RIYADH, 28 April 2004 — A computerized data bank containing personal details of the customers blacklisted by rent-a-car companies has been set up by the chambers of commerce and industry. The move is primarily intended to disallow, and in some cases detain the defaulters, when they approach again a rental company or a dealer in the Kingdom to hire or purchase another vehicle.

These companies are becoming increasingly cautious in terms of renting out vehicles to suspicious clients in the wake of terrorist attacks which rocked the capital and other Saudi cities in recent months.

“Car rental companies lost SR80 million cumulatively in default payments last year,” said Al-Zain Awad El-Karim, credit and collection manager of Arabian Hala Company, one of the five key players in the car rental industry in Saudi Arabia.

El-Karim said Arabian Hala’s dues alone in the market exceeds SR16 million. He said the trend of non-payment by individuals and companies for a prolonged period of time has been rising in the Kingdom.

The computerized data bank set up by the chambers of commerce is helping officials, dealers and car rental companies in monitoring information about blacklisted customers, said El-Karim. But the database, although currently in place, needs to be further upgraded, said representatives of other rent-a-car companies.

Car rental companies, they said, are the worst sufferers at the hands of defaulters. Automobile dealers, on the other hand, are also facing problems of non-payment after selling their vehicles on installment basis or lease-to-own, said Sami Ahmed Akbar, sales & marketing general manager at Wallan Est., dealers of Hyundai vehicles.

Akbar said less than two percent of customers eventually become defaulters, and cases are only reported to the police after all avenues of payment or repossession have been exhausted.

Industry sources said the chambers have been entrusted with the responsibility to supply information about such customers to car rental companies. “The method is working well in tracing those customers, who disappear after abandoning the hired vehicles in remote locations,” said Zuhair Adel, another industry expert. There are more than 250 car rental companies, including the five major ones, in the Kingdom.

With citizens and expatriates taking extra caution in the wake of the recent terrorist attacks and weapons hauls, industry sources report a sharp drop in business, compared to previous years.

But not all companies subscribe to this view. Some say business is normal, while others claim that it is, in fact, “picking up”.

A spokesman for Abu Diyab car rental company said “besides the drop in the car rental business, the leasing business segment had also taken a beating in the current climate of spending cuts”.

The trend was noticeable at other car rental firms in the capital with a large number of unrented vehicles parked outside their premises. Another prevailing trend was the wide disparity in the hiring charges. Korean cars start from as low as SR60 per day in some firms, while others are charging SR110 for the same brand and model. The upper end ranges from SR600 to SR2,500 for a Mercedes.

This flexibility is attributed to the deregulation of rental rates by the Ministry of Transport in line with its policy of encouraging competition. Asked about measures to check payment defaults, the sources said many companies now rent out vehicles only to customers holding credit cards. This policy, however, has been criticized by a section of customers, who are denied car hires despite having cash in their wallets.

Sohail Khan, a customer at a rental company’s outlet yesterday, said he had been denied the service because he could not provide a credit card guarantee.

Some companies still rent out small cars on a cash basis, but they refuse to provide luxury cars without guarantee.