Since the beginning of time, car rentals were only available by the day, by the week, by the mile. He rented a car and paid for the time used and the miles traveled. However, it was only a matter of time and circumstances before free mileage car rentals were offered.
In 1967 my partner and I took over a bankrupt car rental company and had three rental stations, Miami, 5th Street in South Beach, and the third in Ft. Lauderdale. At the time, Yellow Rent A Car, owned by Yellow Cab of Miami, with rental stations in Miami and Ft. Lauderdale, was offering a subcompact car with unlimited free mileage at $ 45 per week. They were the first and only car rental company with free mileage but with a minimum rental requirement of one week.
I can’t tell you what year they first offered free mileage, but I can guess why. They were only in South Florida, they were only dealing with the entertainment market, and Disney World, 200 miles north, was not open. The tenants did not use many miles. The competitive rate for a subcompact car in the 1960s was $ 5 per day, $ 25 per week. [5 times the daily rental] and 5 cents per mile. With a minimum rental of a week at $ 25 and with their weekly rate of $ 45 they would have the difference, or $ 20, to cover the cost of the miles. At 5 cents a mile, the customer could use up to 400 miles per week and the rental would be a wash. I later found out that this was a winner for Yellow Rent A Car.
To my knowledge, Yellow Rent A Car was the granddaddy of free mileage. His warning was a minimum of one week. My partner and I, owners of Capital Rent A Car, took another step forward. We were the first to offer unlimited free mileage for a day or more. No minimum rent of one week was applied. It couldn’t get any better than that and I’ll tell you how it evolved.
Our business was generated by advertising in local tourist magazines. We also pay a commission for referrals from hotel and motel owners, hotel doormen, and taxi drivers. We were like the other 20 to 30 local car rental companies that we competed with. We needed a head start and the idea of some kind of free mileage program intrigued us both.
Our business was with tourists and their average rent was 6 or 7 days. Looking at our completed rental agreements, the average number of miles driven in a week was about 250. If we offered a daily rate with a few free miles, would that fly? We think so and we could have offered 50 free miles and that would have covered the mileage needs of the average renter. But the fare we finally settled on allowed us to offer more miles. More than the average renter would use and would be perceived as a real bargain. The original offer of free miles included in the daily rate was 75 miles.
We were phasing out our Volkswagen, a subcompact car, at a rate of $ 4 a day, 4 cents a mile. Our compact car, a Dodge Dart that would become our leading car, had a rate of $ 6 per day, $ 30 per week, and 6 cents per mile. We came up with a daily rate of $ 8.50 that included 75 free miles. Typically the weekly rate was 5 times the daily rate and in this example 5 times $ 6 the daily rate was equal to $ 30 plus, of course, the mileage. With the free miles we decided that we would not offer a weekly rate. The tenant paid by the day regardless of whether the rent was for one day, 7 days or whatever.
Our business took off and why not. We were advertising “free mileage” in the local tourist magazines. At $ 8.50 a day it was a steal and I can only guess what thoughts our callers were having. The additional $ 2.50 per day on top of the $ 6 per day rental was a steal. They got 75 free miles so they didn’t have to worry about a mileage charge. Or possibly they thought $ 8.50 a day is cheaper than $ 49 a week, Yellow’s recently increased rate. Within 6 months we realized that no one was driving close to the equilibrium mileage figure. So we made the next best thing. We offer unlimited free mileage. It was the year 1969.
Soon after, we became aware of CATM. CATM is an acronym for Consolidated Air Tour Manual. A publication produced by the airlines operating in Florida. It was a compilation of rates from hotels, car rental companies, attractions and other tour support companies, including tour operators. Tour operators offered “packages” that included airfare, hotel and other services such as car rentals. The theory was that if a customer bought each component of the package separately, the cost would exceed the operator’s package price. Being in CATM airlines and travel agencies we could reserve our cars directly or through tour operators.
So we are at CATM and we find ourselves competing with the big boys, Hertz, Avis and National. Not so big at the time, but impressive, were Budget, Olins, maybe American International and Dollar A Day, which became Dollar Rent A Car. Our $ 8.50 per day and a weekly rate of $ 59 per week [we rounded the rate out] it stood by itself. No other car rental company offered free mileage and used the daily, weekly and per mile rate program. Two to three years later, Avis was the next car rental company to offer unlimited free mileage, but with a minimum of three days.
We first posted on CATM in 1970 and I bring this up because I said earlier that we, Capital Rent A Car, were the first to offer unlimited free mileage for a day or more. To substantiate this statement I must mention that in 1942 I was in my seventh grade workshop class and the teacher claimed that he invented the airplane before the Wright brothers. I’m not cheating on you and maybe he did. But if he did, he didn’t tell anyone, so Wilbur and Orville got the credit.
Maybe we weren’t the first with unlimited free miles and maybe someone at Okemos. MI or Rockford, IL did. But if they did, they didn’t tell anyone. We did it by being in a national publication, CATM. So we are going to take credit for being the first. The next time you rent a car and don’t pay for the mileage, you can thank us.
For those who wish to contest our claim, please contact me at my email address below. You can also read another of my Ezine articles, “Starting a Major Car Rental Company”, which is about the car rental business in the resource below.
