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Why Are So Many Rental Car Companies Offering Exotic Cars?

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author photo by Doug DeMuro September 2016

Hello, readers of Oversteer, and welcome to your favorite Friday fix: Ask Doug, wherein you ask Doug a question, and he answers it using a lot of opinion and the occasional fact stolen from a Wikipedia article.

If you'd like to participate in Ask Doug, just send me an email with your question at OversteerDoug@gmail.com, or send me a question on my Facebook page. I can't wait to hear from you and also scoff at your absurd inquiries.

This week's letter comes to us from a reader I've named Johnny, who told me he lives in Massachusetts. For those of you who don't know, Massachusetts is "The Spirit of America," according to their license plates, although I personally am not sure if this is true, because I have been there several times and the only thing I felt was cold. Anyway, Johnny writes:

Hi Doug!

My name is Johnny, and I'm from Massachusetts. My question for you today is why are rental car agencies offering so many exotic cars now? I went to go book a boring car from Hertz for my upcoming trip, but before I got to the Malibus and Camrys, cars like the Infiniti QX80 and the Mercedes E63 popped up. Can you tell me why rental car agencies want to rent cool cars now?

Thanks,
Johnny

Johnny raises an interesting question, because this is something I've noticed, too. Why is it that virtually all rental car companies now have an exotic fleet? It used to be, you wanted to rent a car, you made a reservation for a full-size car, you showed up and BAM! Chevy Aveo. Every time. Need a car to carry skis? BAM! Chevy Aveo. Need a car to haul your Shetland pony? BAM! Chevy Aveo. Need a car to transport a xylophone? BAM! Chevy Aveo.

But, here's the thing, this hasn't been the case recently. What's happened in recent years is half the Hertz lot appears to be Volvos.

So naturally, I've wondered the same thing as you, Johnny, and here are the two things I've deduced. Thing No. 1: Rental car companies do this because people want them. I really think there's a large contingent of humans who show up at Enterprise and won't drive anything less than an Infiniti QX80. They feel like a Chevy Aveo is the car driven by "the help," and they make this opinion loudly known as they board the plane early, since they're members of the Elite Platinum Gold Rewards High-Speed Aardvark Club, which ensures their bags will arrive at the baggage carousel less damaged than anyone else's bags.

Thing No. 2: I think luxury car companies aren't as discerning as they used to be. BMW, Mercedes, Lexus and all these other companies are locked in an all-out sales war, and they'll do anything to win this war, even if it means throwing a couple of E63 AMGs to Hertz at cost. After all, five sales is five sales, and that's five more than BMW got that day, and I bet this is cause for big celebration in the Mercedes-Benz office that includes at least one Shetland pony.

Obviously, the rental car companies have skin in this game, too. I bet these things just ooze profit.

Imagine it: You, the rental car company, purchase a BMW M5 for something like $90,000 and then sell it a year later for something like $75,000. In the interim, you're charging people like eight hundred dollars a day for it. If you lose 15 grand in depreciation over the course of a year, you only need to have to rent it for three weeks to cover it.

Of course, these numbers are made up, because I have no idea how much the M5 would depreciate in a year, and I have no idea what the rental car companies charge for it. But I can tell you this: They make a lot more money on it than they used to make on a Chevy Aveo. Also, I have no idea what a Shetland pony is.

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This image is a stock photo and is not an exact representation of any vehicle offered for sale. Advertised vehicles of this model may have styling, trim levels, colors and optional equipment that differ from the stock photo.
Why Are So Many Rental Car Companies Offering Exotic Cars? - Autotrader