Here’s Why Renting a Car Is a Pain Right Now

• The chip shortage and other supplier difficulties continue to constrain automaker output and rental fleet numbers, with rental car companies struggling to add cars to their fleets as travel rebounds.

• Rental car companies had sold off hundreds of thousands of vehicles early in the pandemic to stay afloat but now face the issue of not having enough cars or staff to meet demand.

• The rental car shortage is expected to persist through the end of this year, as automakers struggle to increase output in the needed segments.

If prices for gasoline and airline tickets aren't keeping you from traveling this summer, the rental car shortage may accomplish that.

Early on in the pandemic, during the spring of 2020, rental car agencies all moved to reduce their fleets by significant numbers, selling hundreds of thousands of rental cars and closing locations in order to stave off insolvency. One major rental car company actually came close to bankruptcy but was able to right the ship in the summer of 2021 with their remaining inventories managing to mostly meet the demand from travelers. It helped the companies that the demand during the summer of 2021 was not at pre-pandemic levels, owing to continuing issues like the delta variant surge during late summer and fall, as well as airline travel remaining depressed.

Now we are seeing the pendulum swing back in the other direction, with travelers hitting the road this summer after largely staying put for two and a half years.

The problem is there aren't enough rental cars at the moment because automakers are still constrained by the chip shortage and other supplier issues that sent new car prices at dealerships through the roof earlier this year. In addition, some rental companies are still suffering staff shortages after closing some locations early in the pandemic.

While there are some signs the supply of new vehicles at dealerships is improving, at least in some segments, this has done very little to swell rental car fleets. At first blush this might seem like a problem for rental car companies, but in reality it's far more of a problem for those seeking to rent the cars, as companies are simply pricing daily rentals in accordance with demand. And we all know what that means.

With airline ticket prices and rental car prices, it's becoming cheaper for some summer holiday travelers to just skip both entirely and drive to their destinations in their own cars, braving high gas prices instead.