, finding an airport without a car rental agency would be almost as difficult as finding the proverbial needle in a haystack. One of today's most well-known car-renting companies traces its history back to 1918 and the first Chicago dealership.

With the proliferation of online reservation travel sites, reserving a vehicle is as quick as one's typing speed and as easy as clicking a computer mouse. Each of the major car rental agencies has its own website and is affiliated with other travel websites. Travelers are often able to reserve airline tickets, hotel nights, and ground transportation all at the same site. Discounts are usually given as an incentive to bundle the purchase into one travel package. All kinds of travel websites offer this one-stop convenience and reservations can be confirmed with a credit card or debit card. Most people are aware of the discount travel websites that offer low prices on airplane tickets and hotel rooms. Consumers can also reserve an automobile on these sites. At least one major airline provides an option on its website for adding hotel and automobile reservations. Taking care of all these elements on one website is convenient and quick, especially if the consumer already has an account or membership with the site. Then the personal and payment information either needs to be entered only once or is already saved in the system. By offering these kinds of services, the travel websites or individual companies build consumer loyalty to their brands.

Of course, it isn't only the leisure market that utilizes the services of car rental agencies. Business travelers are another large market segment for the industry. Corporations and small business can make renting a vehicle more convenient for their employees by signing up with programs offered by some of the major companies. Frequent business travelers can have their preferences kept on file with the car rental agencies that they use. For example, the traveler can indicate a preference for a midsize vehicle that has been designated as nonsmoking. With a membership in the agency's program, the traveler may receive preferential treatment at the car rental counter, perhaps even avoiding long lines or lengthy check-in type procedures. Here again, consumer loyalty is rewarded. Frequent business travelers may earn points that can be redeemed for future rentals. Frequent flier miles and points given for renting vehicles from a certain company almost always stay with the individual traveler even if his company paid for the plane tickets and the vehicle rental expenses. The rewards programs are considered an extra bonus for traveling employees and can be redeemed for personal and vacation use.

Sometimes a person finds herself researching the options at car rental agencies when she hadn't planned on it. For example, some insurance policies make provisions for a vehicle rental after an automobile accident. The insurance policyholder may pay an additional fee for this type of coverage. Depending on the policy, there will probably be limitations on the number of days or the total amount that will be reimbursed for renting a car while the insured's personal vehicle is being repaired. The policy may only be a percentage of each day's rental fee. The best time to find out the details of a policy's rental car coverage is before the information is needed. The policyholder needs to decide if the extra fees are worth the coverage that is being provided. A passage in the Old Testament book of Job says: No mention shall be made of coral, or of pearls: for the price of wisdom is above rubies" (Job 28:18). When financial wisdom is applied to even such details as fees on insurance policies, an individual's economic foundation is strengthened.

A current trend in this industry is that the gas-guzzlers are remaining on the lots of the car rental agencies while the popularity of the compact and economy vehicles is on a meteoric rise. Many consumers no longer view an SUV as a coveted upgrade, preferring instead to opt for a smaller vehicle that gets higher gas mileage. This trend is having an interesting affect on agencies across the country. According to recent news coverage, the agencies are having trouble selling the gas guzzlers in their fleets and also are having difficulty acquiring enough smaller automobiles to meet consumer demand. But the industry will adapt to this current crisis. It's a safe bet that car rental agencies will be around, serving the needs of vacationers, business travelers, and accident victims for a long time to come.