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Rental car rates, ages on the rise

Industry experts say rental-car rates, boosted by summer travel demand, reach their highest level of the year between the Fourth of July and Labor Day. If you need a car, be sure to compare prices _ and be prepared for a car that is no longer new.

Rental companies have been keeping cars longer. The typical circulation period, which was around six months when this decade began, has grown at many major companies to a year or more. In fact, at Alamo Rent a Car, officials this year disclosed that they had started acquiring used cars. The measure was designed to cut costs and affects only "a very, very small percentage of our fleet," a spokeswoman said.

Another factor to consider: Because summer is the car industry's busiest season, says Jon LeSage, executive editor of Auto Rental News, many companies "have to do what they call "fleeting up.' " Thus, LeSage says, many outlets will hold onto vehicles a little longer. "Probably on most of them, you're going to see mileage from 12,000 to 15,000 miles. And you're going to see some used cars, too, with 18,000 to 20,000 miles," LeSage says.

An Avis spokesperson said that while the vast majority of Avis cars are circulated from 12 to 18 months, "We are having to hold onto the cars for longer periods of time than we have in the past."

At Hertz, a spokesperson reported that more than 90 percent of the company's fleet is made up of cars less than nine months old, and while franchised Hertz outlets often have somewhat older vehicles, they generally adhere to a limit of 12 months.

Why, aside from seasonal demand, are we seeing these older cars? In many ways, the U.S. rental-car industry serves as an inventory-management tool of the Detroit carmakers, who own all or part of most major car-rental companies. As public demand for American-made cars has increased the past three years, many carmakers have been selling fewer cars to rental firms, at higher prices. By one estimate, some rental-car companies are paying twice as much now for cars as they were in 1993.

Against that background, it's not surprising that rental-car companies have been nudging prices upward _ an estimated 5 percent over the past year, though figures can fluctuate widely by city and season _ and keeping vehicles in circulation longer.

At the American Car Rental Association in Washington, executive vice president Jan Armstrong recalls that about eight years ago, most rental companies were keeping cars in circulation for about four months. Then, as the automakers' sales improved, that period grew. Now, says Armstrong, "I would say it's a year to a year and a half."

Rental cars usually rack up 2,000 to 2,500 miles per month. In the vast majority of cases, Armstrong notes, major companies still are pulling cars back before they reach 20,000 miles.

No matter which company you're using, you may want to take a good look at the car you're issued before you drive off the lot.