Ive given this talk before, but ill give it again, its about time for a refresher.

Car class in the rental car industry is determined by two things, trunk size and passenger carrying space. The only place this differs in specific specialty cars.

Detroit, car size is based upon wheelbase, weight, and engine.

Consequently, A full size in the rental car industry almost always falls into the mid size detroit standards. Everyone remembers the Malibu debacle. One year its a full size, the next year its a mid size. By criteria (5-6 passengers, 2 large and two small bags), its a full size. But compared to other cars in the same class, its Tiny for a full size. So it was eventually put in the mid size category..

Second, pricing on car class is determined by supply and demand with hooks in the cost to operate and maintain.

a perfect example is the H3 Hummer. Detroit retail priced at 30k often demands 60% premium pricing over the full size SUV. Yet the last time I checked you could buy an H3 for the same price as a Ford explorer or Chevy Trailblazer.

so why the price difference, H3 is in much more demand so its priced up, plus the supply of H3's on any given lot is is drastically less than the regular sized SUVs. any two bit Econ professor can tell you Low supply, high demand=high prices.

Another example is the Cadi/Luxury pricing. A cadi Costs more than convertibles in some cities, less that convertibles in others. Though the Cadi's cost is drastically more than, lets say, the ford mustang, the market can bear a higher price, in fact, for the lesser car if the demand is greater.

Most companies, successful companies, practice "price yields."

If a demand on a particular car class, or hotel room, or airplane route, or any good that is considered a luxury and not necessity by econ standards is high, the price managers raise the rates to slow down sales to not overload the system.

(necessity=food, luxury=anything that you can survive and live without)

when any company "sells out" of a particular luxury item, they havent done their job right. That includes avis, hertz, dollar, alamo, the four seasons, hilton, united et al.

The "Goal" of a rental car company is to sell the last car on their lot for 1 million dollars a day.

The "PRimary" goal is to NEVER sell out.


so if a company has 10000 cars and all 10000 cars are availabe, you may see 20 dollar a day, 120 dollar a week pricing.
5000 cars available, 23/140
2000 cars available, 28/180
1000 cars available, 35/229
100 cars available, 80/399
10 cars available, 145/800
1 car on the lot 400/20000

Given that most rental car companies operate around 80% utilization, you can se pricies hover somewhere north of 35$ a day229 a week.

As your supply dwindles and you demand increases, you yield up on pricing.

usually of a 10000 car fleet, most companies will only carry 50-75 premimum cars. in that same fleet, you will likely see 3000 full size cars.