What does "base rate" really mean?

[Warks]

I have scarcely rented a car since Covid but I noticed how the big companies renting out of airports seem to have almost doubled their prices since 2020. I used to fly to Townsville a lot for work, every few months or even more often. I used to rent a small car from one of Thrifty, Europcar or Hertz and it was generally around $70-90 per day. The final charge would be that charge times the number of days.
Now when I look to dummy book a car (I'm quoting on a job involving a number of visits) I see the same sized cars I used to rent but the total price is greatly inflated. However underneath in brackets there is a "base rate" daily figure that isn't a lot more than what I used to pay. When I click on the details button for surcharges it just has a vague statement about airport charges and one-way fees (which aren't applicable).
So the cheapest car from Thrifty is showing as two days' hire for $264. 65 but the "daily rate" is $89.63. So 2 x $89.63 = $179.26. Somewhere there's $85.39 in extra charges, equivalent to a third day's hire. Townsville airport wouldn't be that expensive. Are they charging not in 24 hour blocks but in days, or part thereof? Almost looks like it. Or is it insurance, not part of the daily rate?
I may have false memory syndrome but pre-Covid I thought the base rate was pretty much the charge.
I'm not blaming them for putting their prices up, just the way they are not explaining the charges.

 

[RooFlyer]

Base rate is what they charge for the car before other fees, taxes and add-ons. Sort of like an international airfare before all the airport charges, fees, taxes etc.

Hiring from an airport or downtown will incur an 'airport' or 'premium location' surcharge. This has been the case for as long as I can remember.

There may be insurance added in automatically (on top of the base rate), but this should be visible on one of the boking tabs. Third party cover would be mandatory and that will be an 'extra' again, the same for as long as I can remember.

I usually hire Avis and I can see the charges build or decline as I select or de-select various options, but I can't touch the 'mandatory extras'.

PS watch out how they do pre-hire inspections; Avis doesn't do the walk-around with an agent and mark dings on a bit of paper anymore; they send a link to a web page of often fuzzy photos. Do the walk around carefully and take detailed pics of the condition.

 

[aikman]

So the cheapest car from Thrifty is showing as two days' hire for $264.

Blue Chip membership is free and gets you 15% off. You can still get somewhat reasonable rates on some days.

 

[MollyJones]

Base rate you get a car.
If you want to collect it at the airport, that’s extra. (Airports charge the car rental companies)
If you want to insure it, that’s extra. (Likely covered if travelling for business and your company has annual travel policy)
If you want child restraint, GPS etc, that’s extra. (Kind of makes sense)
If you want another driver, that’s extra. (Makes no sense).

Most of the car companies sold down their fleet during covid and are taking some time to rebuild them, meaning they can charge what they want now demand is there but supply is not.

 

[Warks]

Blue Chip membership is free and gets you 15% off. You can still get somewhat reasonable rates on some days.

View attachment 338208

I've got Blue Chip and the price I quoted was with the discount. For the days I chose (Tues to Thurs 19-21 Sept) that same car is $273.48 "base rate" $92.87 per day. So do prices go up in September?

Post automatically merged: Aug 2, 2023

Base rate you get a car.
If you want to collect it at the airport, that’s extra. (Airports charge the car rental companies)
If you want to insure it, that’s extra. (Likely covered if travelling for business and your company has annual travel policy)
If you want child restraint, GPS etc, that’s extra. (Kind of makes sense)
If you want another driver, that’s extra. (Makes no sense).

Most of the car companies sold down their fleet during covid and are taking some time to rebuild them, meaning they can charge what they want now demand is there but supply is not.

It would be good to see the breakdown. I know there are fees and charges and surcharges and excise and taxes and... (like airlines) but it doesn't detail them at all, just gives a bulk number. Maybe if I went further with the booking I could see it, must check.

 

[oz_mark]

If you click on the book now button it will give you a breakdown. Something like this (not your example)

Compact​

Hybrid Toyota Corolla Hybrid or similar

2 Day

$167.84

Extras​

Location Fee	1	$36.77
Admn Recovery	1	$5.87
Vehicle Registration Recovery	1	$16.00

Others​

GST

1

$22.65

 

[Warks]

So when I look at something like Kayak and all these much cheaper deals pop up from the these other faceless companies but the cars still come from the main players, what's going on there? Has the insurance been left off? I'm talking Klook, Qeeq etc.

 

[BAM1748]

How can the registration not be in the base rate?

Time for the ACCC to review.

 

[oz_mark]

How can the registration not be in the base rate?

Time for the ACCC to review.

My Understanding is that back in the day the ACCC did look at it. The important things was that the total price was displayed, not so much how they got to it.

 

[BAM1748]

My Understanding is that back in the day the ACCC did look at it. The important things was that the total price was displayed, not so much how they got to it.

Wonder if I can hire car without rego as I don't want to pay that fee.

 

[andye]

I suspect that the base rate excluding things like rego is something to do with corporate discounts/rebates

 

[RooFlyer]

How can the registration not be in the base rate?

Is it 'registration' or something like 'registration recovery'? They might say 'well, we could include the amortisation of our registration costs in the base rate but this is more transparent'. Sort of like an airline 'fuel levy'

 

[BAM1748]

Is it 'registration' or something like 'registration recovery'? They might say 'well, we could include the amortisation of our registration costs in the base rate but this is more transparent'. Sort of like an airline 'fuel levy'

Rego is a fixed cost per day, good business if you're suggesting if the rental company doesn't rent out the car for week that week can be spread across the remaining days of the year? haha you've given me ideas to charge more at work.

 

[RooFlyer]

Rego is a fixed cost per day, good business if you're suggesting if the rental company doesn't rent out the car for week that week can be spread across the remaining days of the year? haha you've given me ideas to charge more at work.

I'm not defending them in any way, but its not unusual - in fact universal, I'd think - for service providers to amortise their plant & equipment capital costs (at least) to clients, either as a direct fee, or as part of their daily rate.

If it is what I think it is, the rental company might do something like:

Annual rego fee to government $1000 (for a commercial vehicle)
Average days rented pa = 200
Therefore amortisation of rego = $5/day
**Add our admin and, frankly, BS additional costs (profit) etc etc = $5/day
SO put $10/day as 'registration' on the renter's fee list.

I did exactly that type of calculation (except for the doubling of the number ) for my computers etc when I consulted. Used the proper depreciation rates, and charged it, but had it in my daily rate.

 

[Warks]

So this is how it can grow from a base rate which also conveniently doesn't include GST.

Vehicle:

Hyundai i30 or similar

3 days
$ 257.65

Extras:
LOCATION FEE:
1
$ 56.33

ADMN RECOVERY:
1
$ 9.02

VEHICLE REGISTRATION RECOVERY:
1
$ 24.00

Others:
GST
$ 34.7

Total:
Estimated total payable at the counter
$ 381.7