Figures released recently reveal that major brands are relying heavily on sales of their vehicles to the rental market. Daniel Attwood reports
Some of Ireland's major car importers are relying heavily on the car rental market to boost sales.
Figures shown to The Irish Times reveal that manufacturers such as Fiat, Chevrolet and Opel have registered a significant number of cars into the Irish short-term rental market. In the case of Fiat this means that more than 37 per cent of its Irish new car sales so far this year have been into the rental market.
Opel also figures highly after it registered just over 2,800 of its new cars - or almost one-quarter of its total sales - as rental vehicles in the first six months of the year.
Chevrolet also sent well over 20 per cent of its new cars straight into the hire market.
Rental cars are taken by hire drive companies on a buy-back agreement generally for six months, after which the cars are returned and must then be sold to the public as nearly new or ex-fleet vehicles.
Many manufacturers consider the car hire market as a profitable way of moving a limited number of new cars and of gaining maximum exposure for recently launched models.
However, it is unusual to see such a high number of cars from the same marque entering the rental market.
Such high numbers mean there is a possibility of an excess of certain models when the cars return to the open market at the end of the summer, which could drive down their residual values.
The statistics also reveal that the number of cars registered as rental vehicles has fallen for the first time in three years. There are now five per cent fewer hire cars on the roads than this time last year.
Despite this, the number of cars registered by dealers and manufacturers as rental vehicles still makes up 13 per cent of all new car registrations so far this year.
Last year, hire cars made up 15 per cent of new car registrations, while in 2004, they made up 15.5 per cent.
This means that so far this year there are more than 18,800 cars currently being rented out to tourists and short-term business users in Ireland.
While there is some hope in the car rental industry that the Ryder Cup will extend the rental life of some of these cars for another month, the vast majority of hire vehicles will return to dealers' forecourts from the end of August onwards.
With such a large number of cars coming off the rental fleet from the end of next month, those in the market for a nearly new or even a new car should consider holding back from buying until then.
Cars ranging from the smallest city cars to large executives are taken by car rental companies to feed the demand from visitors and business users.
While the statistics do not reveal the models sold into the rental fleet by each marque, it is accepted that virtually all mainstream and many premium models are represented.
When these cars arrive back at the dealers they can often prove to be a tempting buy for those looking for a nearly new car. A typical family hatchback is often offered for more than €2,000 under its price when new.
However, a growing trend in the tourist market for shorter holidays means the once typical two-week holiday rental is becoming a thing of the past.
As Paul Redmond, Chief Executive of the Car Rental Council of Ireland, explains, this trend is proving to be a difficulty for the industry.
"Holiday rentals used to be for two weeks, but this has decreased over the past few years so that now the typical rental is just three to four days.
"This means rental companies have twice or even three times as much work to do preparing cars to earn the same money they were previously."
This trend is also one buyers should be wary of when looking at ex-hire cars.
The more times a car has been rented out means the more times it has had a different driver behind the wheel.
This could lead to problems such as worn clutches although, as Redmond says, all short-term rental cars that are offered for sale would still be covered under the manufacturer's warranty.
For those who are looking for a nearly new car at the end of the year, bear in mind that a further 10,000 hire cars with 2006 registrations will become available during the early part of 2007.
The change to a 2007 registration should also help reduce the price of any such cars.
Meanwhile, motorists considering hiring a car for their holidays have been warned that the French authorities will be cracking down on road offences during the summer, according to the AA Motoring Trust. Last year, more than four million motorists were caught offending in France.
Holidaying drivers need to understand the extent of the crackdown facing them, with their cars possibly being impounded if they are pulled over by French police, the AA Trust warned.
As well as the current 1,010 speed camera sites linked to a fully-automated system for sending out fines notices, the French authorities plan to introduce cameras to catch "red-light runners" at traffic light-controlled junctions and also to snare tail-gating drivers.