How to buy … daily hire

Published in Fleet World

Daily hire (vehicle rental) is a useful and cost-effective way to buy short-term mobility for your staff. You get the car or van you need and someone else has to worry about depreciation, road tax and maintenance.

It may be cheaper to use daily hire than to allow your employees to claim mileage reimbursement for using their own cars. It may be safer, too, as cars rented from recognised companies are likely to be well maintained, something you may not be able to say about your employees’ own cars.

The daily hire market is very competitive. By shopping around you should get a good deal. Good volume discounts are available. But as with all services, it’s best not to choose solely on the basis of price. If you are going to rent a lot of vehicles, you should also consider the quality of the supplier’s administration, the range of cars they offer and the availability of one-way rentals.

You’ll need to decide whether to choose a local company or one of the national networks.

The global rental companies seem to be everywhere but there are also many smaller independent suppliers that can often offer a friendly, local, tailor-made service that you might value more than a big brand name.

A car rented from a reputable company will be roadworthy but may not be in perfect condition. Rental companies routinely rent out cars showing bodywork damage. You (or the driver) should inspect the car carefully on delivery and collection and double-check the accuracy of the condition reports to avoid problems later.

You should also check that the driver is insured to drive the vehicle, either under your company’s motor policy or insurance bought from the rental company.

Generally, rental companies deliver a car with a full tank of petrol and expect it to be returned with a full tank. If the tank is not full they will charge to fill it up, usually at a price significantly above normal pump prices.

Most UK daily hire companies are members of the BVRLA, which publishes ‘best practice’ recommendations for its members as well as a ‘model rental agreement’ (in conjunction with the OFT). Personally, I would only ever rent a car from a BVRLA member.

Rather than hiring direct you might decide to ask an intermediary – perhaps your leasing company or a rental broker – to arrange your car hire. They will shop around and find the cheapest price for you, saving you time and effort. They will be able to access the combined fleets of many car rental companies, so if you have very specific requirements (eg a particular vehicle at a particular time and a particular place) they are more likely to be able to get it for you. To put this into perspective the largest UK daily hire company operates 50,000 vehicles from 300 branches but an intermediary will usually be dealing with many rental companies with a combined fleet of 100,000 vehicles and more than 1,000 branches.

This comes at a cost, of course; the broker has to make a profit. In many cases this will come from the discount the broker has negotiated with the daily hire companies. This discount will are based on the broker’s huge order volumes, and will be set at a level that would not be available to any but the largest organisations. So, in fact, going via an intermediary might save you money. As in all areas of fleet you should shop around, compare prices and decide which option works best for you.

Professor Colin Tourick