Aug. 18 (Bloomberg) -- Hertz Global Holdings Inc. is testing photographic equipment that will scan its vehicles for dings and dents before and after a rental to boost damage payments and save time.

The company currently loses about $170 million in damage payments a year, Chairman and Chief Executive Officer Mark Frissora, 54, said in a telephone interview yesterday.

The photo system is part of a broader plan to use technology to increase efficiency and improve customer service, Frissora said. The equipment produces a high-resolution, digital photograph of the rental car, and will compare before and after pictures for differences, Frissora said. Hertz employees currently walk around the vehicle and mark any damage on a form, which the customer signs.

“There will be no discussion because the document would clearly show any incremental damage,” Frissora said. “This keeps customers from being placed in a confrontational position and saves time.”

The Park Ridge, New Jersey-based company’s customers would sign a waiver acknowledging the process and be billed for any damage, Frissora said. Hertz is testing the technology at a location at an airport in the northeastern U.S., he said.

The car-rental company also has “a couple” hundred million dollars for acquisitions and technology investments, he said. One target may be the producer of the photo equipment, he said, declining to identify the company.

Automoti, Eileo

Hertz bought Automoti Group Inc., a Web site where consumers can buy used cars, in July. It uses the company’s software for a program that allows customers to rent a vehicle for three days before buying it. Hertz purchased Paris-based Eileo SA, a maker of technology used in arranging hourly rentals, in April. The company has also increased the use of self-serve kiosks to rent and return vehicles, the CEO said.

The company’s technology investments “are worth it for the returns,” Betsy Snyder, a fixed-income analyst with Standard & Poor’s in New York, said in a telephone interview. “It’s the cost of doing business.”

Hertz may as much as triple purchases of companies which rent machines like front-end loaders and power-generation equipment, he said. That business represents about 20 percent of annual sales, he said. The company plans to buy about 15 of the companies per year, up from four or five currently, he said.

Hertz rose 16 cents, or 1.6 percent, to $10.26 at 4:02 p.m. in New York Stock Exchange composite trading. The shares have more than doubled this year.

To contact the reporters on this story: Carol Wolf in Washington at cwolf@bloomberg.net

Last Updated: August 18, 2009 16:06 EDT