Mark Bower

Car Hire Champion and creator of moneymaxim.co.uk. Mark is an expert in the Car Hire industry.

View Mark on Google+

Will EU probe increase UK Car Hire prices?

UK car renters could see prices rise as a EU commission probe into cross border rental gathers speed.

The EU Commission have just announced it is investigating whether renters in one EU country are paying more for their car rental than those in a neighbouring country depending on their place of residence.

The EU probe into differing Car Hire prices across Europe is a particular threat to us in the UK as the example being used is that of a German renter being charged more to rent the same UK car through a .de (German) website that an .co.uk (UK) site.

If it finds there is a case to answer we could see price standardisation across the Union, meaning prices we see here could rise.

UK car hire is one of the most competitive in the world. I was only talking to a major car hire broker this week who told me that they would anticipate the average value of a booking made from a Scandinavian country to be double that seen from a UK customer. Much of this differential is down to the fact that our northern European neighbours tend to rent more up market vehicles and take more extras such as extra insurance or sat navs than we do in the UK.

However knowing that that market is not as price sensitive means there is a temptation to market products on features rather than price, leading to differences between websites focusing on different markets.

Here we spend more time searching for a great deal, often buying extras such as car hire excess insurance independently. As such car hire firms know their prices have to be ultra competitive if they want to win the business. It appears that this has led, in some instances to us seeing prices that are not available in some other parts in Europe.

If price standardisation is enforced what will this mean? Well I suspect that prices offered directly to consumers by the big brands will rise in the UK when they are sold directly from their website.

Nevertheless the chances are that these companies will keep the volume flowing through their desk by using the broker market to an even greater degree than they do now. That way they can pass on the responsibility to 'remarket' products fairly across the Union to other companies, hence meeting their own obligations, but preserving their market share.

This will however be a further blow to the big brands here, who will become ever more reliant on car hire insurance comparison services.

Any questions? Why not 'Ask Mark'?