Ground transportation, including rental cars, taxis, and limousines generally signifies 8-12% of the total corporate travel spend. Regardless of size or number of global locations, corporations with negotiated car rental agreements normally save 10-30% of ground transportation spend. Due to the economic recession, many corporations signed unlimited term car rental agreements, which automatically renewed, but also caused companies to be paying 10% over market rates. Corporations also sacrificed numerous program benefits that could have been negotiated with an annual contract. It is crucial to understand the negotiable elements in your car rental program, the influence on prices, program effectiveness, and traveler happiness.
The first step to car rental agreements is collecting statistics on your historic usage in order to present a comprehensive look at your spend. Several kinds of data can be attained from car rental companies, travel management companies (TMC), and expense management systems. This data includes full car rental details such as insurance, fuel, and other taxes and fees, which are not usually included on many corporate credit cards, as these providers typically display the total car spend. Obtaining complete car program details with analysis on locations with greatest spend is also crucial to the negotiation process.
Company culture, policy, and rental habits are key influences in establishing which car rental providers should be selected and which components of the contract should be addressed through negotiations. Gaining car rental feedback from road warriors is also an important step in the process. There are several types of car rental partnerships to consider including a single car rental provider agreement and contracts with one main supplier and one secondary provider, which are used if the primary is sold out or doesn’t have a site in top locations. Another type of contract is national-based with one provider, enhanced by local supplier contracts that frequently offer reduced fees in increased volume locations.
Working with a TMC is a critical part of the car rental negotiations. A TMC can assist with enhancing the spend visibility, recognizing potential for contract developments, and getting suggestions in place. The total car rental program should be reviewed, including ancillary fees that are seldom factored into negotiations. Car rental benchmarking is another important step in the process to analyze other similar corporations in order to accurately gain insight into negotiated rates and contract provisions.
After collecting car rental data and reviewing company culture, policy, and patterns, the next step in the process is a request for proposal and negotiations. Acendas Travel created a white paper to aid in the car rental negotiation process. Click the link below to read our Effective Strategies for Corporate Car Rental Negotiations.
Effective Strategies for Corporate Car Rental Negotiations