Gas prices are changing the way folks rent cars – and changing the way the car-rental companies conduct their business.

It stands to reason that a company built around a product that runs on gasoline would be affected by higher fuel costs. But, there hasn’t yet been a marked drop in people renting cars. Rather, there have been changes in the way folks rent them.

“There is a major behavioral change that stems from the difference between $3 and $4 gas,” said Chris Payne, spokesman for Dollar Rent-a-Car. “There used to be a day where customers would get to the counter, and if someone had taken the vehicle they wanted, we would give them a free upgrade, and they loved that. But now with gas prices, if we run out of the small cars, and we try to offer people an upgrade to a larger car, they don’t want it.”

But making a quick change to Dollar's rental car fleet would be next to impossible, said Payne. Because it takes time to negotiate with car manufacturers to purchase vehicles, bringing in more fuel-efficient, economy-sized cars will take months. Dollar will also have to pay more for hybrid and economy cars because of increased demand nationwide. Because of this, consumers may now see some Dollar rental cars that are 12-to14-months old, as opposed to the normal nine months old. “We are trying to maximize the life of the smaller vehicles we do have while we acquire new ones,” Payne said.

That doesn’t mean that renters have sworn off gas-guzzling big cars and sport utility vehicles. Indeed, since a big chunk of car rentals occur at airports, big cars come in handy. Families vacationing with a group of four to five people with luggage couldn’t all fit into a compact car even if they wanted to. “Folks really want to rent this big car,” said Lisa Martini, spokeswoman for Enterprise Rent-a-Car. “It surprises us, because we thought everyone wanted a small car. But because we see this a lot at airports, it could be more that people are choosing it for luggage and passengers.”

But, renters do want more miles per gallon, and more customers are requesting hybrid vehicles. Enterprise now has 73,000 "flex" vehicles that burn ethanol as well as regular gas.

“We are changing our fleet to meet demands with hybrids and flex fuel vehicles,” Martini said. “As fuel efficiency becomes an issue, we have tried to have our fleet reflect those things.”  

Little wonder, since car renters often pay higher gas than most – as anyone who has ever returned a rental car with an less-than-full tank can attest. Rental-car companies can legally charge as much as 35% on top of the overall cost of gas for refueling. This fee has not changed because of rising gas prices, but consumers will pay more simply because the gas itself costs more. 

Other costs could go up, too. Dollar's overall rental prices have not increased this year, but airport traffic could drive them up, Payne said. Because much of Dollar’s business is tied to people moving through airports, when airline ticket prices go up, fewer people may fly. If less people fly, fewer customers may be coming to Dollar’s door. “This would mean we’d tighten our fleets and continue to maximize profit from the fleet that we do have,” Payne said. “If things get tight enough and demand is still high, then prices could increase.”

Some renters are trying to find alternatives. Zipcar, the pay-by-the-hour car- rental service based in major metropolitan areas like New York, Boston, D.C. and Seattle, has seen an increase in membership. “Nobody likes high gas prices, and we don’t either, but we have lots of new members joining Zipcar who are looking to cut the cost of gas,” according to spokesperson Kristina Kennedy.

Because Zipcar includes the cost of gas in its membership, drivers don’t have to worry about paying out-of-pocket for fuel. Zipcars come with a gas card tucked into the glove compartment that members can use to refuel before returning the car, an offer so appealing that 60% of new Zipcar members said they either sold or didn’t purchase a car because of their membership, according to a recent survey the company did of all members who joined after March 1.

According to that survey, 40% of new members said that “free” gas is the reason they joined. That's a big change from last year, when 14% of members said that gas was a consideration. Zipcar now sees 9,000 new members join every month, and has recently upped the number of cars available in New York, Boston, Chicago, and D.C. in expectation of the summer rush.

For its part, the company said it is handling higher gas prices, which account for only 10% of Zipcar’s operating budget, according to Kennedy. “Our cars only drive about 7 miles per hour the whole time they are out,” she said. “They are being used to go to Whole Foods, not to Iowa.” The biggest cost Zipcar shoulders is parking, which is going up in many major metropolitan cities, she said.

Zipcar does not expect to raise prices this year. “But if gas goes up to $10 a gallon, we’ll have to look into it,” Kennedy said.