Rentals that open at one location and close at another are called one-way rentals. One-way rentals can occur between two owned locations or between an owned and a foreign location. In any case, one-way rentals represent an additional cost to the rental operation:
To recover these costs and to either discourage (or encourage) one-way rentals, an additional charge is added to the transaction: a "Drop Charge".
Drop Zone - a group of locations which share a common charge when any of the member locations are the destination on a one-way rental. The use of Drop Zones can radically cut down on the data entry required. For more on this, see Section V.G below.
Drop Category - category codes can be assigned to Vehicle Class Codes. This allows Drop Charges to vary based on Class. For more on this, see Section V.A below.
Drop Schedule - schedule codes can be assigned to rental rates or Privilege Codes. This allows Drop Charges to vary based on the profitability of the rental rate or for privileged clients. For more on this, see Section V.B below.
III. THE MEANING OF RECORDS IN THE DROP CHARGE FILE
Drop Charges are set up in the program Edit Drop Charges. But the meaning of these records is set by a field in the Edit Miscellaneous Control Fields program:
Page 2, Field 14: Penalty Drop Charge
| OPTION: __ EDIT MISC. CONTROL FIELDS (Page 2 of 7) 1 Enforce Password Change 21 Batch Close Default Curr Loc 2 Password Lifetime 22 Transaction Logging 3 Password Warning Days 23 Search/Save Additional Drivr 4 Enable Res Quotes 24 Addl Driver Cust Type 5 Quote Expire days 6 Charge Vehicle License Fee 25 Use Corp ID Data 7 Validate Cust Type 26 Rules Days Chargeable? 8 Disallow Spec Char in RA# 27 Enable Shift-F5 on Wholesale 9 Next Invoice No 28 Auth Pad Type (Amt/Pct) 10 Next DAS Transaction # 29 Auth Pad Value 11 Enable Fuel Card Tracking 30 Include in T&M on DBR: 12 Pre-Numbered RAs 31 Require Valid Adjuster 13 Amount Multiplier Code 32 Restrict Notes Mode 14 Penalty Drop Charge 500 33 Prompt Credit Warning 15 Metric System Used? (Y/N) 34 Prompt Last Rental Info. 16 Company Code (1=Cust info, 2=RA Info, 3=Both) 17 Refund Payable Acct# 35 Mask CC Numbers 18 Next Terminate # 36 Out of Vchr Days at Tier 1 19 Use Reimb Accts 37 Default Check Out Odom 20 Shortfall msg in batch 38 Airport Arrival Option 1SAVE 2 3 4 5BACKUP 6 7HELP 8NXT PAGE |
1. If a Penalty drop charge has not been defined in Edit Misc., the Drop Charge file is used to define the drop charges that apply to selected pairs of locations. If a record does not exist for a pair of locations, a one way rental is allowed between those locations but no drop charge will be automatically applied.
2. If a Penalty drop charge has been defined in Edit Misc., the records in the Drop Charge file comprise the only acceptable pairs of drop locations. If a record for a pair of locations (even two owned locations) does not exist, a one-way rental between those two locations will not be allowed. One-way rentals between a pair of approved locations which are not subject to a drop charge must still be defined with the drop charge amount fields left blank.
IV. DIFFERENT METHODS FOR CALCULATING AND CHARGING DROP CHARGES
CARS+ offers five different ways that drop charges can be calculated and offered.
A. A Simple Drop Charge Amount
A vehicle goes from Location A to Location B on a one-way rental an additional charge of $100.00 is automatically added to the rental.
| OPTION: __ EDIT DROP CHARGES 1 From Location A 22 Drop Min Days 2 From Zone 23 Non-Rev time 24 Block Drop 3 To Location B 4 To Zone 5 Drop Category 6 DROP Schedule 7 Effective Date Rentals less than Charge Miles 8 9 100.00 10 11 12 13 14 15 16 17 18 19 20 Notes 21 Termination Date Modified 1SAVE 2NEXT 3ERASE 4DELETE 5BACKUP 6 7HELP 8 |
B. Distance between the two locations
The drop charge rate is assessed for distance, and the rate is stored in the opening Location's record.
