Rental Car Woes: Sky-High Prices if Cars Are Even Available
Last updated April 14, 2021
After a year of dealing with the pandemic, Jerry Darby and his wife, Arlene, were looking forward to going to Hawaii in mid-April. Using their Alaska Airlines companion ticket, the Darby’s total roundtrip airfare from Seattle to Honolulu was only $600. Then, they found out how much a rental car on Oahu was going to cost.
“The price was just unbelievable, $1,700 for three weeks,” Jerry told Checkbook. “That’s just crazy! So, we decided to bag the trip and go another time.”
On March 29 (peak spring break season) the cheapest rate for a rental car on Maui was $722 a day for a Toyota Camry, according to Hawaii News Now. In Honolulu that day, vans were going for as much as $500 a day, and convertibles were renting for $1,000 or more, the website reported.
And it’s not just Hawaii.
Rental car prices are sky-high at many vacation destinations across the country, including Orlando, Tampa, Phoenix, Las Vegas, and Puerto Rico, according to Jonathan Weinberg, CEO of AutoSlash, a website that searches for rental car prices. During spring break, 18 of the 20 commercial airports in Florida were “sold out,” Weinberg said. Glacier Park Airport in Kalispell, Montana, is “virtually sold out” for July and August.
“Prices are through the roof, and that’s if you can get a rental car at all,” Weinberg told Checkbook. “Rental rates in general range from double to 10 times more this year than last, depending on the location and how far in advance you book.”
“I’ve been in the business 11 years, and I’ve never seen entire airports—or entire states, in some cases—sell out, expect for holiday periods like Thanksgiving and Christmas week,” Weinberg said.
What’s Driving This?
Travel experts and industry insiders told Checkbook the price hikes and sell-out situations are the result of two major factors: An unprecedented lack of inventory and significantly higher-than-expected demand, resulting from pent-up travelers, stimulus check payments and the willingness to fly after being vaccinated.
“Demand is coming back so quickly that it's difficult for rental car companies to ramp up. You can't pull new cars out of thin air,” said Peter Gruening, vice president of Costco Travel. “Car companies generally re-fleet every year, but when their business turned down last year, they were hesitant to do that. By the time the business started coming back, there was a shortage of new cars from the manufacturers.”
A global shortage of microchips has forced numerous auto manufacturers to slow production for some models or temporarily close factories. And remember, rental car fleets were already depleted going into the current travel surge.
To deal with the staggering losses caused by the pandemic, the industry sold more than a half-million cars, about a third of its combined fleet, according to CNN. And while rental car companies are buying new vehicles, they’re being careful not to over-extend themselves, industry analysts noted.
Right now, the imbalance of supply and demand on rental car lots is most prevalent at warm-weather vacation destinations. But as the weather warms and more people get vaccinated, the problem is expected to start migrating to other places.
“I think the problem is going to be everywhere at once this summer, and the rental car companies are going to have a difficult time balancing out their vehicle fleet,” Weinberg told Checkbook.
Don’t Dawdle
Most people who plan to travel book their airfare first and then look for a hotel. Reserving a rental car is usually an afterthought. That’s not going to work this year. The longer you wait, the higher the price—if you can even find the type of vehicle you want to rent.
Charlie Leocha, president and co-founder of consumer group Travelers United, has been watching rental car prices for his upcoming trip to Florida. Unfortunately, he waited too long.
“If I had rented a week ago, I could have gotten a car for $158 for five days, and I would have been thrilled,” Leocha said. “Now I can’t find anything for less than $358. It’s really difficult right now to find any good deals.”
How to Find the Best Price
Search. Use a few comparison websites, and grab the best deal you can. Check airport, off-airport, and downtown locations. You never know which will have the best prices on the type of vehicle you want. “Book something that you can cancel without penalty, or that doesn’t require you to provide a credit card number. That way you’re not out any money if your plans change,” said Ed Perkins, a syndicated travel writer. “Right now, I wouldn’t try to save money by paying in advance unless it’s a last-minute trip; it’s just too risky.”
Keep searching. Set up price alerts, if possible, when you book. Or continue to do more searches on your own. In this volatile market, things can change very quickly.
Be flexible. Can you travel on different dates? It could make a difference. Moving your arrival from a weekend to a weekday might save you money at some leisure destinations. When Checkbook searched for an economy car at Tucson Airport from Sat., May 15 through Wed., May 19, the cheapest daily rate was $240. Slide the reservation down a few days, Mon., May 17 through Fri., May 21, and the daily rate drops to $186. Total savings: $220.
Use discounts. Are you an AARP, AAA, or USAA member? Do you belong to an airline or rental car company loyalty program? Are you in the military? See if there’s a discount you can use. Many credit cards offer discounts. Costco, Sam’s Club, and BJ’s have special pricing for their members. AutoSlash will do all that work for you, automatically applying coupons, checking for promotions and special deals.
There may be another option: Going without a rental car. Maybe you can take taxis, or use Uber or Lyft to get around. You might consider a car-sharing service such as Zipcar, Getaround, or Turo.
My wife and I are planning a trip to Hawaii for two weeks later this year. The cheapest rental car I can find is $1,120. Yikes!
We don’t drive very much when we’re on the island, so we’re seriously thinking of bagging the rental, and using the condo’s free shuttle bus that goes everywhere we want to go. Taking a ride-share car from the airport to the condo is about $80 each way. The $900 we’d save on the rental car would more than pay for most of our meals.
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Contributing editor Herb Weisbaum (“The ConsumerMan”) is an Emmy award-winning broadcaster and one of America's top consumer experts. He is also the consumer reporter for KOMO radio in Seattle. You can also find him on Facebook, Twitter, and at ConsumerMan.com.