Dollar Thrifty disadvantaged by Chrysler fleet

All car hire companies are currently trying to navigate their way through difficult market circumstances, but Dollar Thrifty is finding itself in an especially difficult position, as many of its rentals cars are Chryslers. The problem in recent months has been that Dollar Thrifty has simply been unable to get very much money back when it sells those Chrysler vehicles that it has decided to retire from its fleet. The value of these used cars has declined quite significantly, yet these vehicle sales should, in most circumstances, comprise an important part of any car rental firm’s income.

Dollar Thrifty may also feel that it has its hands tied, thanks to its special relationship with Chrysler. Originally, the Thrifty Automotive Group was controlled by the car manufacturer, but Chrysler sold it off a few years ago. Yet an important clause in the contract committed Dollar Thrifty to buying further Chrysler vehicles for the foreseeable future. This places Dollar in a clearly disadvantageous position. While most all other rental firms are trimming down their fleet by retiring and selling more cars and buying fewer new ones, Dollar Thrifty has little choice but to keep purchasing Chryslers, which it then has difficulty selling for a reasonable price. The car rental firm already pointed out earlier this week that these depreciation costs will likely eat away at the company’s profit margins in the coming months.

www.dtag.com