If the distance between Locations A and B is defined as 200 miles and the Drop charge is calculated at $.50/mile, the drop charge will be $100.00. An advantage to this method is if the drop charges need to be increased or decreased, this can be done by simply changing the rate per mile. By doing that, all mileage based charges are adjusted. (The simple charge above requires that each individual Drop Charge be edited).
| OPTION: __ EDIT DROP CHARGES 1 From Location A 22 Drop Min Days 2 From Zone 23 Non-Rev time 24 Block Drop 3 To Location B 4 To Zone 5 Drop Category 6 DROP Schedule 7 Effective Date Rentals less than Charge Miles 8 9 10 200 11 12 13 14 15 16 17 18 19 20 Notes 21 Termination Date Modified 1SAVE 2NEXT 3ERASE 4DELETE 5BACKUP 6 7HELP 8 |
C. Affected by length of Rental
The rate can be changed based on the length of the rental.
| OPTION: __ EDIT DROP CHARGES 1 From Location A 22 Drop Min Days 2 From Zone 23 Non-Rev time 24 Block Drop 3 To Location B 4 To Zone 5 Drop Category 6 DROP Schedule 7 Effective Date Rentals less than Charge Miles 8 5 9 100.00 10 11 7 12 75.00 13 14 10 15 50.00 16 17 18 19 20 Notes 21 Termination Date Modified 1SAVE 2NEXT 3ERASE 4DELETE 5BACKUP 6 7HELP 8 |
In this case, one-way rentals between Locations A and and B have Drop Charges applied as follows:
This same logic can be used to adjust the mileage based Drop charges as illustrated below:
| OPTION: __ EDIT DROP CHARGES 1 From Location A 22 Drop Min Days 2 From Zone 23 Non-Rev time 24 Block Drop 3 To Location B 4 To Zone 5 Drop Category 6 DROP Schedule 7 Effective Date Rentals less than Charge Miles 8 5 9 10 200 11 7 12 13 150 14 10 15 16 100 17 18 19 20 Notes 21 Termination Date Modified 1SAVE 2NEXT 3ERASE 4DELETE 5BACKUP 6 7HELP 8 |
| OPTION: __ EDIT DROP CHARGES 1 From Location A 22 Drop Min Days 10 2 From Zone 23 Non-Rev time 24 Block Drop 3 To Location B 4 To Zone 5 Drop Category 6 DROP Schedule 7 Effective Date Rentals less than Charge Miles 8 9 100.00 10 11 12 13 14 15 16 17 18 19 20 Notes 21 Termination Date Modified 1SAVE 2NEXT 3ERASE 4DELETE 5BACKUP 6 7HELP 8 |
Like the previous examples, Field 22 tells the system that rentals of 10 days or more are exempt from a Drop Charge between Locations A and B. But instead of simply applying the $100.00 charge for rentals less than 10 days in length, the system does an alternate calculation using the RA's T&M daily rate as follows:
Drop Charge to go from Location A to B = $100.
Drop Minimum Days field = 10 days.
Daily rate on the RA = $50
1. The customer keeps the vehicle 7 days.
The difference between the minimum of 10 days and the elapsed of 7 days = 3 days. Multiplied by the daily rate of $50, the result is $150. Since the Drop Charge of $100 (in field 9) is less, it is used.
2. The customer keeps the vehicle 9 days.
The difference between the minimum of 10 and the elapsed of 9 = 1 day. When multiplied by the daily rate of $50, the result of $50 is less than the $100 Drop Charge. Therefore, the amount charged for the Drop will be $50; not $100.
3. The customer keeps the vehicle 10 days or more.
No drop charge.
E. Temporary Drop Charges
This program allows a temporary change to the standard drop charges.
| OPTION: __ TEMPORARY DROP CHARGES 1 From Location A 2 To Location B 3 Start Date 09-01-16 4 End Date 09-15-16 5 Drop Type D T = with Schedule Codes, D = without Schedule Codes 6 Class blank = all classes 7 Drop Charge 150.00 1SAVE 2NEXT 3ERASE 4DELETE 5BACKUP 6 7HELP 8 |
The example above temporarily increases the Drop Charge to $150.00 for two weeks. Note that these temporary drop charges apply to all Drop Categories and all Drop Schedules.
V. VARYING THE DROP PRICE BY OTHER FACTORS
A. Class of Vehicle.
The drop charge on a minivan can be made more expensive than that of standard passenger cars. This is done by way of the Drop Category Codes. Drop Category Codes are set up in the Edit Class codes record as shown below:
| OPTION: __ EDIT CLASS CODES 1 Location A 2 Class Code VN 21 Disc.Time Only 3 Description MINIVAN 22 Book W/U Res? 4 Pricing Code 23 Lot Screen Ava? 5 Minimum Age 24 Max Passengers 6 Under Age Srchg 25 Max GVWR 7 Res warn % 1 26 Pct 2 days out 8 Res warn % 2 27 Rentable 9 Class Hierarchy 10 EDRB Flag 11 Drop Category V 12 Use in Planning 13 LDW Resp Ex 14 Addl ID Req 15 Use INVAVL 16 Class Auth Pad 17 Surcharge 18 Asset type Code 19 Conversion Code 20 URL 1SAVE 2NEXT 3ERASE 4DELETE 5BACKUP 6 7HELP 8 |
The Category Code is then used in Field 5 of the Edit Drop Charge screen.
