June 3, 1995 in Nation/World

Area Agencies Cling To Free Mileage

From Staff And Wire Reports
 

National rental car companies want to throttle unlimited-mileage programs, which have become a drag on their bottom line.

But Inland Northwest car-rental agencies are reluctant to embrace the trend, which could discourage tourists who fly into Spokane and drive rental cars to destinations in Idaho, Montana and Canada.

This week, Budget Rent a Car Corp. took the lead in the industry’s fight against rising costs by dropping unlimited free mileage on most rentals.

Budget’s new policy is the broadest move by any car rental firm to eliminate unlimited free mileage, which has been the industry norm since the late 1980s.

Avis Inc. said it plans a similar policy in 21 cities in mid-July, potentially crimping summer vacation driving plans. Hertz Inc. has tried a variety of mileage restrictions in different markets since mid-April.

Spokane-area Budget rental offices - which are independent franchisees affiliated with Budget - will keep an unlimited mileage rental rate for the time being, said a Budget spokeswoman. “It’s mostly targeted for Eastern cities,” she said.

Budget franchisees set their own policies for rental rates and conditions.

The new restrictions probably won’t deter people from renting cars, said Dave Walker of ACE Travel Agency in Coeur d’Alene.

“People might start thinking about how many miles they’re driving, though,” Walker said. “When I rent a car, I like to drive it around and do a little exploring. People might be real cautious about their driving if they have to pay for the miles.”

For leisure travelers looking to visit Sandpoint or Western Montana or even the Grand Coulee Dam, a 100-mile limit on a rental car could crimp their plans.

But, just as airlines tightened frequent-flier programs when they became too popular, rental companies say they can no longer afford to subsidize tourists’ sight-seeing.

“What you’re seeing is where the industry is going,” Avis spokesman Terry Gordon said.

Budget, based in the Chicago suburb of Lisle, said it will limit free miles to 100 per day on cars rented at 27 airports in the eastern and central United States. Drivers who exceed the limit will pay 20-25 cents per mile.

Budget will continue to offer unlimited free miles in Florida and Hawaii, popular tourist destinations where rental cars are a must. The company has not yet decided which Western cities will be covered by the new policy, spokeswoman Janice Cain said.

Budget wants its customers to limit their driving because high miles mean sharply higher costs for the company, said Tom Hawkes, Budget’s senior vice president in charge of fleet operations.

“With mileage being typically under 90 miles a day, most people aren’t going to have a problem with it,” he said.

Car rental fleet costs have doubled over the past three years while rental rates have risen a total of 10 percent to 15 percent, according to Alamo Rent a Car Inc. spokesman Jack Ryan.

The higher costs reflect penalties imposed by car manufacturers for high mileage on the cars they buy back from rental companies. Ford, which supplies most of Budget’s cars, charges Budget 10 cents to 25 cents per mile for year-old cars with more than 20,000 miles on their odometers, Hawkes said. Several years ago, the manufacturer allowed 25,000 to 30,000 miles without penalties, he said.

Car rental companies believe they must recoup some of the increased costs.

“Straight out, they have to make more money, period,” said Herbert Teison, publisher of Travel Smart, a consumer newsletter based in Dobbs Ferry, N.Y.

, DataTimes ILLUSTRATION: Photo


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