Rental car prices surge to record-high prices

As more people get vaccinated, summer travel plans are becoming an exciting reality. But before you book your trip, travel experts say be prepared to have your rental car cost more than your plane ticket.

That's due to a nationwide rental car shortage that we’re seeing here locally.

"Our phone just stopped ringing for months," says Jason Hollenbeck.

Hollenbeck is the manager for Aero Rent A Car. Hollenebck says COVID had a devastating effect on his family’s car rental company.

To stay afloat, they did what most rental companies did both big and small: "We got rid of a lot of our inventory knowing that we don't have any incoming reservations."

Hollenbeck says they sold about 60% of their fleet. He says some rental companies did even more than that.

So while things are finally looking up the industry with travel picking up, "it’s kind of this in-between period where companies need to be able to replenish their inventory to fulfill the demand."

"We have huge demand, restricted supply, and its doing exactly what economics do, it is jacking up the rental car rates significantly, 300 times what you might expect," says travel expert Steve Danishek.

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Danishek says if you wanted to rent a car tomorrow for one day, it would cost you $579 in Miami; in Orlando it would be $732. In Austin, Dallas and Houston there are just no rental cars available.

When we checked it ourselves using Expedia, the lowest price you could get for a midsize car for a one-day rental- tomorrow in Honolulu would set you back $200. Fort Lauderdale was $445.

Danishek says renting last-minute and for only a day is typically going to give you higher prices. But he says the prices they're seeing today are just unheard of.

"There are situations where the car companies cannot even meet the number of reservations that have been confirmed by the rental companies," says Danishek.

So why don’t companies up their inventory? Well, it’s complicated. 

"The car manufacturers are having trouble manufacturing the cars due to the chip shortages from Taiwan and elsewhere, so they can’t bring cars back into the fleet right away. This is a problem that’s going to take several months to solve."

And the cars that are available to buy are very expensive.

"Everyone knows the rental car companies need cars," says Hollenbeck.

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Because rental companies have to purchase cars for higher prices they are renting for higher prices. Hollenbeck says his family’s business’s prices haven’t gone up more than 20%. That's low compared to bigger companies where travel agents say you can see an increase of 50 to 100%.

"People will book the airfare, they’ll book the hotel, and then, as an afterthought they’ll book the car because cars are relatively cheap, they should not-they should look at all three elements."

Danishek says a good tip is look at prices at rent a car companies that aren’t located at the airport. Airport locations may be more expensive.

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