| OPTION: __ EDIT DROP CHARGES 1 From Location A 22 Drop Min Days 2 From Zone 23 Non-Rev time 24 Block Drop 3 To Location B 4 To Zone 5 Drop Category V 6 DROP Schedule 7 Effective Date Rentals less than Charge Miles 8 9 200.00 10 11 12 13 14 15 16 17 18 19 20 Notes 21 Termination Date Modified 1SAVE 2NEXT 3ERASE 4DELETE 5BACKUP 6 7HELP 8 |
| OPTION: __ EDIT RENTAL RULES/RATES (Page 2 of 5) Rate set AP 17 Min days 18 Chg to Product CORP2 19 Max days 20 Chg to Date 05-02-16 21 Intercty chg to Time 0000 22 Drvr Min Age Comment STANDARD CORP RATE 2 Rate type 23 Allow Zero Rates 1 Earliest pickup MON 2 Time 0000 24 VLF Exempt 3 Latest pickup MON 4 Time 0000 25 AGEnn Exempt 5 Earliest return MON 6 Time 0000 26 Surchg exempt 7 Latest return MON 8 Time 0000 27 Block FT 9 Problem return chg 28 Cross-reference Product 10 End method 29 Seasonal? Y/N 11 Early-late(ELBO) 30 Multi Period? Y/N 12 Package rate 31 Report RQ 13 Wknd Rate Max Days 32 Res Only 14 Wknd Options 33 Advance Days 34 Drop Schedule 1 15 Start Day MTWTFSS Quick Price Edit Fields: 16 Start Day Chg-to 35 Tier1 36 Tier2 37 Tier3 41 Est.Mi.a Day/Shutttle?*/* 38 Tier4 39 Miles 40 Intcty 1SAVE 2NEXT REC 3ERASE 4PREV REC 5BACKUP 6 7HELP 8NEXT PAGE |
This code is then used in Field 6 of the Drop Charge record. In this example, customers renting with Corporate Rate 2 are given a discounted Drop Charge of $50.00 when renting between Locations A and B.
| OPTION: __ EDIT DROP CHARGES 1 From Location A 22 Drop Min Days 2 From Zone 23 Non-Rev time 24 Block Drop 3 To Location B 4 To Zone 5 Drop Category 6 DROP Schedule 1 7 Effective Date Rentals less than Charge Miles 8 9 50.00 10 11 12 13 14 15 16 17 18 19 20 Notes 21 Termination Date Modified 1SAVE 2NEXT 3ERASE 4DELETE 5BACKUP 6 7HELP 8 |
| OPTION:___ EDIT PRIVILEGE CODES Page 1/2 1 Location 2 RT Code D1 3 Description DISCOUNTED DROP 4 Apply to all rates? CORPORATE SURCHARGE 5 Unlim.Minimum Age 21 Start Day (1=Sun, 7=Sat) 6 Block FreqFlier 22 Start Time 7 Override APTAX/CNFEE Exempt 23 End Day 8 Pricing Code 24 End Time 9 NVL Disc 25 Length 10 NVL Dly Disc 26 Daily amt 11 Override AGEXX Charge 27 Weekly amt 12 Drop Exempt 28 Monthly amt 13 Fuel Card 29 Hourly amt 14 Exempt APTAX 30 Walkup Only 15 Exempt VLF 16 Drop Schedule 1 31 Exempt Option 17 Deposit Exempt 32 Prompt MRA 18 Auto-apply Option 33 Best Rate Close 19 N/C LDW 34 Fuel Card Open 20 Note 35 Fuel Card Res Class 1SAVE 2NEXT 3ERASE 4DELETE 5BACKUP 6 7HELP 8NEXT PAGE |
C. Both Drop Category and Drop Schedule codes can be used together
| OPTION: __ EDIT DROP CHARGES 1 From Location A 22 Drop Min Days 2 From Zone 23 Non-Rev time 24 Block Drop 3 To Location B 4 To Zone 5 Drop Category V 6 DROP Schedule 1 7 Effective Date Rentals less than Charge Miles 8 9 75.00 10 11 12 13 14 15 16 17 18 19 20 Notes 21 Termination Date Modified 1SAVE 2NEXT 3ERASE 4DELETE 5BACKUP 6 7HELP 8 |
D. Drop Charges Can Vary by Rental Date
By making use of the Effective Date, records can be made to change based on the seasonal changes of your renting population.
