There are a plethora of reasons rental companies can run out of cars. USUALLY, the person is upgraded at no charge, but, if there are no cars, there are simply no cars. We always tried to find a company to cover our reservations, but that wasn't always possible, so a customer might have to wait.
Reasons (the list is longer but, these are the ones that come to mind) for running out of cars:
Car returned with damage so must sit in the hold lot until it could get appraised.
Car returned with blood (yep, happened quite a few times) so had to sit in the hold lot to determine if it was animal/vegetable/mineral before we would allow our techs to touch it.
Cars NOT returned when they are supposed to be due to inclement weather.
Cars on the hold lot due to needing an oil change or something similar (I must admit, I would pull these cars and rent them, even if it meant putting off the oil change a week or so).
Car not returned but towed in due to someone smoking in it with a leaky propane tank (yep, I'm not kidding)
And my most favorite of non rentable returns was the one that came back with bullet holes in the side and the guy who rented it threw quite a few grand on the counter and said if that didn't cover the damage, just call him and he would take care of it; just don't call the police.
Those are just a few of the reasons car rental companies can't always count on cars being returned on time (I'm sure I have a ton more, but, those were my most favorite/memorable)
