Paul Hoppe dreads the wait for the keys at the car rental desk. The agent, he says, invariably tries to talk him into switching to a larger, more expensive vehicle and buying costly prepaid gas options and unnecessary insurance.
Mr. Hoppe, an associate professor of accounting at Golden Gate University in San Francisco, says rental companies have been ratcheting up the pressure on him. He recounted a recent experience at the Enterprise Rent-A-Car office at Los Angeles International Airport.
”They told me they didn’t have my requested car size so they asked if I would upgrade,” he said. ”They asked if I wanted the optional insurance, and when I said no, they wanted to know which insurance I had.” After a spirited argument with an agent, Mr. Hoppe said, he managed to drive away without signing up for any extras.
Christy Conrad, a spokeswoman for Enterprise, said: ”It’s never our intent to make our customers uncomfortable.” She said that the company did not condone aggressive sales efforts like the one described by Mr. Hoppe. ”However, it’s in the best interests of the consumer to be well educated when it comes to insurance,” she added.
Other travelers agree with Mr. Hoppe that the sales pitches are becoming more common. Rental companies, which extensively train their employees in the art of marketing high-profit options, are now instructing front-line agents to go after business customers. ”Business travelers are seen as likely targets for these products,” said Cathy Stephens, editor of the industry trade publication Auto Rental News.
Although many of these travelers are elusive — for example, frequent renters with a negotiated corporate rate rarely use the check-in counter — others are not. So-called unmanaged business travelers, who do not work with a travel manager and who bargain-hunt for the lowest car rates on the Internet, are seen as good prospects.
”When you decline the insurance, they pull out these Polaroids of horrific accidents that resulted in thousands of dollars in repairs,” said Ed Kummel, a network administrator in Ashburn, Va. ”Even when I tell them that my credit card will handle all that, they insist that it won’t cover the revenues lost during repair.”
The hard sell should not surprise anyone. Business travel accounts for an estimated 60 percent of car rental companies’ income and is crucial for turning their fortunes around after two years of flat earnings.
The National Business Travel Association expects corporate car rental rates to increase by 2 percent this year. But that may prove to be a conservative estimate. In February, the Cendant Car Rental Group, which owns the Avis and Budget brands, raised rates $5 a day and $20 a week. The move was followed by most of its competitors.
But the real money, as far as some rental companies are concerned, is in the extras. The industry declines to disclose the profitability of add-ons like upgrades, prepaid fuel or car insurance, but it promotes them energetically.
”There are many cases of unnecessary or excessively expensive products being sold to car rental customers,” said Thomas Dickerson, author of ”Travel Law” (Law Journal Press, 2004). ”The car rental companies will do whatever is necessary to make money. You should expect them to act in a very aggressive way to do that.”
Ute Hodges, who has worked for two major car rental companies in Fort Myers, Fla., said a favorite sales pitch for a business traveler who shows up at the counter is: ”It’s tax deductible anyway.”
She added that customers who do not understand the system can easily become victims of it. At her locations, rental agents’ livelihoods depended on peddling add-on products, she said, and they were trained to do little else.
Indeed, the agents she knew received a base pay of about $7.50 an hour, making commission income vital to them. ”A good rental agent averages about $50,000 a year,” she said. ”A top agent can average about $120,000 a year.” Employees had to meet a certain quota or they were sent to remedial training, she said, and if their performance did not improve, they were fired.
”The car rental agencies would never admit that the agent at the counter is supposed to sell you something,” she said. ”Even during our training, they always told us that everything is for the benefit of the customer. But let’s face it, if my commissions for one year are $50,000, and I get 10 percent of my sales, that means I made the company $500,000 in sales, above the regular rental reservation. So it’s also for the benefit of the company.”
Mary Jane Wells, director of marketing and technical support for the Khoury Group, which is based in Orlando, Fla., and is the largest provider of training to rental employees, disputed Ms. Hodges’s assertion that agents are taught only to sell. While she acknowledged that her company’s training program included some sales strategies, she said it also covered issues like policies and procedures, review of rental agreements, rental transaction policies and company standards.
