Prices to rent a car in the U.S. hit record highs at the end of 2021, and it doesn’t look like 2022 will provide a lot of relief.
After a big selloff of rental car fleets in 2020, the rental agencies have been slow to increase the size of their fleets because new-car production dramatically slowed down in 2021.
Here's one number to note: According to travel website Kayak, the average daily rental price in December 2019 was $46. In December 2021, it was $81.
The specter of rising prices won't take a vacation. Prices for rental cars have been high for long stretches of the pandemic—we last wrote about the trend in October—but the new year doesn't seem like it will bring any immediate relief.
The problem lies in the fact there just aren't as many rental cars available these days, caused in part by a large selloff of rental cars in the early part of 2020 as the pandemic started. That selloff hasn't been replaced by new vehicles entering the rental fleets. According to Auto Rental News, a trade publication that tracks the industry, the U.S. car rental industry added just over 725,000 new vehicles to their fleets in 2021, a 9 percent drop compared to 2020. But compared to the times before the pandemic, it's a more major drop, around 58 percent.
The industry added almost 1,739,000 vehicles in 2019. By tracking car rental company sales by month, Auto Rental News was able to see that the pandemic had an impact, of course, but the real damage to availability of rental cars in the U.S. was caused by the semiconductor chip shortage. That's not a surprise, but the numbers might be. In a normal year, ARN said, rental companies would buy around 800,000 cars in the fourth quarter. In 2021, though, they bought just 94,000 units. ARN is not saying then things might get back to normal, but it is expecting rental fleet sales to "stay depressed through most of 2022."
"Car rental rates closed at record levels at the end of 2021, and I would expect more of the same for 2022," Chris Brown, ARN's executive editor, told Pittsburgh-based WPXI. “The automakers are frankly favoring retail sales over rental fleet sales at this time, so car rental companies are hunting for deals just like consumers are, and they're paying closer to what consumers pay.”
We noted last year that some customers tried unusual rental strategies to get around in the places they were visiting, like renting U-Haul trucks while vacationing in Hawaii.WPXI reported that frustrated air travelers in Pittsburgh have even tried calling limousine services, trying to get a ride. The Wall Street Journal got numbers from Kayak that showed that the average daily rental rate in December was around $46 a day before the pandemic. In December 2021, it was $81, with many popular winter holiday locations reaching above $100 for the just past holiday season. But those prices aren't slowing down demand.
"The Americas booking patterns for the fourth quarter and holiday seasons appear robust and are currently outpacing 2019 levels," Avis CEO Joseph Ferraro said on that company's third-quarter earnings call in November, the WSJ said.
So, what to do? Other than folding a car to fit into your checked luggage, the only ideas we have are the expected ones: Book as early as possible, but also check regularly as your travel approaches to see if there might be any sort of deals available. Making multiple reservations with different companies (ones that offer free cancellation up to a specific point before the rental) might also be beneficial, since supply is fickle and if one company cancels on you, you have the backup. Ditching the nationwide rental car search engines in favor of directly contacting local rental agencies is another idea from WPXI. Finally, try to think of any discounts—military affiliation, AARP membership—that might apply.
You Might Also Like