Enterprise Holdings, through its regional subsidiaries, operates the Enterprise Rent-A-Car, Alamo Rent A Car and National Car Rental brands. Combined, the three brands have a fleet of more than 1 million vehicles, which translates into more than 50 million rental transactions annually. Over the past few years, the relationship between automobile manufacturers and the car rental industry has evolved, and Enterprise Holdings recognizes the value of being a strategic partner to automakers.
Based on customer feedback, the Enterprise Holdings team had a hypothesis it knew would interest manufacturers: Does renting from Enterprise lead to new vehicle sales? Based on years of consistent customer feedback, Enterprise knew its rental cars exposed consumers to brands and vehicles in unique and impactful ways. Enterprise employees repeatedly heard that customers were interested in buying the exact make and model they rented based on their positive exposure to the product. But, they had no hard data to prove it.
That's why the company engaged Automotive to conduct a study of the buying behaviors of its vehicle renters. This study tests the hypothesis that renting a car from one of Enterprise Holdings three brands essentially serves as an extended test drive.
Credible Data Paired with Expert Analysis
In the past, Enterprise Holdings had conducted smaller qualitative studies with customers to better understand the link between vehicle rental and purchase. But, it was difficult to obtain a large enough sample size and the necessary quantitative data to draw definitive conclusions. The Enterprise team knew that IHS Markit could provide access to the entire universe of available US vehicle registration records and the analytical expertise to understand the link between rental and purchase.
Enterprise Holdings' renters purchased 1.3 million new vehicles within six months of renting – that's 1 out of 10 new cars sold in the US.
IHS Markit performed a buy rate analysis of the 24 million consumers who had 46 million rentals during the previous year. By matching Enterprise Holdings' customer rental records to registration data, IHS Markit quantified the percentage of renters who purchased a vehicle within six months after renting. To give Enterprise Holdings (and ultimately its manufacturing partners) more valuable insights, IHS Markit provided the data at a make and model level. The study looked at the three rental brands (Enterprise, National and Alamo) and seven types of vehicle rental situations served by the brands: airport, body shop, corporate, dealership, home city, insurance and retail. Consumers who rent vehicles because their cars are damaged or totaled are of special interest because many of them are, or soon will be, in the market for a new vehicle. (The Enterprise Rent-A-Car brand pioneered the insurance replacement car rental market segment and today holds a sizable share in this business.) IHS Markit and Enterprise Holdings delved into questions of loyalty and conquest by contrasting the brand customers rented to the vehicles in customers' garages. Through this analysis, Enterprise Holdings gained quantifiable insights into the percentage of its customers who went on to buy the model they rented and did not already own.
The combined buy rate and garage composition analysis produced data that Enterprise Holdings is sharing with automakers to prove the value of exposing consumers to their vehicles through renting.
Enterprise Holdings Provides Value to Auto Manufacturers
Nameplate exposure drives sales of the brand.
- As compared to the average US consumer, Enterprise Holdings' customers were, on average, three times more likely to purchase the non-luxury brand vehicle they rented.
Enterprise Holdings' rental customers are more likely to buy new cars.
- Consumers that rented through an Enterprise Holdings brand bought a total of 2.9 million vehicles annually.
- Enterprise Holdings' renters purchased 1.3 million new vehicles within six months of renting – that's 1 out of 10 new cars sold in the US.
- Renters are 55 percent more likely to buy a new vehicle and 45 percent more likely to buy a used vehicle than the average US consumer.
- Enterprise's replacement customers are 96% more likely to buy a new vehicle than the average US consumer.
Renting a vehicle is an effective test drive of that specific model.
- On average, Enterprise Holdings' customers are 26 times more likely to purchase the specific model they rented than the average household.
- For a major automaker, consumers were 3 to 18 times more likely to purchase a particular model (depending on the model) after renting it.
Vehicle rentals drive conquest sales.
- On average, 77 percent of consumers who purchased the same brand vehicle they rented from an Enterprise Holdings brand did not already own that brand.
- For one large domestic brand, 13.2 percent of all their annual conquest sales came from Enterprise Holdings' customers.
IHS Markit's findings prove what Enterprise knew from listening to their customers: car rentals are a great test drive. The study helped increase Enterprise's credibility with the manufacturers, which puts them in a more strategic, value-add position.