Rental Companies Caught Short as Demand Soars for Small Cars, Crashes for SUVs

Rental Companies Caught Short as Demand Soars for Small Cars, Crashes for SUVs

Ah, what a difference $4 gas makes.

With gasoline apparently parked at four bucks a gallon or more, consumer demand for smaller rental cars is soaring, the Los Angeles Times reports.

According to travel agency holding company Sabre, which owns Travelocity, bookings of compact and economy cars were up 10.2 percent and 14.3 percent, respectively, in April and May compared with 2007, while rentals in the midsize, luxury and minivan categories declined by 1.5 percent, 24 percent and 15.3 percent.

But thanks to a major shift in the cozy relationship among U.S. carmakers and companies such as Hertz, Avis and Thrifty in recent years -- and, as a result, the way rental agencies acquire their fleets -- the availability of fuel-efficient rentals has become extremely tight.

Simply put, not enough of the nation's roughly 1.85 million rental cars are gas-savers to satisfy demand, an imbalance rental agencies cannot quickly remedy. As a result, car rental companies are struggling financially, and long-held pricing models that put more luxurious vehicles ahead of crank-window econoboxes are being turned on their head.

"Just six months ago, anybody would have taken a Chevy Trailblazer SUV in lieu of a four-cylinder Cobalt. Not now," Mike Kane, owner of rental car advisor Vehicle Replacement Consulting Group, told the Times. "That's a big deal. That's 25 years of history changing."

Scott Doggett:  is an AutoObserver.com Associate Editor.