[DGthe3]

Rental sales are bad in 3 ways.


Rental companies tend to buy cars that are cheap with and with few, if any, extra options. This means they are low margin to begin with.

Next, fleet sales are normally discounted even more than whatever incentives you happen to find at the dealers lot (buy in bulk to save!), driving down profit margins even further

Lastly, this is one that concerns owners & dealers more than the manufacturer. Rental cars pull down the average resale value of cars sold via retail. So even when a customer comes back a few years later, that person gets less on their trade in and the dealer makes less on reselling the used car. Similarly, it also drives up the cost of leasing because of the higher depreciation rate.

Selling cars to rental fleets is a way to keep the factory turning out cars. But thats about it. Saying a sale is a sale is like saying a job is a job -you're getting paid. So what if its a part time job paying minimum wage? Thats the same as getting a $65k a year salary in an office somewhere, right?

Also, the idea that the tooling is 'paid off' on old cars is BS to me. Development costs and tooling are one time deals. You pay for it before you start building, with money you made from selling other cars. Not by transferring any and all profits from a new car sold into the 'tooling debt' for each individual model, until such time as the tooling is paid for and then you get to pocket the money as profit. I mean, does that not sound insane if you are a century old automaker that has to buy multiple sets of tooling each and every year and have a revenue of many, many, billions of dollars to do it with?