Rental Car Challenges in Aftermath of Natural Disasters

Some folks believe that rental car agencies make out like bandits after natural disasters. This is because so many people have their cars damage, and they have no choice but to rent a car. But make no mistake, most rental car companies in the region where the natural disaster occurred, also have their own losses. In Tuscaloosa Alabama during all of those tornadoes in early 2011, many car rental agencies had experienced severe losses, and a few of the auto rental agencies their lost every single car they had.

That’s a huge loss, and yes whereas insurance will pay for it, they will not be able to participate in filling the demand in the market place of all the rental cars that are needed after the disaster. Think of all the insurance company adjusters, and people that come into town due to the disaster, they’ll have to rent cars, along with all the local residents and businesses. Cars must be brought in from all over the place, and large Auto Rental brand names with their franchised dealers and corporate owned stores have to get cars from anywhere they can.

They call this controlled chaos in the auto rental industry, when responding to such a natural disaster. There was an interesting article recently in Rental Car News titled; “Rental Car Demand Spikes in Japan Quake Area” posted on July 6, 2011 which took a look at the Tsunami and Earthquake disaster in Japan and how that affected the rental car industry there. The article stated;

“Rental car demand has spiked in northeastern Japan after the March earthquake and tsunami, reports Mainichi Japan. Car rental industry groups in Miyagi and Iwate prefectures estimate demand up 50% & 30% higher from last year as residents and companies need transportation. In Miyagi Prefecture about 900 vehicles or 10 % of the fleets owned by 124 member firms were damaged or destroyed by the tsunami. Seventy firms reported damage from the quake & tsunami & 13 lost their head offices.”

These challenges with renting cars for auto rental agencies are obviously a global issue. The New Zealand earthquakes also had auto rental agencies with severe damage to cars. So what happens is when there is a large natural disaster anywhere in the world, many of the auto rental agencies cars are damaged or destroyed, therefore lessening the supply at a time when massive demand in the marketplace presents a huge opportunity.


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