Driving You Crazy: Why do so many Colorado rental cars have out of state license plates?

Driving You Crazy: Why do so many Colorado rental cars have out of state license plates?

Karen from Denver writes, “What’s driving you crazy? Why do so many Colorado rental cars have Florida plates?  Do they pay any Colorado taxes and fees?  You can tell they are rentals by the tag on a window near the driver and the cars are too clean to have driven to Colorado from Florida.”

More often than not Karen, when I am traveling out of Colorado the rental car I drive will have an out of state plate. In fact, during a recent trip to Chicago, my rental car had a plate from Louisiana. I was surprised to see several cars with Colorado plates in the same rental lot.

The main reason rental car companies have a bunch of out of state cars in or out of Colorado is due to people renting a vehicle in one city and dropping it off somewhere else.

“The easiest explanation for out of state license plates is one-way rentals,” says Danielle Stuart, Director of Corporate Communications for Enterprise Holdings. Better known by their brands Enterprise, National and Alamo.

Stuart tells me business and personal rental customers will rent a vehicle for a one-way trip and then fly home. She says one-way rentals have been a very popular option the past few years during the height of the pandemic as families would use the rental vehicle for a road trip and then choose to fly home. “Once a vehicle is taken out of state, it is cost prohibitive to have it shipped back and therefore we will continue to rent the vehicles as its current location,” said Stuart.

She tells me about 40% of available rentals with Enterprise Holdings in Colorado are equipped with out of state plates and a similar number, about 40%, of vehicles with Colorado plates on them are being rented in some other state. When I went to investigate this issue at several rental car locations in downtown Denver, I saw about half of the cars in lots for Hertz, Avis and Budget had Colorado plates.

I reached out multiple times to several major rental car companies in Colorado about this story. Avis-Budget never returned my emails. Fox Rent-A-Car told me, “We are not in a position to answer your questions at the present time.” I also reached out to Hertz who refused comment saying, “We won’t have anything to contribute”.

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Another relocation technique rental companies use is having employees or contractors shuttle or transport one or more cars at a time from a cold weather spot to a warm weather state where the rental companies are short on cars. Sometimes these drivers after delivery will be shuttled to another city to drive some other car to another cold spot or just fly home.

This is often the case during certain season of the year like during the winter months when there are more people wanting to vacation and rent a car in Arizona or Florida than Minnesota or North Dakota.

“Our team will work to try to reallocate our fleet to meet seasonal demand as much as possible and will accomplish this by hauling vehicles to the markets with higher demand,” Stuart says. “Also, when a natural disaster strikes, Enterprise shifts resources to meet demand for local ground transportation in affected areas.”

Sometimes car rental companies will offer customers incentives and discounts on one-way rentals right after Labor Day and into the fall going from a northern state to southern states for just this reason.

Regarding your specific question whether rental companies pay any Colorado vehicle registration taxes and fees. Even though it makes reasonable sense to you and me that a company registering vehicles in specific states will cost them much less in registration fees, Enterprise Holdings tells me they will always register the vehicle in the state of first use or delivery. “We do not consider the registration cost,” Stuart tells me.

However, speculation online suggests some rental companies register many of their cars in low fee states like Texas and avoid registration in higher tax and fee states like Colorado.

For example, according to the Texas Department of Motor Vehicles, the cost to register a passenger vehicle under 6000 pounds is a flat fee of $50.75. In Colorado the method to calculate the cost of vehicle registration centers on the taxable value of the vehicle. A base model 2021 Toyota Corolla that has a taxable value of $17,850 would have an estimated registration cost of $367.75. That’s a big difference from Texas, especially if a company is registering several hundred vehicles.

If you are concerned about safety, Stuart tells me if you feel safer having a rental car with an instate plate, their local customer service team will work to accommodate that request.

By the way, after driving from Colorado to Florida and back in an RV for Superbowl 33 Karen, I can vouch that you can still have a clean vehicle when you get to Colorado after such a long trip.

Denver7 traffic anchor Jayson Luber says he has been covering Denver-metro traffic since Ben-Hur was driving a chariot. (We believe the actual number is over 25 years.) He’s obsessed with letting viewers know what’s happening on their drive and the best way to avoid the problems that spring up. Follow him on Facebook, Twitter or Instagram or listen to his Driving You Crazy podcast on iTunes , Stitcher , Google Play or Podbean.

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