Ms. Wells suggested that overemphasizing sales would hurt a car rental company. ”By providing customers with superior customer service, they will increase company revenue by creating a loyal and satisfied customer who will return and rent again,” she said.
Many business travelers are less concerned with how the sales tactics evolved than with the fact that they are on the receiving end. They say the strategies include telling customers that the class of car they reserved is unavailable, and forcing them either to wait for an extended period or buy an upgrade.
But most of the hard-sell stories revolve around insurance, which analysts single out as the most profitable of the options, one that can as much as double the rental cost of a car. Rental agents have become increasingly insistent that customers buy coverage, even when presented with evidence that the policy is not needed, because, for example, the renter already has coverage on a credit card or on a regular policy.
Larry Evans ran into such an employee at the Hertz counter at the Pittsburgh airport recently. ”The agent asked if I wanted Hertz insurance coverage, even though my preferences state that I decline such additional coverage,” said Mr. Evans, a network administrator who lives in Smyrna, Ga. He turned down the extra coverage, but the agent persisted, he says, telling him that Pennsylvania law required Hertz coverage (it does not) and warning him to drive safely.
After Mr. Evans complained to Hertz, he received an apology and a $50 voucher. The company also promised to look into Mr. Evans’s rental experience. ”The actions described by Mr. Evans are not condoned by Hertz,” said a Hertz spokeswoman, Paula Stifter. ”That’s not how we do business.”
Although the car rental industry has no written code of ethics, there is a general understanding that some hard-sell tactics are unacceptable, according to Marianne Sullivan, president of the Association of Car and Truck Rental Independents and Franchisees. ”When the intention behind it is misleading, then there’s a problem,” she said.
Motorists who believe they are the targets of a dishonest sales pitch ”have to speak up and ask for a manager,” she added.
”If the manager doesn’t do something,” she added, ”and you feel the organization isn’t reputable, you should no longer rent from it.”
Paul Hoppe dreads the wait for the keys at the car rental desk. The agent, he says, invariably tries to talk him into switching to a larger, more expensive vehicle and buying costly prepaid gas options and unnecessary insurance.
Mr. Hoppe, an associate professor of accounting at Golden Gate University in San Francisco, says rental companies have been ratcheting up the pressure on him. He recounted a recent experience at the Enterprise Rent-A-Car office at Los Angeles International Airport.
”They told me they didn’t have my requested car size so they asked if I would upgrade,” he said. ”They asked if I wanted the optional insurance, and when I said no, they wanted to know which insurance I had.” After a spirited argument with an agent, Mr. Hoppe said, he managed to drive away without signing up for any extras.
Christy Conrad, a spokeswoman for Enterprise, said: ”It’s never our intent to make our customers uncomfortable.” She said that the company did not condone aggressive sales efforts like the one described by Mr. Hoppe. ”However, it’s in the best interests of the consumer to be well educated when it comes to insurance,” she added.
Other travelers agree with Mr. Hoppe that the sales pitches are becoming more common. Rental companies, which extensively train their employees in the art of marketing high-profit options, are now instructing front-line agents to go after business customers. ”Business travelers are seen as likely targets for these products,” said Cathy Stephens, editor of the industry trade publication Auto Rental News.
Although many of these travelers are elusive — for example, frequent renters with a negotiated corporate rate rarely use the check-in counter — others are not. So-called unmanaged business travelers, who do not work with a travel manager and who bargain-hunt for the lowest car rates on the Internet, are seen as good prospects.
”When you decline the insurance, they pull out these Polaroids of horrific accidents that resulted in thousands of dollars in repairs,” said Ed Kummel, a network administrator in Ashburn, Va. ”Even when I tell them that my credit card will handle all that, they insist that it won’t cover the revenues lost during repair.”
The hard sell should not surprise anyone. Business travel accounts for an estimated 60 percent of car rental companies’ income and is crucial for turning their fortunes around after two years of flat earnings.
