Rent-a-wreck Trades In Its Beat-up Car-rental Image

Arrive at Rent-A-Wreck's new store here and you won't find wrecks. Instead there's a shiny late-model Hummer, a Lincoln MKZ and a Mercedes-Benz SLK 280 two-seater convertible.

It was the Mercedes that drew Rob Jones, a United Parcel Service driver in Baltimore, to first try Rent-A-Wreck.

"I saw that convertible out front and it (had a sign saying) 'rent me' and I had to," he said.

Jones and his wife kept the car for a two-day trip to Washington, D.C., and paid a cool $414.

But he says it's not the competitive prices that keep him loyal to Rent-A-Wreck.

"My biggest thing is how I'm being treated," he says. "Rent-A-Wreck has been so good I've never wanted to stray." Founded in Los Angeles in 1968, Rent-A-Wreck carved out a niche for itself as a cheap rental option. In the '70s it gained publicity when it became known that celebrities were getting cars from Rent-A-Wreck because paparazzi never suspected stars would drive beat-up cars.

Now, Rent-A-Wreck is trying to transition from an image as a rental option of last resort to a viable alternative to Hertz, Avis and Enterprise for cash-strapped Americans looking for bargains.

The company and some franchisees say the recession caused a wider range of customers to find their way to one of Rent-A-Wreck's 183 locations. The trick now, they say, will be to keep them as the economy improves.

Changes have come steadily since it was bought in 2006 by Fitzgerald Auto Mall, a privately held group of more than 30 car dealerships that sells nearly 20,000 cars a year. Owner Jack Fitzgerald, President Bill Cash and Vice President Mike DeLorenzo have set about remaking Rent-A-Wreck's worn image.

To get there, the new ownership is taking what it considers long overdue steps � such as allowing customers to book cars online for the first time. The company also crafted a partnership with travel search site Kayak.com and hopes to make it onto online travel agencies such as Orbitz and Expedia in the future, says Jason Manelli, director of marketing for Rent-A-Wreck.

And under DeLorenzo, franchisees have been urged to buy better cars. Rather than buying a car and renting it out until it sputters to death on a highway � losing a customer in the process � he is advising franchisees to buy newer cars and save on long-term repair costs. He also advises them to buy sexier cars to help attract new customers such as Jones.

Rent-A-Wreck also now has four area development managers who advise new franchisees on getting the most value when buying cars at auction or, increasingly, off the Web. The company hosts meetings between franchisees and corporate employees to go over what is and is not working at their stores.

Rent-A-Wreck, unlike bigger rental companies, deals exclusively in used cars, allowing franchisees to buy flashier, albeit older, cars and rent them for less.

For instance, a bought-used Ford Fusion at one of Rent-A-Wreck's stores rents for $39 a day, while a bought-new Fusion costs $52 at Avis � a $91 saving over a week.

But changes aren't coming instantly, says auto-rental expert Neil Abrams, president of Abrams Consulting Group. "You don't transition in a year or two. It's all about ownership and their commitment and patience to build something." But, he adds, "It's definitely doable." It takes patience to reinvigorate a brand � and even more patience when you have to deal with franchisees.

The move online � forcing franchisees to reserve cars for people sight unseen for the first time � wasn't well-received by all of them at first, some owners say. But eventually, when they saw reservations and cash start flowing, they came around to embrace the change.

Larry Kirmsee, a Rent-A-Wreck franchisee since 1979 and a self-described "car guy," says he thought he knew about everything he needed to know about the rental business, and that included avoiding the Web.

"Our business has always been about the phone book," he says. "If you were at the front page of the phone book, you were getting most of the calls." Now he's embraced the Web.

"I actually think we could do more," he says.

Fitzgerald, founder of the Fitzgerald Auto Mall, says Rent-A-Wreck appealed to him because it offered people an affordable way to get into the auto business.

"Being a car dealer is so expensive now," he says. "It offers a chance for a person that might have wanted to be a car dealer. They can work their way into it through Rent-A-Wreck." Buying a franchise costs $12,000, followed by approximately $20,000 to $25,000 for start-up costs such as leasing space and outfitting the office. Thousands more are needed for initial payroll and insurance costs. But the largest cost, by far, is actually buying a fleet of cars to rent. With cars going for $8,500 to $25,000, that runs into the hundreds of thousands, at least, depending on fleet size.

Rent-A-Wreck suggests that franchisees can make the money go further by leasing surplus vehicles from other rental agencies. And the company also provides financing for those who qualify.

So does it make sense to keep the infamous company name when it doesn't, well, rent wrecks anymore? It does to owner Jack Fitzgerald. A study for Fitzgerald Auto Mall found 52% of Americans recognize the Rent-A-Wreck brand.

And besides, Fitzgerald says, "I just love that name."

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