E. Drop Charges Can Vary Between Different Locations and
F. Negative Drop Charges
The following record reverses the two locations that we have been using in the examples so far -- which is that the fee for going from A to B is $100.00. The record below is the fee for going from B back to A.
| OPTION: __ EDIT DROP CHARGES 1 From Location B 22 Drop Min Days 2 From Zone 23 Non-Rev time 24 Block Drop 3 To Location A 4 To Zone 5 Drop Category 6 DROP Schedule 7 Effective Date Rentals less than Charge Miles 8 9 -50.00 10 11 12 13 14 15 16 17 18 19 20 Notes 21 Termination Date Modified 1SAVE 2NEXT 3ERASE 4DELETE 5BACKUP 6 7HELP 8 |
G. Drop Zones
To simplify data entry, owned and foreign
locations can be assigned to a "zone". Thus, if the drop charge from a
location is the same rate to 15 other locations, the 15 locations could
all be considered in the same "zone", and only one entry would be
needed in Edit Drop Charges rather than 15 separate entries.
Each
Location Record and Foreign Location record in the Customer File can be
assigned to a "zone".
Drop charges can apply between 2 individual
locations, between a zone and a location, or between two zones. Use the program Edit Drop Zones to set up zones.
| OPTION: __ EDIT LOCATIONS Location # LAX (Page 3 of 7) 1 RES Warn Level 2 hard? 22 Restrict Ins opt to "INS" 2 RA Warn Level 2 hard? 23 Drop Chg Rate/Mile .50 3 Local Currency 24 Issue Credit for Fuel 4 Print VIN Number 25 Clone Lease RA's at Month-end? 5 Print PO Number 26 Transaction Types Allowed 6 (reserved) 27 Tax document print location 7 (reserved) 28 Minimum rental length 8 (reserved) 29 Minimum Due Days 9 (reserved) 30 Srchg Option 10 (reserved) 31 Dropbox 11 Res rate 32 Block Foreign Close 12 Drop Zone SCA 33 Currency Symbol 13 1st Pkgd Cvg 14 2nd 34 Symbol Place 15 No LDW Resp 35 16 Tax Renter 36 17 Damage Option Code 37 Nota Fiscal Print Lib no 18 Contact Phone 38 Refresh Rate 19 Contact 39 Hilite Hrs 20 Federal Tax ID # 40 Fuel Card Acct 21 Res. e-mail 1SAVE 2NEXT 3ERASE 4DELETE 5BACKUP 6 7HELP 8NXT PAGE |
To illustrate this concept, assume that Thermeon Rent a Car owns and operates 6 locations: 3 in Southern California and 3 in Northern California. These locations are in either the NCA (Northern California) zone or the SCA (Southern California) zone as follows:
|
SCA - Southern California Zone SAN San Diego |
NCA - Northern California Zone SFO San Francisco |
Assume that the following Drop Charge records are set up:
TABLE A
| |
FROM LOCATION : |
TO LOCATION : |
DROP CHARGE |
|
1. |
SCA |
NCA |
$300 |
|
2. |
NCA |
SCA |
$275 |
|
3. |
LAX |
NCA |
$250 |
|
4. |
LAX |
SFO |
$200 |
|
5. |
SFO |
LAX |
$175 |
|
6. |
SJC |
SFO |
- |
On a one-way rental, the system tries to find an exact match meeting the circumstances of the rental. An exact match of Location to Location is tried prior to going to Drop Charge records that use Zones.
Here are a few examples:
A. LAX to SFO - Because there is a separate record set up for these 2 locations (#4 above), the drop charge would be $200. The rule: a location to location record supersedes any record that involves zones. Even though the LAX/NCA and SCA /NCA could apply, the LAX to SFO record is used.
B. LAX to SMF - There is no separate record for these 2 locations. But SMF is a member of NCA (the Northern California Zone). Using #3 above, the drop charge would be $250. The rule: a location to zone record supersedes a zone to location or a zone to zone record.
C. SJC to SAN - There is no separate record for these 2 locations. However, SJC is part of the NCA and SAN is part of SCA (the Southern California Zone). Using #2 above, the drop charge would be $275. The rule: the rest of the hierarchy is a zone to location superseded a zone to zone record. Therefore the zone to zone record is the last record tried by the system
D. SJC to SFO - There is a separate record set up for these 2 locations (#6 above). The drop is allowed without a charge.
To summarize this portion of the hierarchy:
Location to Location records are tried first
Location to Zone records are tried second
Zone to Location records are tried third
Zone to Zone records are tried last.
