Why Are Rental Cars SO Expensive Right Now?
The car rental industry right now is going crazy and I explain why. I also provide some tips and resources to help find the lowest costs.
Happy June everyone! I can't believe summer is right around the corner!! The temperatures are showing it here, and I am not complaining! :D Have you tired to rent a car in the past few months? We are facing renting one right now, and boy it is INSANE how high the prices of cars are right now. I was like how could this be? Is it because people are traveling again and the demand is so high? Were the car companies not prepared for this rise of demand? I answer these questions below! :)
Reasons Why Prices Are So High Right Now
The Global Pandemic - According to IBISWorld, revenue for the industry decreased by 36.1% in 2020. Many car companies had to figure out ways to stay above water during COVID. The demand for cars was way down, and they had to do what they could, so companies sold off a lot of their cars for the money. Why keep brand new cars sitting on your lots right? Companies like Hertz, also had to file bankruptcy during this time because they were struggling so badly. An iconic company like Hertz doing this, shows how much the industry was really struggling.
Demand on the Rise - With people getting vaccinated, people are starting to fly more and rent cars more. With the struggling companies, they haven't been able to keep up with the demand. When we were in Phoenix, it was really interesting, when we got to the car lot to get our car, the person said that we could pick any of these 5 that were there. They were wet like they just got a car wash, and looked brand new. We got in and there was only 11 miles on the car!! This is an example that car companies are beginning to purchase more cars again to keep up with the demand!
This diagram below shows that the supply is going down for rental cars, while the demand is going up causing the rise in prices (P1 = before COVID, P2 = 2021). I know... I am a nerd.
Tips For Renting A Car Right Now
1. Book As Soon As Possible! - Our trip has been pretty last minute, so we didn't not book our rental car far enough in advance.. Another reason this is so important is that rental cars could be sold out all together. That would be such a disappointment if you can't find a car for your trip!
2. Ask Yourself If You Really Need A Car - For our upcoming trip, we asked ourselves this to make sure we really needed it. We checked the local transportation to see if it is sufficient and we could just get by on that, or if it would be more cost effective to just take a few Ubers while we were there. These are really good questions to ask yourself to see if getting a rental car is really worth it.
3. Check Prices Before You Book Flights - If you are planning a vacation, it may be beneficial to you to check the rental car prices there before you book everything else. If the rental car is too much, you don't want to have a flight already booked and not know what to do. This will help if you should book your vacation for another week, where the prices may be cheaper!
4. Try Other Forms of Car Rentals - Car sharing is a concept that is on the rise right now. We do it with houses on Airbnb, why not do it with cars, right? The major platform for this is Turo. I talked a little bit about this company in a prior article, and may be a good option for a rental car on your next trip. We booked a car through Turo on our recent trip to Arizona, and what was nice about it was, we decided we wanted to go to the Grand Canyon, so the next day we booked a car and returned it the next night!
5. Find Different Websites To Compare Prices - This is another thing we did for our upcoming trip. It was really important for us booking so last minute to see if there was ANY WAY we could find a cheaper car. Here are some really great websites we did to compare prices
AutoSlash - This is a highly used website in the travel world. People seem to find really great deals on here and become life long users of this website!
Expedia - This website has always been by go-to for checking and comparing prices. I really like the user interface and feel it is really easy to use.
Kayak - This website is one that Vince uses. It is a lot like Expedia, but was able to help us find even better deals for our upcoming trip!
Costco - My mom actually brought this one up to me, and the prices are really great on their website. You do have to have a Costco membership to be able to rent a car through them!
It doesn't sound like the car rental industry is slowing down anytime soon, so be prepared to pay more for a rental car for the foreseeable future. I think the number one thing to take out of this is that you should make sure you book your rental car as soon as possible. Also, don't let it stress you out! A trip should be fun and you always need to remember that :)