The forecast continues to predict that everything is going up in 2013; airfare, taxes, hotel rates, and ancillary fees. I think you get the picture. Consequently, strategic negotiating is more important than ever. Let's focus on an area that holds a bit of mystique, but can reap substantial savings; the corporate car rental agreement.
The last I heard, a reported 80% of companies are negotiating nationwide agreements with car rental vendors. Whether you're seeking a flat rate for car rentals or a combination of flat rates and floating discounts, there are a few things you should keep in mind; one size doesn't fit all and there are no real set of rules.
However, the number one area that corporations gain negotiating power with vendors is through accurate cost benchmarking information. Travizon provides a proliferation of data to arm our client partners with the intelligence to achieve an agreement with savings results ranging from 13-30% annually vs. standard car rental rates. Don't be afraid to ask for concessions such as unlimited mileage, insurance, premium club memberships, and upgrades. It's also ok to ask for multiyear contracts to lock-in rates for two or three years. Keep in mind that off airport locations are frequently less expensive and should be considered when applicable. And yes, back-end rebates are still out there.
Here are five tips to avoid excessive fees:
- Insist on blackout periods being defined within your agreement
- Reject any fees for Energy Recoupment and Hotel Concession
- Request CDW and liability coverage at all locations and on all rates
- Require suppliers to block optional sales on products included in your agreement; e.g. insurance, optional equipment, and authorized driver
- Stipulate that refuel is capped at 50% above local prices
In summary, request agreements from your top two vendors, seek guidance from your travel management company when comparing agreements, read the fine print, and don't hesitate to red line the contract. The bottom line is car rental suppliers make concessions to win the business.
We understand that you don't do this every day, but we do. Contact email@example.com and we'll get the wheels rolling! For more information, click the link below to download our White Paper on Best Practices for Negotiating Corporate Car Rental Agreements.