Cars Rental Maps Expansion

The expansion move was an­nounced at the 4th annual conven­tion of Car Rental dealers in Fort Lauderdale Fla. Cars Rental cur­rently has more than 400 members.

James S. Hunt, Cars Rental board chairman, said the system's board of directors voted to eliminate the $1,050 franchise fee that has been in effect for the past 3½ years.

The new franchise plan will be offered to qualified dealers for $550, to cover the cost of an operat­ing kit which includes signs, sup­plies, contracts and manuals. Mem­bership also includes consultant services and bulletin services, Hunt said.

Herb Smith Jr., executive direc­tor of the system, said that to be eligible for a franchise, a dealer does not have to be in the rental or leasing business. Those without experience will be trained, he said.

According to Smith, Cars Rental is also planning an international expansion. Appointment of member dealers outside the United States will begin soon, he said.

Speakers at the convention in­cluded Thomas A. Coupe, sales vice president of American Motors Corp.; Norman W. Lewis, vice president of the Bank of Com­merce of Fort Lauderdale, Fla.; and Edward J. Bobit, editor and publisher of Automotive Fleet.

Lewis said that banks today look upon lease financing as an "in­creasingly important part of their loan portfolio" because leasing companies have convinced bankers "that it can be handled safely and with profit."

According to Lewis, most banks today will generally finance 90 to 100 per cent of invoice cost to lessors.

"Banks normally will not ap­prove credit on a lease finance transaction where the lessee is one to whom the bank would not make a similar loan on a direct basis," Lewis said. "In addition to credit analyses, banks carefully consider the type and value of equipment to be leased, its general marketability, insurance coverage, depreciation and terms and provisions of the lease."

Bobit spoke on the need for an upgrading of industry standards.

"There is a great opportunity for those in the renting and leasing field, but unfortunately there are many 'fly-by-night' operators who are giving the entire industry a black eye," Bobit said. "If the industry doesn't police itself, the government will step in and no­body wants government interven­tion."

According to Bobit, the problems now facing the renting and leasing industry are no different than those facing any relatively new industry.

"I'm sure that responsible lead­ers, such as those in attendance at this convention, will show the prop­er leadership," he said.

A highlight of the convention was the publication of the results of a survey showing the profit po­tential and cost factors for medium size rental and leasing dealers. The results, based on a average 75 car fleet, are reprinted on Page 23.

The survey showed that an av­erage 75 car rental dealer should be able to show a profit of $13,477 per year after taxes. The profit for a leasing dealer was $8,310 per year and the combined average for renting and leasing was $8,916.