Car rental in 2027: planning the season on the right figures

Rental companies plan the season in the autumn and winter: how many vehicles to buy or lease, in which categories, for which branches, and when to defleet. Those decisions rest on one figure, utilization, and the figure is often calculated on a base that flatters the fleet.

The usual definition divides days on hire by days the vehicle was available for hire. Vehicles in the workshop, waiting for a damage assessment, standing at the wrong branch after a one-way rental or waiting to be sold drop out of the denominator. Take a fleet of 100 cars with 70 on hire and 12 unavailable for those reasons. Against available vehicles, utilization is 80%. Against the whole fleet, it is 70%. The ten-point gap is the cost of vehicles the business pays for and cannot rent, and a buying plan built on 80% adds cars to a fleet that is already carrying idle ones.

The 2027 plan should start from utilization against the whole fleet, by branch and vehicle category, with off-hire days split by reason: mechanical repair, damage awaiting assessment or repair, transfer, preparation and defleet. Each reason has a different owner. Repair days belong to the workshop and its suppliers. Transfer days belong to one-way pricing. Damage days belong to the claims process, which is where most rental companies leave recoverable money behind.

Since 14 November 2024 Booking.com has had to comply with the EU Digital Markets Act, which prohibits parity clauses. Car rental companies that sell through Booking.com may offer different prices and conditions, including better ones, on their own websites and other channels, and Booking.com may not raise commission rates or delist offers in response. Business users also gained real-time, continuous access to the data they and their customers generate on the platform, and the right to transfer it. Two months earlier, on 19 September 2024, the Court of Justice of the EU ruled in Case C-264/23 that price parity clauses used by online hotel reservation platforms cannot, in principle, be classified as ancillary restraints under EU competition law.

Freedom to price lower on the direct channel is only useful if the business knows what each channel earns. Broker bookings arrive net of commission. They carry their own cancellation and no-show patterns and a different take-up of extras at the counter. A customer who has bought excess cover from a broker or a standalone insurer has little reason to buy the rental company's own damage waiver. If that customer returns a damaged car, the rental company charges the customer's card and the customer claims the money back from the third party. The repair cost is the same, the recovery is slower and more often disputed.

The comparison that matters is net contribution per rental day by channel: rental revenue after commission, plus extras actually sold, minus card and chargeback costs, minus damage cost not recovered, minus one-way and no-show costs. That figure decides how large a direct-price advantage the business can afford, and on which routes and dates. Without it, a direct discount can move bookings from a broker to the website and leave margin unchanged or lower.

Damage disputes are an old issue in the sector. In January 2017 the EU Consumer Protection Cooperation network published commitments by the five major car rental companies to clearer terms on insurance, waivers and refuelling, and to fairer handling of alleged damage. Its March 2019 assessment noted that those companies covered two out of three private car rentals in the EU, and that intermediaries and smaller companies would also be monitored.

Inside the business, recovery usually fails for a duller reason. The check-out photographs, the return inspection, the repair invoice and the charge to the customer or insurer are held in different systems, and nothing joins them. A repair invoice that does not carry the rental agreement number cannot be matched to the rental that caused the damage, so it is booked as a general fleet cost. The recovery rate that management sees is then calculated only on the claims someone opened, which makes it look better than it is.

The working measure is damage cost recovered divided by all damage repair cost in the period, with every repair invoice either matched to a rental agreement or marked as unmatched. The unmatched share is the first target. The second is ageing: claims open for more than 30 days without a customer response, by branch. Both depend on discipline at the counter, where photographs at check-out and return are taken against the agreement number and stored with it, so that evidence exists when a customer disputes the charge.

Electrification decisions for 2027 will be shaped by manufacturers' supply as much as by rental demand. In the UK the zero emission vehicle mandate places its targets on manufacturers, which must make zero emission cars a rising share of their new car registrations: 33% in 2026, rising to 80% by 2030. Following the changes announced in April 2025, a manufacturer that misses its target after using the scheme's other compliance routes pays £12,000 for each car it falls short. Manufacturers therefore have a reason to place electric cars with large buyers, rental fleets included, on attractive terms.

The purchase price is the easy part of the calculation. In January 2024 Hertz said it would sell about 20,000 electric vehicles from its US fleet, about a third of its global electric fleet. It expected the sale to remove a disproportionate number of lower-margin rentals and to reduce damage expense associated with electric vehicles, and it reported that vehicle residual values had fallen faster than expected in the fourth quarter of 2023.

The lesson for a smaller operator concerns the order of the analysis. Before committing electric vehicles to a branch, the business needs its own figures for repair cost and repair time per damage event by vehicle type, parts availability and approved repairers near that branch, charging time between rentals, and the resale route at defleet. A trial with a limited number of vehicles in two or three branches, measured on revenue per vehicle per day after damage cost and off-hire days, produces that evidence. A fleet-wide commitment made on purchase price alone repeats the error the Hertz announcement describes.

Since 6 April 2025 the UK Digital Markets, Competition and Consumers Act 2024 has prohibited drip pricing, where a consumer is shown a headline price and mandatory charges are added as the booking proceeds. The Competition and Markets Authority's price transparency guidance, published in November 2025, sets out that mandatory charges belong in the headline price, and that responsibility can extend to price comparison sites and other intermediaries as well as the seller. The CMA can now enforce consumer law directly and impose fines of up to 10% of global turnover.

For rental companies the exposure sits in charges the booking engine adds late: location or airport surcharges, compulsory fees for some drivers, and any fee that every customer on a given booking must pay. Optional extras, such as an excess reduction product, fall into a separate category. Where the line between optional and mandatory falls for each charge is a question for the company's legal advisers, and it should be settled before the 2027 rates are loaded, not discovered through a complaint.

The data question is consistency across channels. The price on the company website, in each broker feed and on the counter screen should be built from the same components, so that the total a customer saw online is the total on the rental agreement. Where those totals differ, the company finds out through complaints and chargebacks. Reporting chargebacks by channel and branch every month is the cheapest early warning available.

By the end of November 2026, restate utilization for the past twelve months against the whole fleet, with off-hire days by reason and branch. Use that figure, not the available-fleet figure, in the 2027 buying and leasing plan.

Before broker contracts and rates are set for 2027, calculate net contribution per rental day by channel and route for the 2026 season. Set the direct-price differential from it, and request the Booking.com data the Digital Markets Act entitles you to, so that broker bookings can be joined to your own rental records.

By January 2027, require the rental agreement number on every repair invoice and every damage photograph. Report the unmatched share of repair cost each month and set a target for reducing it before the summer peak.

Before placing any electric vehicle order for the 2027 season, run the damage and off-hire analysis by vehicle type on the fleet you already operate. Where your own repair data is thin, limit the commitment to a measured trial.

Before the 2027 rates go live, have your advisers classify every charge as mandatory or optional under the DMCC Act, rebuild the headline price on every channel to match, and start reporting chargebacks by channel and branch.