Most types of business suffer during an economic downturn, with consumers being more reluctant to spend money. However, some types of businesses are actually structured so they are not as vulnerable to a slowing economy.
One type of business that might not be immediately thought of as recession proof is the auto rental business, but during periods of economic volatility the car rental industry still performs better than many business models for several reasons.
During periods of economic stagnation many people forgo bigger ticket items, such as buying new car. As a result, consumers will often rent a car for a longer trip out of town if they feel their own vehicle is not up to par. Additionally, renting a car for a long road trip avoids putting a lot of unnecessary miles on a personal vehicle. This not only protects consumers from lost time and money from mechanical trouble, as the rental company will exchange the vehicle if it breaks down. Renting a car will also allow the customer’s own auto to last longer while protecting the resale value by keeping the extra miles off the vehicle. During bad economic times people will often forgo flying, choosing to rent a car and drive instead of flying for short trips.
Another area where consumers usually cut back during a recession is taking expensive vacations. Families do still go on vacation during a recession, but instead of flying to Fuji for a week they may instead rent a minivan for a weekend trip to the mountains.
If consumers own a vehicle that doesn’t get good gas mileage, such as a large SUV or pickup truck, they will often rent a vehicle with a higher MPG rating when taking a trip, saving on gas.
Business owners and CEOs are also more reluctant to buy new vehicles during a recession. However, even during slow economic periods business people still have to travel. In an effort to tighten their belts, instead companies often opt to rent a vehicle for their employees, provide them with a rental car allowance, or reimburse the employee for travel expenses.
When renting a car, it is wise to check both local car rental companies and national auto rental agencies to see who offers the best deals and which companies may have a special going on. Consumers should also check online for special promotions.
Many auto rental agencies offer package deals that include a certain number of miles per day, or even unlimited mileage. Some rental car companies offer specials deals for advanced bookings or rental contracts that run longer than a week. Additionally, many car rental companies offer weekend specials and have loyalty programs for frequent renters, offering a free day of rental, a tank of gas or a free upgrade to a more luxurious vehicle, all of which can bring the total overall cost of renting a car down.
