FLEETS face massive increases in car hire rates after daily rental giant Hertz announced it was increasing its charges by an average of 15% with effect from September 21. All the major rental operators are likely to follow Hertz's move in the very near future, having openly expressed their desperate need to increase hire rates.

The cost impact for fleets will be even more severe due to the mounting pressure to pay a £10 fee for delivery and collection. An industry-wide rate rise of 15% would cost British business an additional £86 million per year, according to information in Marketline International's 'European Car Rental Report'. It found that corporate customers spent an estimated £574.3 million on car hire last year, a figure which would rise to £660.5 million if rental companies follow the lead of Hertz.

This would see the average UK rental charge rising from £22 per day to £25.30, in addition to the 95p per day levy which rental companies have been charging since July to cover the new vehicle registration fee. Charles Shafer, president of Hertz Europe, attributed the company's rate rise to falling residual values and soaring fleet costs. He acknowledged that the price rise was a 'bold' step, and said Hertz would now have to hope good commercial sense prevailed throughout the market.