The National Business Travel Association expects corporate car rental rates to increase by 2 percent this year. But that may prove to be a conservative estimate. In February, the Cendant Car Rental Group, which owns the Avis and Budget brands, raised rates $5 a day and $20 a week. The move was followed by most of its competitors.
But the real money, as far as some rental companies are concerned, is in the extras. The industry declines to disclose the profitability of add-ons like upgrades, prepaid fuel or car insurance, but it promotes them energetically.
”There are many cases of unnecessary or excessively expensive products being sold to car rental customers,” said Thomas Dickerson, author of ”Travel Law” (Law Journal Press, 2004). ”The car rental companies will do whatever is necessary to make money. You should expect them to act in a very aggressive way to do that.”
Ute Hodges, who has worked for two major car rental companies in Fort Myers, Fla., said a favorite sales pitch for a business traveler who shows up at the counter is: ”It’s tax deductible anyway.”
She added that customers who do not understand the system can easily become victims of it. At her locations, rental agents’ livelihoods depended on peddling add-on products, she said, and they were trained to do little else.
Indeed, the agents she knew received a base pay of about $7.50 an hour, making commission income vital to them. ”A good rental agent averages about $50,000 a year,” she said. ”A top agent can average about $120,000 a year.” Employees had to meet a certain quota or they were sent to remedial training, she said, and if their performance did not improve, they were fired.
”The car rental agencies would never admit that the agent at the counter is supposed to sell you something,” she said. ”Even during our training, they always told us that everything is for the benefit of the customer. But let’s face it, if my commissions for one year are $50,000, and I get 10 percent of my sales, that means I made the company $500,000 in sales, above the regular rental reservation. So it’s also for the benefit of the company.”
Mary Jane Wells, director of marketing and technical support for the Khoury Group, which is based in Orlando, Fla., and is the largest provider of training to rental employees, disputed Ms. Hodges’s assertion that agents are taught only to sell. While she acknowledged that her company’s training program included some sales strategies, she said it also covered issues like policies and procedures, review of rental agreements, rental transaction policies and company standards.
Ms. Wells suggested that overemphasizing sales would hurt a car rental company. ”By providing customers with superior customer service, they will increase company revenue by creating a loyal and satisfied customer who will return and rent again,” she said.
Many business travelers are less concerned with how the sales tactics evolved than with the fact that they are on the receiving end. They say the strategies include telling customers that the class of car they reserved is unavailable, and forcing them either to wait for an extended period or buy an upgrade.
But most of the hard-sell stories revolve around insurance, which analysts single out as the most profitable of the options, one that can as much as double the rental cost of a car. Rental agents have become increasingly insistent that customers buy coverage, even when presented with evidence that the policy is not needed, because, for example, the renter already has coverage on a credit card or on a regular policy.
Larry Evans ran into such an employee at the Hertz counter at the Pittsburgh airport recently. ”The agent asked if I wanted Hertz insurance coverage, even though my preferences state that I decline such additional coverage,” said Mr. Evans, a network administrator who lives in Smyrna, Ga. He turned down the extra coverage, but the agent persisted, he says, telling him that Pennsylvania law required Hertz coverage (it does not) and warning him to drive safely.
After Mr. Evans complained to Hertz, he received an apology and a $50 voucher. The company also promised to look into Mr. Evans’s rental experience. ”The actions described by Mr. Evans are not condoned by Hertz,” said a Hertz spokeswoman, Paula Stifter. ”That’s not how we do business.”
Although the car rental industry has no written code of ethics, there is a general understanding that some hard-sell tactics are unacceptable, according to Marianne Sullivan, president of the Association of Car and Truck Rental Independents and Franchisees. ”When the intention behind it is misleading, then there’s a problem,” she said.
Motorists who believe they are the targets of a dishonest sales pitch ”have to speak up and ask for a manager,” she added.
”If the manager doesn’t do something,” she added, ”and you feel the organization isn’t reputable, you should no longer rent from it.”
Christopher Elliott is the author of Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals. Critics have called it “eye-opening” and “inspiring” — it’ll “grab your attention and won’t let go.” Order your copy now on Amazon, Barnes & Noble or iTunes.
Elliott is consumer advocate 
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