National Car Rental has warned insurers that the impact of manufacturer fleet restrictions and price rises in the vehicle rental sector is likely to have a knock-on effect in the insurance replacement market.
The company is calling for closer collaboration between vehicle rental suppliers, insurers and accident management businesses to identify ways in which costs can be controlled.
National Car Rental said the ‘bulk' purchasing power of rental companies has previously meant that heavily discounted deals could be negotiated with manufacturers.
However, in the past year, motor manufacturers have seen profits fall as sales of new cars sank to their lowest level in 13 years.
As a result, manufacturers have been looking for ways to improve the margin on new car sales and the deals rental companies have previously enjoyed are no more.
In addition, the quota of vehicles supplied to vehicle rental businesses is being severely limited.
The company said this means insurers could face a shortage in the supply of vehicles for their customers and increased costs for vehicle rental. It will also affect Insurers' courtesy car provision via body repairers.
Lorraine Farnon, UK sales director for National Car Rental said: “Inevitably, the issues we are facing as an industry will have a significant impact on the future cost of daily rental – especially that paid by high volume users such as insurers, fleet suppliers and businesses.
"We need to work even harder at controlling costs and we believe this requires a combined effort from the vehicle rental providers and our customers in the insurance sector."
