Am I too cheap? How to tell if your car hire rates are too low

By the DayRunner team · 7 November 2026

You're probably too cheap if you're well under the market median for your desk type, the cheapest on most days, booking up faster than last year, and rated as well as or better than the brands charging more. Any one of those can have another explanation. Three or more together usually means money left on the table. The fix is a small, measured price rise, tested on part of your calendar first.

Why it's easy to miss

Being too dear shows up fast. The phone stops, the calendar empties, and you know.

Being too cheap feels like success. The fleet is busy, the team is flat out and you sell out early. Nothing tells you that the customers who booked last month would have paid NZ$20 more a day.

Six signs

1. Your market rate index is well below your desk type's norm. Market rate index is your rate divided by the market median for the same car type and day. In the Rate Pulse sweep of 7 Nov 2026, the median index for shuttle-bus brands was 0.70 at Christchurch and 0.74 at Auckland. In-terminal brands sat at 1.12 and 1.02. If you're in the terminal at 0.85, that's low for where you are.

2. You're the cheapest on most days. Rate Pulse's Benchmark section shows how many of the next 14 pick-up days you're the cheapest brand for each car type. Cheapest on 2 days in 14 might be fine. Cheapest on 10 is a position you should have chosen on purpose.

3. You're booking ahead of pace. Compare bookings on hand with the same point last year. Running 20% ahead with no new event or route to explain it usually means price.

4. You sell out early. If a car type sells out three weeks before the date, the people who wanted it in those last three weeks went elsewhere. Some of them would have paid more.

5. Your rating is at or above the airport average. If customers rate you as well as the brands charging 30% more, your service isn't what's holding the price down.

6. Your value-for-money sub-score is high. Rate Pulse shows each brand's value-for-money sub-score next to the airport average. A score well above average with a price well below the market means customers already think they're getting a bargain.

Real examples from the data

The Rate Pulse sweep of 7 Nov 2026 shows brands in exactly this spot. We've left the names out. You can see them on each airport's brand ranking.

Look at the first two rows. Both are shuttle-bus brands at the same airport. Both are rated above 9 by hundreds of customers. One prices at 0.40 of the market and the other at 1.04.

We don't know either brand's costs, fleet or strategy, so we can't say the first one is wrong. It may be filling a fleet it couldn't fill any other way. But the second row shows a shuttle-bus brand can price at the market and still earn the best rating at the airport. If you're the first row and didn't choose to be, you have room.

This is one snapshot, in a November shoulder period. Check your own airport for the next 14 days before you act.

The break-even sum

Before you raise prices, work out how many bookings you can afford to lose.

Break-even volume = (price − variable cost) ÷ (new price − variable cost)

Variable cost is what one extra rented day costs you: cleaning, wear, fuel top-ups, broker commission, card fees. Not the car's depreciation, which you pay anyway.

Worked example, hypothetical. Your compact rents at NZ$150 a day. Variable cost per rented day is NZ$45. You raise the rate 10%, to NZ$165.

• Margin before: NZ$150 − NZ$45 = NZ$105
• Margin after: NZ$165 − NZ$45 = NZ$120
• Break-even volume: NZ$105 ÷ NZ$120 = 0.875

So you can lose up to 12.5% of your compact bookings and still make the same money. Lose fewer than that and you're ahead.

If you're cheapest on most days and booking ahead of pace, losing 12.5% of bookings to a 10% rise is unlikely. That's what price elasticity measures, and you'll learn yours by testing.

How to test a rise safely

1. Pick one car type

   The one that sells out first.

2. Pick a test window

   Four weeks of pick-up dates, at least 30 days out, so there's time for bookings to come in.

3. Raise by 5% to 10%

   Not more on the first test.

4. Leave a control

   Keep a similar car type, or similar weeks, at the old price.

5. Track pace weekly

   Bookings on hand for test vs control, against last year.

6. Decide after four weeks

   Keep, go further, or roll back.

Worked example, hypothetical. You run 25 cars, 8 of them compacts, from a desk in the terminal. Your compact index is 0.78 and you're the cheapest in-terminal brand on 9 of the next 14 days. Your rating is 9.1 against an airport average of 8.8.

You raise compact rates for pick-ups 30 to 58 days out by 8%. Four weeks later:

Compact pace dropped 7 points. The control barely moved. So the rise cost some bookings, but you're still 11% ahead of last year at an 8% higher rate. On those numbers, keep it and try another 5% next month.

A scorecard you can copy

Score each sign 0 or 1. Do it per car type.

When cheap is right

Low prices make sense sometimes:

• you're new, with few reviews, and need volume to build them
• your rating is well under the airport average and you're fixing it
• it's a weak week and the cars would otherwise sit
• you're deliberately the budget brand, with costs to match

The test is whether you chose it. If you did, write down why, and check it every quarter.

Checklist

• Index checked against your desk type's norm
• Days cheapest counted for each car type
• Pace compared with last year
• Sell-out dates checked
• Rating and value-for-money compared with the airport average
• Break-even volume worked out before any rise
• Test set up with a control

If you're worried a rise will just start a fight with the brand next door, read how to avoid a car hire price war. For the wider method, see how to price car hire against the market.

Questions