Demand drives disparity in car rental rates

March 12, 2006|The sensible traveler, Bruce Mohl, Globe Staff

Rental car companies sometimes charge a resident of one country more than a resident of another country, even if both individuals are renting the same vehicle in the same location.

Budget Rent a Car was recently charging a US resident $281 to rent a full-size car at Boston's Logan International Airport for a week. The same vehicle for the same time period cost a resident of Britain $252, and that price included the collision damage waiver and supplemental liability coverages that would have nearly doubled the American's price.

Susan McGowan, a spokeswoman for the company that owns Budget and Avis Rent A Car, confirmed that rates are adjusted based on the renter's country of origin, just one of the factors that can affect pricing.

''We don't have standardized pricing on a global basis," she said. ''Our pricing does vary based on the country of residency of the renter, among other factors."

Neil Abrams of Purchase, N.Y. , a consultant to the rental car industry said prices of rental vehicles vary depending on supply and demand and even on whether the reservation was made online, in person, or through a travel agent. He said he wasn't surprised that residents of different countries would pay different rates. ''It's never one price fits all," he said. ''It's whatever the market will bear."

But Dennis Santoro of Rochester was shocked by the country-by-country pricing. He happened on the phenomenon while trying to arrange a rental car in Boston for a friend visiting from Germany in June. He thought it strange that a number of rental car websites were asking the renter's country of residence, and charging different rates based on the information.

''A car costs what a car costs depending on where it is rented. The market is where the car is, not where the renter is coming from," Santoro said.

But most rental car companies don't operate that way. Hertz's website was charging a US resident $311 to rent a full-size car for a week in March, while a British resident was charged $259, a price that included the two insurance coverages.

''Pricing varies depending on competitive conditions at the time, and our pricing does not inherently favor or disfavor residents of any particular country," said Paula R. Stifter, a Hertz spokeswoman, in an e-mail. ''When customers arrive at the counter without a reservation, the situation is different and vehicle availability and current pricing are the important factors that do not depend on the customer's residence."

Alamo offered residents of different countries different prices, too, but with the opposite result. Its website listed $262.88 for a US resident renting a full-size car for a week in March at Logan. The same car for the same week cost $331 if the renter was from Britain and $396 if from France.