Rental Car

Lincoln Is Tired Of Being In The Rental Car Business

Can you really blame them?

There was a time when it was not at all uncommon to see Lincolns on rental car lots. Think old school Continentals and Town Cars, both of which also have a long history with airport and hotel livery services. Part of that is about to change. Care to take a guess which one? We’ll just tell you: rental car companies. According to Automotive News, Lincoln has quietly cut back its fleet business this year as part of an effort to protect residual values, as well as to improve the automaker’s operational fitness.

It has supposedly cut deliveries to rental car companies such as Avis and Hertz, and has even reduced the number of company fleet cars. Lincoln brand director of marketing and sales, Robert Parker, explained to the outlet that these “are very deliberate efforts to really focus on residual values as our new products come out. What happens is those cars come back in six to 12 months. That's problematic on our residual values because that's when all the depreciation occurs. The longer they stay out, the better.” Already, Lincoln’s daily rental sales are down by 27 percent. Lincoln has noticed a rise in its customers leasing, as opposed to buying new vehicles, thus making it all the more important to protect residual values.

However, cutting back on fleet sales is hurting Lincoln in the short-term, as it’s already seeing a sales decline (even with strong Navigator demand). However, this strategy is expected to pay off in the long-term. Lincoln also has several new models on the way, so it wouldn’t be good for them to be launch at a time when their residual values are already guaranteed to tank. The exact opposite needs to happen.

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