A rental car company has a very high fixed overhead. The interest and depreciation on the rental fleet stays the same whether business is good or bad. Payroll cost, insurance and rental of the premises are high and pretty well fixed as well. Now the economy is bad and people are not renting cars. The companies are having a hard time covering fied cost and they are probably showing losses.
The best way to solve the problem is to reduce the size of the rental fleet. But resale value of late model cars is low because of the economy is bad so they are locked in.What kind of problems does the car rental industry face?
no customers no one has money to go on vacation
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