Reports: Business expenses for rental cars soar, while wholesale prices for those units soften
Perhaps if rental car companies aren’t getting quite as much in the auction lanes as they once did, they evidently are raking in notable revenue when those vehicles are in their fleets.
On Tuesday, Emburse, a travel and expense management firm, announced the results of its Q2 2023 SpendSmart Travel Trends report. This quarterly report tracks how much organizations spend on business travel, as well as trends for booking volume and trip length and compares it to the previous year and the previous quarter.
Emburse reported that the volume of car rentals booked during the second quarter jumped 36% year-over-year and 25% on a sequential comparison.
And even more notable was the amount spent on those car rentals during Q2. Emburse pegged the spike at 224% year-over-year and 172% quarter-over-quarter.
“Car rental companies reduced their fleets during the pandemic lockdown and have not yet fully restocked. When the pandemic emergency was declared over in May 2023, a boom in demand for car rentals drove prices up exponentially, which is reflected by the data released today,” Emburse said in a news release highlighting the complete report.
“This leaves corporate travel managers in a position to make difficult decisions about how to guide their employees for business trip transportation,” Emburse added.
Meanwhile, rental car companies are seeing oppositive movements in the wholesale market when it’s time to de-fleet. Cox Automotive previously indicated that rental risk prices declined during the first two weeks of July.
According to a Data Point report, the average price for rental risk units sold at auction during the first 15 days of July softened 7.1% year-over-year. Cox Automotive said rental risk prices also decreased 5.1% compared to the full month of June.
Cox Automotive added that the average mileage for rental risk units rolling down the lanes during the first half of July came in at 58,400 miles, which was 0.7% lower compared to a year ago but 2.9% higher month-over-month.