One can easily imagine that the number of records in this file can
become extensive making rate changes a huge task. To aid in this, there is a program that allows you to edit Drop Charge records on a
spreadsheet and then import the records into CARS+. See the chapter on Import Drop Charges.
VI. DROP CHARGE HIERARCHY
Because so many items can influence the Drop Charge amount, a hierarchy has been established to determine the appropriate drop charge for each situation. The illustration below makes the following assumptions:
Table A (above) shows that the basic drop charge going from LAX to SFO is $200. Assume vans and trucks don't fall under the "basic" charge, and the drop charge for them is $250. (This can be designated in the Class Code file through the use of the "category" field. Assume that all classes of cars in the fleet were set up without a "Category", and that vans and trucks were set up as "Category 1.")
Assume that IBM has a corporate privilege code (referred to as Privilege Code "A") which is a discounted drop charge from LAX to SFO of $100 for a car and $150 for a van or truck.
TABLE B
|
From |
To |
Cate-gory |
Privilege |
Drop Chg. |
Comments |
|
LAX |
SFO |
- |
- |
200 |
Because there are no special privileges involved and it is a car rather than a truck (no "category"), the rate would be $200. This is referred to as the "basic" drop charge. |
|
LAX |
SFO |
1 |
- |
250 |
There are no special privileges but because it is truck, which is Category 1, the rate would be $250. (The category takes precedence over the "basic charge".) |
|
LAX |
SFO |
- |
A |
100 |
Because the customer has a privilege drop charge, the rate would be $ $100. (The privilege takes precedence over the "basic charge".) |
|
LAX |
SFO |
1 |
A |
150 |
Here there is a special category (the truck) and the customer has privilege, so the rate would be $150. (A record with matching privilege and category take precedence over all others.) |
To summarize this portion of the hierarchy logic:
A record with both a matching category and privilege is tried first
A record with a matching privilege but no category is tried second
A record with a matching category but no privilege is tried third.
A record without both a category and privilege is tried last.
Entire Hierarchy:
All of the above hierarchy logics are combined so that on each one-way rental, the Drop Charge is determined by finding a match using the hierarchy (from highest to lowest) as follows:
Location to location with category and privilege
Location to zone with category and privilege
Zone to location with category and privilege
Zone to zone with category and privilegeLocation to location with privilege
Location to zone with privilege
Zone to location with privilege
Zone to zone with privilegeLocation to location with category
Location to zone with category
Zone to location with category
Zone to zone with categoryLocation to location
Location to zone
Zone to location
Zone to zone
VII. DROP EXEMPT
The system can be set up so that under certain rental conditions, the rental is exempt from a normal drop charge. This can be done by:
A. Setting up a Drop Exempt Privilege Code.
| OPTION:___ EDIT PRIVILEGE CODES Page 1/2 1 Location 2 RT Code D0 3 Description DROP EXEMPT 4 Apply to all rates? CORPORATE SURCHARGE 5 Unlim.Minimum Age 21 Start Day (1=Sun, 7=Sat) 6 Block FreqFlier 22 Start Time 7 Override APTAX/CNFEE Exempt 23 End Day 8 Pricing Code 24 End Time 9 NVL Disc 25 Length 10 NVL Dly Disc 26 Daily amt 11 Override AGEXX Charge 27 Weekly amt 12 Drop Exempt Y 28 Monthly amt 13 Fuel Card 29 Hourly amt 14 Exempt APTAX 30 Walkup Only 15 Exempt VLF 16 Drop Schedule 31 Exempt Option 17 Deposit Exempt 32 Prompt MRA 18 Auto-apply Option 33 Best Rate Close 19 N/C LDW 34 Fuel Card Open 20 Note 35 Fuel Card Res Class 1SAVE 2NEXT 3ERASE 4DELETE 5BACKUP 6 7HELP 8NEXT PAGE |
Any renter with a CDPID Code which has the above Privilege code will be exempt from all drop charges for all classes between all locations. Such a set up may be too encompassing, therefore the following method may be used.
B. Setting up a zero rate Drop Charge record
| OPTION: __ EDIT DROP CHARGES 1 From Location SCA 22 Drop Min Days 2 From Zone 23 Non-Rev time 24 Block Drop 3 To Location SCA 4 To Zone 5 Drop Category P 6 DROP Schedule 1 7 Effective Date Rentals less than Charge Miles 8 9 10 11 12 13 14 15 16 17 18 19 20 Notes 21 Termination Date Modified 1SAVE 2NEXT 3ERASE 4DELETE 5BACKUP 6 7HELP 8 |
A. Edit Locations: There are two fields in the Location record which can be used as follows: