Yahoo Finance Here's Why It's So Hard (and Expensive) to Rent a Car Right Now—Plus Clever Ways to Snag One
TABLE OF CONTENTS
On This Page
What's Happening with Car Rentals?
Exactly How Pricey Are They?
What You Can Do About It
The Bottom Line
In May, the Centers for Disease Control and Prevention announced that vaccinated Americans can "resume activities that you did prior to the pandemic." For many, this means hitting the road and traveling to fun destinations by car. But before you start planning a highway getaway, a few things have changed since your last vacation. Namely, renting a car should be the very first thing you book before anything else because rental cars have become an extremely limited resource.
"We've seen a tremendous surge in car rental bookings and increased demand for getaways within driving distance on the app," says Adit Damodaran, an economist at Hopper, a travel recommendation website. "In Florida specifically, where Spring Breakers are traveling this month, many suppliers have had shortages of vehicles throughout the spring, and we've seen surges in prices."
High demand is only the beginning. Here's what to know about the car rental market and how you can still snag a deal in this hectic new landscape.
RELATED: 5 Awesome Regional Road Trips To Try This Summer
What's Happening with Car Rentals Right Now?
It's a classic case of supply and demand. "The 'Carpocalypse' is primarily happening in favorite tourist destinations like Hawaii and Orlando, Fla., where an influx of travelers is overwhelming the supply of available rental cars," says Scott Keyes, founder of Scott's Cheap Flights and the author of Take More Vacations. "The more outdoorsy and popular a destination, the more you can expect pricey rental cars."
Even without the major influx of travelers, car companies simply don't have the inventory to serve them. Over the course of the pandemic, as travel (and vehicle demand) dipped, many car companies chose to sell their unused vehicle inventory to try to offset the loss of business. The Seattle Times reported that major car rental companies sold more than 770,000 vehicles last year, meaning one of every three rental cars that were in service are now no longer available. "Last spring, with travel virtually zeroed out, car rental agencies were facing a crisis: Nobody was traveling. While airlines were bailed out by taxpayers (multiple times), rental agencies were not," Keyes explains. "Now, with travel surging, rental agencies are finding themselves with far fewer cars available to rent. To make matters worse, the current semiconductor chip shortage means it's taking longer for agencies to find new cars to replenish their fleets. That shortage means higher rental prices this summer."
Exactly How Pricey—or Hard to Come By—Are Rental Cars?
According to Damodaran, the average national car rental price in early May was $395, up from $371 just two weeks prior. And that's a good deal if you can find an elusive car at all. "Demand for cars is at an all-time high—in fact, car rental bookings on Hopper are up 498 percent since January," he adds.
But prices and availability, Keyes reminds, are also highly dependent on when and where you are. "If you need a rental car in Maui over Memorial Day weekend, the absolute cheapest car available right now on Expedia is $373 per day, a four-fold increase over pre-Carpocalypse rates," he says. "If you wait to make a reservation until just before your trip, car rates will likely go up even higher, if not sell out altogether."
RELATED: Renting a Car? Here's How to Avoid Paying Way More Than You Should
Don't Worry—There Are Still Lots Of Deals and Options Out There.
Despite the car shortage, there are still steps travelers can take to find a good deal. Both our experts agree that the best thing a person can do is shop around and book as early as possible to ensure they get a good deal (or a set of wheels at all). Here are some savvy options.
Leverage a Costco membership.
"While there's no single place to book flights that's always cheapest, from my experience, there is a place that's almost always cheapest for car rentals: Costco Travel," Keyes says. "You automatically have access if you're a Costco member, and it also includes extra perks like a free second driver. Best of all, reservations are free to cancel, so you can book a car today, and if the price drops tomorrow, just cancel and rebook for a cheaper rate." Keyes says he does this for just about every trip he takes, and you should, too.
Look to savvy rental sites.
Keyes also recommends looking at services like Autoslash, which monitors your car rental reservation and notifies you if the price drops. Other options include Turo, which is like the "Airbnb of car rentals," meaning you can rent local cars directly from owners or even try renting a car from a local dealership.
Consider car dealerships.
"Though not widely known, many car dealerships across the country have new cars they gladly rent out," Keyes says. "Even better, the prices tend to be set-rate, rather than the inflated rates at rental agencies."
Look to home improvement stores.
Ready to think outside the box? Try a local home improvement store. "Home Depot, Lowe's, and other home repair stores often have pickup trucks available for rent. These trucks tend to have set day rates, rather than inflated dynamic prices like at car rental agencies," Keyes explains. "Prices vary by location, starting at $89 per day."
Hit up ride share apps.
For those who aren't feeling quite that adventurous, there are always car share options like Uber and Lift. And, as Keyes notes, "If price is the main reason you preferred a car rental over ride share (rather than, say, infant car seats), it's worth using a site tool like Uber's price estimator to see which would be cheaper for your trip."
The Bottom Line
Book early and book quickly! You'll also likely have better luck choosing a more off-the-beaten path excursion for 2021. Save your Disney World adventure for another time (or at least another time of year).
