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This may be a duplicate of Why is renting a car through a broker cheaper than directly through a car rental company? but I don't think the answer addresses a really large price difference.

I rented a car last week in Germany. Prices were unpleasantly high everywhere so I looked into third party providers, in this case "check24.de". They came in at less than 40% of renting the same car at the same company directly (Alamo in this case). Other brokers were offering similarly good deals.

I went for it, figuring there was enough margin to cover any hidden fees, surcharges and scam attempts. To my pleasant surprise, everything went great: my reservation was on file, already connected to my Enterprise Plus account (apparently there was a merger) and I even got a nice upgrade. Drop off was equally efficient and the total price paid was exactly what was originally advertised.

Question: How can a broker offer a 60%+ discount for the "exact same" car/company?

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    basically, they bought the rental slots in bulk, and now have to get rid of it.
    – njzk2
    Oct 27, 2021 at 19:39
  • I'd wonder what might be different - things like insurance cover or levels may explain part of it ?
    – Criggie
    Oct 28, 2021 at 1:32
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    @Criggie: no. Conditions were exactly the same
    – Hilmar
    Oct 28, 2021 at 6:47
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    "and I even got a nice upgrade." read it more like, "this broker client even got a bigger car because we had none other left"
    – EarlGrey
    Oct 28, 2021 at 16:53
  • 60% discount is not unheard of in many travel-related industries, be it hotel reservations, airplane/train tickets, taxis, restaurants, etc. Oct 29, 2021 at 13:30

2 Answers 2

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It is of course impossible to say what happened exactly in your case, but in other situations where I have come across similar savings from brokers, not only restricted to car rentals, but also hotel rooms and flight tickets, the broker often has had a 'minimum use' clause in their contract.

It may for example be, that the broker is managing 100 cars from the rental company's fleet and is additionally guaranteeing that at least 20 cars are in use at any time, if not, the broker may be required to pay the rental company for the use anyway as had the car been rented out. If the broker now realizes that it can't realistically expect to rent out 20 cars at a profitable rate due to low demand, the broker may decide to drop the rate so low, that they are in fact selling with a loss, but is still minimizing their losses.

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    For hotel rooms: This is the entire business model of one of the major players in travel bookings. In vast quantities. And no "minimum use" clause either: They buy the room nights outright and then selling them is their problem. (But not that much of a problem: they're very good at projections and their purchase price is very good.)
    – davidbak
    Oct 27, 2021 at 22:17
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    It works with travel packages as well, in the late 20th century one could pick up bucket deals from "teletext" to travel using the final and heavily discounted inventory at short notice. Basically an exercise in wholesale quantities.
    – mckenzm
    Oct 28, 2021 at 16:22
  • @davidbak Isn't "selling them is their problem" exactly what "minimum use" means? Oct 29, 2021 at 22:04
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    @mckenzm - my retired parents-in-law did this. They managed to holiday 3 or 4 times a year. Cyprus, Turkey, Yugoslavia, Greece, Portugal. Wherever. All inclusive. The cost was not much more than staying at home - they lived a short bus ride from Manchester Airport. Oct 30, 2021 at 8:03
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In addition to Tor's explanation, this kind of differential can arise from market differentiation. Travelers who shop through one of these brokers are likely to be particularly value-minded, and getting their business means selling for a lower price (which is still better than idle inventory). Travelers who go directly to a specific rental agency (because of various "loyalty" arrangements, corporate contracts, and so on) may be less price sensitive, and so the agency simply can charge them more.

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    (+1) This is usually called “price discrimination”, i.e. same product sold at different price points to different people. I would use “market differentiation” for the exact opposite: different products sold to the same people.
    – Relaxed
    Oct 27, 2021 at 23:20

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