Auto Insurance Quotes: Car rental companies are buying fewer new ...

Car rental companies are buying fewer new vehicles, making raised rates for older cars...

When the car rental companies are setting up or expanding their geographic cover, they go into the market for buying new vehicles in volume. Suddenly the manufacturers have a guaranteed buyer for a significant slice of its immediate production. It's worth offering substantial discounts to attract this business and, in their efforts to dig themselves out of the pit caused when the economy tanked in 2008, Ford, General Motors and Chrysler have been looking to the fleet buyers to keep their production lines turning over at economic levels. This year has seen a slight change in buying patterns.

The majority of the fleet buyers came to the manufacturers for delivery rather earlier this year than last, and asked for smaller numbers. Both Ford and General Motors have reported significantly lower sales. This has affected the stock market's view of both companies with GM's sales down 6% as against last year. Ford's loss of sales to the fleet buyers was off-set by a rise in private sales but its performance remains disappointing. Why is this happening? In part, the car rental companies have decided to extend the life of their fleets. They used to routinely replace all vehicles based on age and without making any individual evaluation of the state of the vehicles. As a result, they were selling a mixed bag of well and and poorly performing vehicles at the same price to the secondhand trade. Now the rental companies have become slightly more discriminating and keep the well-maintained and lower milage vehicles for longer. This increases the return on capital invested and boosts profits.

Sadly, the overall effect on US manufacturers is not so good. The Chrysler Group continues to hold about 11% of the market with a good dividend record, but Ford and GM have both lost market share to Toyota and Honda as Americans in general allow their private vehicles to age rather than buy new. The average age of vehicles on our roads today is eleven years. With the continuing downturn, an increasing percentage of owners have decided to delay buying new. So, when you pick up your next car rental, you can expect to find an older model.

Source: http://i-rousseau.blogspot.com/2012/09/car-rental-companies-are-buying-fewer.html

zac efron and taylor swift real housewives of orange county bloom energy franklin graham jambalaya taylor swift and zac efron basketball wives