CALL FOR EVIDENCE

FOR AN INITIATIVE (without an impact assessment)

This document aims to inform the public and stakeholders about the Commission’s work, so they can provide feedback and participate effectively in consultation activities.

We ask these groups to provide views on the Commission’s understanding of the problem and possible solutions, and to give us any relevant information they may have.

Title of the initiative

Taking car rentals into other EU countries – rules

Lead DG – responsible unit

DG MOVE C 1 – Road Transport

Likely Type of initiative

legislative

Indicative Timing

Q1 2025

Additional Information

-

This document is for information purposes only. It does not prejudge the final decision of the Commission on whether this initiative will be pursued or on its final content. All elements of the initiative described by this document, including its timing, are subject to change.

A. Political context, problem definition and subsidiarity check

Political context

Rules on the registration of motor vehicles fall under national competence. Overall, registration is a simple administrative formality in most Member States. However, national requirements regarding the use of rented cars for cross-border journeys make it more difficult for EU citizens to afford and efficiently use mobility services provided by car rental companies. In addition, some requirements regarding the registration, hire and return of rental cars may lead to operational inefficiencies. The 2020 Sustainable and Smart Mobility Strategy contains an action (No 60) to 'propose measures to encourage cross-border car rentals’.

Problem the initiative aims to tackle

Under current car registration rules, rental cars returned in a different country than the one in which they are registered and rented may need to be immediately re-registered in the country of use, or immediately brought back to the country of origin (by truck, by rail or with the help of a specific driver) except in the rare cases when a customer can be found immediately in the country of destination for a return trip. Car rental companies can therefore de facto be prevented from temporarily moving parts of their fleets between countries to manage fluctuations in demand. These different re-registration procedures in Member States yield extra costs and bureaucratic delays for car rental companies, which are then transferred to the consumers of rental cars. 

Basis for EU action (legal basis and subsidiarity check)

Legal basis

As diverging national rules on the use of rented vehicles on the territory of other Member States impact the free movement of rented cars and the freedom to provide cross-border services within the EU, the EU has the right to act in accordance with Article 114 TFEU.

Practical need for EU action

As there is no EU legislation on cross-border car rental, this initiative should improve the functioning of the internal market by reducing obstacles to cross-border car rental services through the establishment of minimum requirements regarding the registration, rent and use of rented cars across borders. This can only be done at EU level, since it concerns cross-border car rental between different Member States.

B. What does the initiative aim to achieve and how

The general objective of this initiative is to contribute to the functioning of the single market by ensuring fair, efficient and sustainable mobility across borders through facilitating the cross-border use of car rentals. In this context, the specific objectives of this initiative are:

·to achieve an affordable and efficient use of cross-border car rental services by customers;

·to achieve more efficient use of car fleets by car rental companies, which may translate into lower prices for customers in the presence of efficient competition;

·to offer customers alternatives to the use of their own individual cars in cross-border situations.

In order to address this matter, the Commission is considering minimum requirements regarding the registration, rent and use of rented cars across borders, in particular by introducing a certain time window in which car rental companies may rent out a vehicle in a different Member State from the one in which the car is registered, without re-registering it according to the specific national laws of the country of use.

Likely impacts

In terms of socio-economic impacts, the initiative will likely lead to a reduction of the operating costs and expenses for car rental companies. This could in turn impact the costs and availability of cross-border rental cars, including through the impact on competition between car-rental operators.

The initiative could also impact tax revenues of Member States directly or indirectly linked to the use of cross-border car rentals, whether from registration taxes, circulation taxes or value-added tax.

Future monitoring

The Commission will regularly monitor the effects of the initiative once it has had sufficient time to be implemented and enforced throughout the EU.

C. Better regulation

Impact assessment

This initiative is very limited in scope and there is only one main policy option being considered to address the problems indicated above, namely the establishment of a certain time window in which car rental companies are allowed to rent out vehicles in other EU Member States without being obliged to re-register them according to national rules. Therefore, an in-depth assessment and comparison of the effects of different policy options, as in an impact assessment, is not possible. An analytical document will be prepared instead, to provide the best available relevant evidence supporting this intervention.

Consultation strategy

The consultation process will consist of two main parts: · A 12-week public consultation in all official EU languages, via the Commission’s central public consultations page (‘Have your say’). A factual summary report will be published on the consultation page after this public consultation is closed. · Various targeted consultation activities (including surveys, interviews and workshops) of the stakeholders most affected, which will be caried out under an external support study taking place throughout 2024.

The results of all consultation activities will be summarised in a synopsis report which will be attached to the analytical document. 

Why we are consulting?

The Commission aims to collect stakeholder views and data with a view to assessing the feasibility and impacts of the initiative.

Target audience

The main stakeholders identified include car rental companies, trade unions, national transport and fiscal authorities, consumer organisations, notably those targeting car users, and EU citizens.