Massive price difference between broker and rental car company
- By
- Aparna Patel
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- 20 Jul, 2023
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In addition to Tor’s explanation, this kind of differential can arise from market differentiation. Travelers who shop through one of these brokers are likely to be particularly value-minded, and getting their business means selling for a lower price (which is still better than idle inventory). Travelers who go directly to a specific rental agency (because of various "loyalty" arrangements, corporate contracts, and so on) may be less price sensitive, and so the agency simply can charge them more.
It is of course impossible to say what happened exactly in your case, but in other situations where I have come across similar savings from brokers, not only restricted to car rentals, but also hotel rooms and flight tickets, the broker often has had a ‘minimum use’ clause in their contract.
It may for example be, that the broker is managing 100 cars from the rental company’s fleet and is additionally guaranteeing that at least 20 cars are in use at any time, if not, the broker may be required to pay the rental company for the use anyway as had the car been rented out. If the broker now realizes that it can’t realistically expect to rent out 20 cars at a profitable rate due to low demand, the broker may decide to drop the rate so low, that they are in fact selling with a loss, but is still minimizing their losses.
Credit:stackoverflow.com‘