Holding cars longer and aging them does help preserve the residual value of units as long as you can keep the accumulated miles under control, one operator said.
Photo: Martin Romjue / Bobit Business Media
Rental car company owners and operators recently shared their views and analysis about how their fleets performed during the course of 2024.
Their insights, first published in the 2025 Auto Rental News Fact Book this month, add up to a business environment freed of some of the fleet market pressures of previous years.
In this Part 2 of the Operator Outlook series from the 2025 Auto Rental News Fact Book, the interviewees answered three two primary questions:
- So far in 2024, is your operation fleeting up, down, or steady?
- How have you adjusted your fleet cycling/remarketing strategy this year?
Fleet Volumes Prove Highly Individual in 2024
As to maintaining fleet volume, the operators reported a mix of fleet levels that were either up, down, or flat in 2024.
Midway Car Rental, York Car Rental, and Midwestern Wheels all grew their fleets.
Midway now runs a fleet of about 4,000+ vehicles — its highest to date — consisting of 250 different makes and models, ranging from a Bentley to a Toyota Corolla. Kolodziej and his team closely tracked vehicle purchasing, resale values, depreciation, and inventory during the last few years to find the best buying and selling cycles as it expanded it diversified and grew its client base.
Although York is up in fleet numbers in 2024, Fathi pursued a strategy of buying more vehicles until spring and then holding steady until seeing what would happen with key economic indicators later in the year. “We don’t know what the next (Presidential) administration will do so we stopped adding more cars and are keeping the fleet steady,” he said. “We also want to avoid negative incentives and interest rates.
A lot of rental companies are not doing well. Larger independents are closing, and more rental companies may close based on the data insights I’m seeing.”
Wallschlaeger added, “In 2024 we increased the size of the fleet to meet rental demand and replaced older vehicles we held longer than normal, post pandemic. There was availability, but we paid a price for that with more expensive vehicles that have a higher trim level. Manufacturers seem to keep lower end vehicles for retail given the significant increase in new vehicle pricing which meets the needs of the more cost-conscious buyers, which leaves higher-trim vehicles for fleet buyers.”
His fleet rose from 1,086 units in September 2023 to 1,170 in September 2024, for an increase of 7%. In the second half of 2024, competitors started buying more fleet vehicles with the result of the industry having more fleet vehicles overall, Wallschlaeger said. His operation will be balancing its fleet volume in coming months to reduce the number of vehicles going into winter while a competitive rental market is putting downward pressure on rental rates.
“Our Wisconsin market is split evenly between commercial and leisure business, however with a significant decrease in overall volume during the winter months.”
Hemmert said his operation strategically kept fleet volume flat for much of the year based on market signals. They got more usage by keeping the vehicles slightly longer than the typical 12–14-month cycle.
The NextCar corporate fleet declined 15% in volume in 2024 as the company right sized the number of vehicles to the demand, Dill said. Profits, however, remained strong throughout the year. “We weren’t over-fleeted, but the demand was unusually high before, so we are adjusting back down to normal demand levels.”
Midway Car Rental CEO Gary Kolodziej and his team closely tracked vehicle purchasing, resale values, depreciation, and inventory during the last few years to find the best buying and selling cycles as it expanded it diversified and grew its client base.
Photo: Midway Car Rental
Fleet Cycling Points to a Healthy Remarketing Climate
Midway targeted opportunities to lower fleet vehicle depreciation while holding the line to lower replacement costs, Kolodziej said.
“We cycle based on cost-going-forward which usually has the larger units cycling sooner, and the smaller less costly units running longer,” he said in the September online interview. “”We track our fleet equity monthly. I’m very involved in that process. I want to know exactly where we stand. What’s the price on that car today versus where we think it will be? That approach allows us to make buying decisions.”
At Fox/Europcar, Hemmert reports that the fleet operation has become more aggressive with resales, selling units at a faster rate because the company can more easily replace inventory. “It’s a good used car market but that period of high appreciation we saw with used car prices close to new car prices was unusual. That’s gone. Used resale values are now flat compared to 2019. Most of our used rental vehicles go straight to auctions.”
Fathi’s operation is connected to a dealership where it routinely sells its used rental vehicles. Q3 2023 slowed in used sales but was picking up again in early November 2024, he said. The company still must sell its vehicles at competitive prices given the high volume of rental vehicles that flow into auctions and the major car rental companies with retail outlets. “We are still competing with Hertz and Enterprise in the retail sector.”
Dill said the company has stayed on its resale schedule and not made any big changes in its remarketing approach. “We have a fleet plan we stick to, but we have built in flexibility.”
Since the pandemic, Midwestern Wheels has been faced with fleet cycling and remarketing strategies that seem to be changing in direction every year based on the market’s appetite for used inventory and what new fleet is available to purchase, Wallschlaeger observed.
“Fleet cycling has changed to hold vehicles longer in anticipation of buying fewer higher cost 2025 model year units and preserving residual values of our expensive 2024 model year units,” he said.
In remarketing, the company has focused more on retail car sales to help fill a local need and demand along with seeing a better return on value. But the operation still uses wholesale vehicle auctions as its primary source of remarketing.
“Holding cars longer and aging them does help preserve the residual value of units as long as you can keep the accumulated miles under control,” Wallschlaeger said. “When you get a good deal on a vehicle, you can cycle it in a 12-mointh period and do OK on the resale with a decent vehicle cost per month. Once you have higher cost vehicles, you need to hold them longer to allow for more depreciation over time. That means holding 2024 models longer and buying fewer 2025 models.”