The car rental market is comprised of three segments, namely premium, mid-level, and low-cost companies. The significant global premium car rental companies have subsidiary companies in the mid-level and low-cost segments.
The premium car rental segment companies are Avis, Hertz, Europcar, Sixt, and Enterprise. Mid-level companies are Budget, Thrifty, Dollar, Alamo, National, Keddy, Rhodium, and E-Z Rent-a-Car. Low-cost car rental companies Payless, Zipcar, Firefly, and Fox, are the notable players in this segment.
The premium car rental companies offer cost-conscious customers and customers without pre-booking alternatives to their premium-priced offering. Let’s look at where Enterprise and Budget fit into the rental car industry.
Enterprise Vs. Budget – Where Do They Fit?
Budget belongs to AVIS, the biggest premium car rental company in the world. Enterprise also belongs in the premium car rental segment and directly competes with other premium brands such as Avis, Hertz, Europcar, and Sixt.
The premium car rental segment companies charge an average of $50 per car per day. They are present in all global cities at major airports, train stations, and city terminals. They offer low mileage premium car brands and do not add any high costs at their collection counters.
Enterprise was founded in the US after World War II and named after one of the US Aircraft carriers and also owns the mid-level car rental company Alamo, a direct competitor to Budget.
|Europcar||Keddy, National||Interrent, Fox|
Enterprise has over 6,000 conveniently located collection and drop-off points in the US. They offer special rates to long-term rentals and companies. The company also offers some exotic vehicles to rent for special occasions. Prices vary for different locations but not by much, and Enterprise will not charge you for sneaky additional charges like many medium and low-cost players do.
Budget Car Rental has some of the lowest cost car rentals in the industry and has an average daily cost of $35 per day. Pre-booking discounts of a further 35% are possible for well-planned travel. Their weekend special includes a free third day on group C and E-cars only.
Budget Car Rental belongs to the Avis group. Budget benefits from the purchasing power, fleet management systems, and expertise in the group to offer customers much more than just Honda Accords and Toyota Corollas. You can rent hybrid vehicles like the Toyota Prius and muscle convertibles like the Chevrolet Camaro from Budget.
The customer satisfaction for Budget is not as high as the premium segment players like Enterprise or Avis. Still, as an excellent value for money proposition, Budget is a good choice.
Car Rental Companies – Who Owns Who
The car rental industry has three customer offerings, presenting the market with an experience varying from premium, mid-level and low-cost. Strategically, big car rental companies like Avis, Hertz, Europcar, Sixt, and Enterprise have positioned themselves to have a presence at each level but with a different brand.
Avis serves the premium segment from more than 180 countries worldwide, placed at all international airports, train stations, and city terminals. Avis offers premium car brands priced on average at $60 per day at concierge collection and drop-off stores.
To cover the mid-level segment, Avis uses the Budget brand to attract customers that are more cost-conscious but still require collection and drop-offs at great locations. They offer more mid-level brands with good specification levels but at an average daily rental rate of $35.
Avis also owns some low-cost rental brands like Payless and Zipcar, found in tourist hotspots like the Caribbean and Mediterranean. They offer very low daily rental rates, but care should be taken to avoid hidden costs and the high-value reservations placed on credit cards.
Enterprise competes in the premium car rental segment and should be compared to Avis and not Budget. Enterprise is the smallest of the premium car rental companies and only has collection and drop-off locations in ninety countries.
Enterprise is known to have some exotic vehicles in their rental fleet at their 6,000 locations in the US. Enterprise owns Alamo Car Rental, which is a direct competitor with Budget in the mid-level segment. Alamo is popular with tech-savvy millennials due to its unlimited mileage packages.
Alamo cleverly connects with customers via their Alamo Insider program, which provides customers with guaranteed discounts. Alamo also networks with the National Education Association supporting teachers with special value deals.
Enterprise does not own any car rental subsidiaries in the low-cost segment. They drive competition between Enterprise and Alamo to encourage excellence in customer service.
Rental Cars Are A Futuristic Alternative To Car Ownership
The age of individual car ownership is coming to an end. Only one percent of the world population will privately own cars in the 2050s. Buying a vehicle is not making good use of your financial resources. Cars lose significant value during the first five years of ownership and require maintenance, fuel, insurance, taxes, and toll fees during this time.
Using public transport, taxis, or mobility-on-demand services like Uber could become a viable alternative to cover daily mobility needs. Car rental for weekends or holidays is convenient as it can be planned and budgeted for. The secret to getting the best value for money from car rental is to plan and book well in advance.
Hertz and Tesla have announced an exciting deal. Hertz has committed to purchasing 100,000 Tesla Model 3 in the US, providing a way for consumers to experience what driving an electric vehicle is like. The transition from Internal Combustion Vehicles (ICE) to Electric Vehicles (EVs) is happening rapidly. The Hertz/Avis deal is a great way to spread the exposure of EVs.
Enterprise and Budget are not direct competitors in the car rental market. Avis is a direct competitor with Enterprise in the premium car rental segment. Avis is the largest global car rental company and, as such, has sub-brands present in the mid-level segment and low-cost segments.
Budget is more comparable to Alamo, which belongs to Enterprise but is both mid-level segment car rental companies. In a like-for-like comparison, it is better to compare Avis to Enterprise and Budget to Alamo.
The best advice to avoid a bad experience with car rental is to do your travel planning well in advance and firm up your reservations once your plans are firm. If you have a comprehensive car and household insurance, you must make the rental company aware of this and not agree to extra costs for benefits you already have.
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