Why Car Rental Companies Can Charge $9 Per Gallon for Gas

Discussion in 'General Discussion | Travel' started by sobore, Aug 9, 2011.  |  Print Topic

  1. sobore
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    sobore Gold Member

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    http://blogs.forbes.com/jonbruner/2...al-companies-can-charge-9-per-gallon-for-gas/

    $9.29 per gallon is an enormous amount of money to pay for gas–that’s well over twice the national average of $3.71 per gallon, but it’s what I’ll pay Hertz if I forget to fill up my rental car when I return it to Las Vegas’s airport at the end of the week. I’ve often been struck by these prices when I’ve seen them posted (and once ended up paying them)–how can the market tolerate prices like those? Here’s the economics behind outrageously expensive rental car gas:

    Read more: http://blogs.forbes.com/jonbruner/2...al-companies-can-charge-9-per-gallon-for-gas/
     
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  2. SC Flier
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    SC Flier Gold Member

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    I was expecting this to be an insider's look at the industry practice with real numbers rather than a consumer's look with assumptions and guesses.

    "Plus, rental car companies probably can’t buy gasoline at the same wholesale discounts that gas stations can. So I think there’s some cost-based justification for rental companies charging high prices for refills, but I suspect that the demand-based reasons above play a much larger role in pushing gas toward $9 per gallon."
     
  3. dhammer53
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    dhammer53 Gold Member

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    OP, why wouldn't you fill up?
     
  4. mattsteg
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    mattsteg Gold Member

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    Could be in a hurry, forget to fill up, can't find a gas station nearby, etc. Lots of reasons why you might want to not bother with filling up.
     
  5. sobore
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    sobore Gold Member

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    Late for a flight has to rank up there.
     
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  6. SC Flier
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    SC Flier Gold Member

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    Once upon a time, I was running late to the PHL airport after working longer than originally planned. I returned the car without filling up because I decided that it would be better to pay the $24 for $10 worth of fuel rather than spend 10 minutes finding a gas station and filling up. The woman checking in my car proceeded to chastise me for not filling the car up myself and wasted my time trying to convince me that I could leave and fill up in order to avoid the extra expense. I was getting irritated because she was just making me later. I'd have been really be angry if I missed my flight due to her rant.

    To add to this, my travel time was billable at a rate that actually made it cheaper to pay National to fill up my car than for someone to pay me to leave work early to go fill up my car. (Assuming that my extra work time was productive. It was.)
     
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  7. gobluetwo
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    gobluetwo Silver Member

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    Returning a car recently, I got off at an exit only to find that there were no gas stations after driving about 1/2 mile. Turned around, got back on the highway, and turned out that was the last exit before the airport. Oops. Billed to the client, but I generally try to fill it up on my own if it's over the Avis 75 mile flat fee limit.
     
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  8. Bob Smolinsky
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    Bob Smolinsky Gold Member

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    Well, if the majors all charge 2-3x, and they do, then the market tolerates it.
     
  9. Analise
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    Analise Silver Member

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    Does your company reimburse your Hertz expenses? Or do you write them off your taxes?
     
  10. SC Flier
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    SC Flier Gold Member

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    I typically only get reimbursed for refueling expenses if there was a very good reason that I couldn't fill it back up myself.

    If I'm on a trip for which I know I might end up in a rush getting back to the airport, I'll sometimes fill up the night before and then top it off when returning to the airport. But if there's not time on the return date, it's hopefully not short more than a few gallons. (Though it's never just 1 gallon since the rental companies charge per 1/8th tank rather than per gallon.)
     

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