U.S. Automakers Have an Image Problem

Dagen McDowell
The American car's image problem can be summed up in one word: Rental.

Take the Saturn Ion my husband and I rented over a recent weekend — the 25-year-old car we own compares favorably to this brand-new ride. In fact, our old car drives like a Lexus next to Saturn's big piece of plastic.

The damage done by the rental business is both psychological and fundamental. First, the condition of a rental is often abysmal. You get behind the wheel of a car with just a few thousands miles on it, but it looks and feels like it's been driven across the country and back. Twice. Without being cleaned.

The car is often dirty, pure and simple. The Saturn we drove had a giant stain on the floorboard and dust everywhere else.

The car often drives like it's been abused by every renter before you. The wheel alignment is off. The tires aren't inflated enough. The hubcaps and tires are damaged from crummy drivers ramming curbs. The interior smells like a cheap motel room that's been sprayed with even cheaper air freshener. As one of my co-workers put it, “A rental car's always been so dogged out. Drivers abuse their rentals. It will always be a piece of junk, unless you're the first person to drive it.”

I can second that. The only decent rental I can remember is a convertible Chrysler Sebring that had 12 miles on it.

Then there are other irritations, like color: I hate green cars. I always seem to wind up with one when I rent. That Saturn Ion was — no surprise — a lovely cypress green.

The cars that rental agencies have historically bought are often mass-market cars with bare-bones equipment, although that problem is improving, as formerly optional equipment becomes standard in more recent model years.

All of these cosmetic issues tarnish the overall image of American cars. But Jesse Toprak, an industry analyst at Edmunds.com, says the primary rental-related problem comes down to simple supply and demand. “The higher the number of cars you send to rental companies, the lower the residual value. And that has a direct impact on brand image,” says Toprak. “The real hit to value occurs when cars come out of rental service and get sold at auction. The more you have, the less it's worth.”

To be sure, U.S. automakers are trying to dial back their fleet and rental sales and spruce up the cars they do sell to rental agencies — all in an effort to spiff up brand image.

But Toprak says it appears that the Big Three are still sending over 30 percent of their monthly sales to fleet and rental companies. “A huge number,” he says. Compare that to single-digit percentages at Toyota and Honda.”

Every car company should think about keeping more cars away from the rental agencies, even if it means sacrificing sales and profits in the short. The Volkswagen we rented earlier this year was so banged up, I swore I would never buy one after seeing how poorly that Jetta was operating.

But the rental companies can help out by at least cleaning up the cars they do rent.

And I have one word for Enterprise: Vacuum!

Dagen McDowell is a business correspondent for FOX News Channel. She appears regularly on "Your World with Neil Cavuto," and "Cashin’ In."