Some daily rental companies are beginning to turn down fleet business in favour of higher-margin consumer bookings, the Association of Fleet Professional (AFP) has reported.  

Some AFP members have been unable to find vehicles using corporate rental online portals but were able to hire a car or van at a retail rate using a credit card when visiting a rental outlet in person

James Pestell, AFP director, said that some fleets had been unable to find vehicles using corporate rental online portals but were able to hire a car or van at a retail rate using a credit card when visiting a rental outlet in person. 

“We’re not saying all rental companies have adopted this as a policy and we are not saying that, even within the same companies, it is happening uniformly across the country – but it does certainly seem to be happening, according to feedback from our members.”  

Pestell said that while to some extent it was understandable to prioritise margins, as most rental firms are operating reduced fleets due to vehicle shortages, there were better ways of continuing business.

“Fleets are regular and reliable customers for daily rental and often have longstanding relationships with their preferred rental suppliers. Their needs should arguably be given due consideration. Certainly, we suspect that many of our members would rather be given the opportunity to have conversations about rates than simply be shown zero availability when there are vehicles available for rent,” he explained.  

Rental shortages and the attendant difficulties are now a regular topic of conversation among AFP members, and Pestell said the situation is showing few signs of improvement and may even get worse before it improves.  

“Rental companies – like everyone else – simply can’t access new vehicle supply in the quantities they need.

“However, it does create difficulties for fleet operators in all the usual instances when rental vehicles are needed – to cover vehicles that are off the road for repair, for new employees, for temporary contracts and more.” 

It’s the latest warning about how the rental shortages are hitting fleets hard – last month saw the AFP warn that the current shortage of daily rental vehicles was starting to hit hard, causing a wide range of problems for businesses, ranging from maintenance to taking on new starters, while increasing downtime and costs. 

The association’s comments echo those of Fleet Evolution, which has said that daily rental rates are “sky-rocketing” – hitting as much as £950 a month – while rental lead times are going from hours to days and even weeks in some cases.  

Vehicle movement and inspection firm DMN Logistics also warned earlier this year that the slump in rental availability had not only resulted in a 40% rise in the cost of hiring a vehicle according to reports, but had also had a wider impact on new vehicle delivery times and costs. 

To compound the situation, it’s happening at a time when fleets actually need more cars and vans from rental companies, again because of vehicle production issues. According to the BVRLA, lead times of up to a year are now the norm for all vehicle types, exacerbated again by higher-margin retail business being prioritised by carmakers over fleets.

Speaking last month, BVRLA chief executive Gerry Keaney said: “The supply chain challenges that beset our industry show no sign of abating. BVRLA members continue to show remarkable resilience and creative thinking in supporting their customers, but the outlook is a real concern. Lead times are extending, orders are being cancelled and most available vehicles are being channelled to retail customers as manufacturers prioritise profit margins over fleet market share.” 

With no immediate solution to the problem in sight, the AFP has said that there are not many effective fleet management strategies for the rental shortage but has given some advice. 

“Probably the single most effective thing that fleets can do is to hang on to some of the vehicles they would normally defleet to use as pool vehicles in place of rental provision but that in itself creates problems with keeping them in a roadworthy condition, while they are often not stored in the locations where they are ultimately needed,” said James Pestell. 

Meanwhile, AAM Group has established a new subsidiary company to help businesses combat the current vehicle shortages. The new Onwrd division will help the fleet sector address the shortages, finding new ways – or new ways of thinking – to circumvent the issues, supported by a comprehensive package of solutions.