Rental cars loyalty programs - are they worth it?

As you accumulate the airlines miles and hotel cards points for your next travel, the only other component of travel that is left is car rentals. You will dine in based on your credit cards again! Of course, dont be so cheap to go for free food even then! And your other needs are taken care off by your well earned money. I have been researching a lot on the car rentals these days. 

There are some good sites such as carrentals.com or rentalcars.com and so many other permutations and combinations to get on top of search engine SEO ratings that you would be confused by so many aggregators and actual car rental sites that are out there. Sometimes, man amazes me by making these things so so complicated that a simple act of reserving one basic car outside an airport or a city has turned into a mapping appliction + algorithm + revenues and so many things that the poor you and me will end up paying high rentals. 

To blurt it out, I think car loyalty programs are a waste of time.

They just offer menial things such as avoid lines ( big deal!), some percentages off ( likely 10 or 20 % off which you can as well get by searching for some codes online) and many rudimentary things like upgrading cars from economy to SUV or something like that. Really speaking, there are lots of analogues of Southwest out there in car rental space. It is one of the cheapest business out there to bootstrap. US alone has some 600 million cars on the road. Tons of cars by the year, massive rolling in inventories means there are so many mid year cars in the road that you can share these inventories and front end a rental car business. This business is just about grabbing customer eye balls and reserve them. The big players are Avis/Budget and Hertz, Nationals, Enterprise and so on. Depending on markets there are thrify, alamo, fox, dollar and so many myraid amount of car rental stores out there. A new kid in the block, usave, is also making huge waves in metro areas in the east coast. All in all, these discount players have already positioned their cars in rentals at about 50% less than premium players such as Avis or Hertz. If you search casually in major airports, Avis and Hertz might dole out a car of $60 while the same ones or economy ones are given by Dollar or Thrifty for about $30. They margin is tight. These can be easily outsourced to various card programs such as AAdvantage which is another big player and also the american airlines mileage program or Ultimate rewards from Chase or Amex Membership programs. They make the money in the addons such as insurance and selling you upgrades such as bigger cars, GAS fillups, toll programs and so on. There is really no discount in that space. Be smart and book the cars using a Citi Prestige card or Amex card and save on such insurance programs. 

So that leaves only the starting price. Most car companies will be glad to give you running offers such as 10% discount and what not. They may give you free weekends if you rent for the whole week etc. Given the ultra competitive market, this commodity is easy to break and it is not really worth the time to sign up for their rewards program. It is not like you are going to get free add ons or free rentals. Gas is anyway your cost and if you are just trying to score a free rental, most likely you are going to pay for it in other way. From National to Hertz, they have one free rent available for rent after 7 to 15 days. If you are business consultant who often rents the cars for long time, it makes sense to sign up and at times get some free days. But I think in the grand scheme of things, waiting for this code to arrive and then booking for a free car for a day etc. is not worth the pain. I mean, if you are going somewhere you look at the big picture and the big expenses such as airlines and hotels. The rentals and incidentals could be just another 100 bucks. Would you wait and argue with a travel desk clerk who is going to most likely sigh at you since you got a free reward and then go for a free day ( which is more often than norm to be used by so and so date ) , use this certificate online and then still be liable for gas and insurance which will simply take it closer to the price that you would have paid had you not been enrolled in first place. In all I think despite free rentals that you may score thru corporate programs and travel, you are looking at only 20-40% cost reduction. And in say about 10 trips, you might come ahead by about $250 at maximum. For all these pains, you are just tacking on additional processes - something this blog aspires to keep so low and down that you are not doing any additional work. 

Bottomline, in its current form, rental cars are where hotel programs were 10 years ago. Hotel programs and airlines programs were forced to change in the last 10 years to be more meaningful. They did away with old bad programs and expiring points and survived the recession. Airlines were the first to realize this given the rampant bankruptcy in that industry. Soon to follow the suit, albeit reluctantly and sloddily is the hotel industry. Rental cars might not even follow suit given the cheap booting required for such businesses. They are better off and you as a customer are better off if some one just gives you a lower practical rate. Imagine if hotels were to just price rooms with basic amenities at 50 bucks a night, would anyone really care much about points? Yeah, if it is just out there in the table but not worth it otherwise. Rentals and parkings fall in that category. No point in it as of 2015.