Nick Pierangeli would have liked to have rented a car for trips to Chicago and North Carolina, but he is 24, and restrictions on rentals for younger drivers meant the Silver Spring resident had to take taxis and buses, or drive his own car.
Yesterday, he heard that Avis Group Holdings Inc. and Budget Rent A Car System Inc. have decided to give the 14 million Americans in the 21-to-24 age group a break. The two agencies, both owned by Cendant Corp., lowered their minimum renting age from 25 to 21.
"It's an extra expense to have to get taxis and learn a bus schedule," Pierangeli said, adding that a rental car provides flexibility.
In lowering their minimum renting age, Avis and Budget, which have more than 50 franchises in the Washington area, are following the lead of some competitors.
"We're trying to gain the business of younger drivers," said Susan McGowan, spokeswoman for Cendant Car Rental Group. "We want to get them at the beginning of their travel life cycle and hopefully keep them as customers for a long, long time."
But as anyone who deals with the travel industry knows, new policies usually mean new restrictions. The new Avis and Budget policy does not apply to people who rent in the District and at Reagan National Airport, because the airport's operator has a D.C. address. Renters there must still be 25 because of a District law that increases the financial risk to rental car companies, McGowan said.
Avis and Budget also will not rent to under-25 drivers in Iowa, Idaho, Connecticut and parts of New Jersey because of similar "vicarious liability" laws that make the vehicle's title holder ultimately liable for a driver's negligence, McGowan said.
At the downtown Avis location on M Street NW yesterday, district manager Bert Johnson found the new rules confusing and said he did not know what to think.
"What are my thoughts on this? I don't have any thoughts," he said. "I am still waiting for a memorandum to come down on why we are not renting [to under-25 drivers]. I just basically got an e-mail [from Cendant] saying the new policy does not apply to the D.C. area. I e-mailed them back, saying: 'Can we get something in writing why we are not doing it?' "
Told his company is citing the District's vicarious liability law, he said with a laugh: "I never heard of that."
Younger drivers already pose a greater risk because they have a "propensity to possibly have an accident," McGowan said. But Avis and Budget have long rented to under-25 drivers who are covered by corporate contracts.
Car rental companies attempt to cover their risk by imposing surcharges. As part of its new policy, Avis and Budget are tacking on a daily $25 fee to drivers ages 21 to 24. In New York, where a state law requires car rental companies to do business with anyone 18 or older, companies also add "young driver" fees -- generally $10 to $25 a day and higher.
Avis and Budget have a $110-a-day surcharge -- "hefty," McGowan called it -- for under-25 drivers in New York.
The surcharge often ends up being higher than the daily rental rate charged on economy-class cars, said industry analyst Neil Abrams, president of Abrams Consulting Group Inc.
"So a $25 surcharge can almost double the cost of the rental," he said.
The surcharge could be eliminated if President Bush signs the federal highway bill that includes a ban on vicarious liability, industry experts say.
Yesterday, younger drivers welcomed the new policy.
Ryan Newcomer, returning a Budget car at Dulles Airport, said turning 26 has made his life much easier because he now has his choice of rentals. "Now I use whatever is cheaper on the Internet," said Newcomer, from Salt Lake City, who travels as a manager for a residential alarm company.
Meanwhile, Hertz -- Avis's longtime top competitor -- is still renting only to drivers 25 and older. But a Hertz spokesman said the company is studying Cendant's move.
Some Avis and Budget competitors reacted to the new minimum-age policy with a yawn. "This is a non-event," said Charles Pulley, spokesman for Vanguard Car Rental USA Inc., which owns National Car Rental and Alamo Rent A Car LLC. "We've had this policy forever."
Avis and Budget rolled out the policy as they announced a general price increase of $5 a day and $20 a week on rentals, starting Sept. 10.
Staff writers Larry Liebert, Jena Moreno and Ellen McCarthy contributed to this report.