Car rental rates up to $500 a day because of shortage
Prices ‘skyrocketing’ as companies run out of vehicles for travelers
Ra Brave arrived Monday with his wife and son at the Orlando International Airport for a five-day stay. But after a year with most Americans avoiding long-distance travel, the real estate agent from Baltimore discovered a new challenge: getting around in the city.
“There are no cars available at all,” Brave said after being turned away at rental car desk after rental car desk at the airport. Agents at desks for Enterprise and National confirmed that every available vehicle they had that day was already reserved.
Battered by the COVID19 pandemic, rental car companies are facing a national car shortage, causing availability for travelers to plummet and daily rental rates to spike to as high as nearly $500 a day in Tampa.
“I think madhouse is probably a good way to describe it,” said Jonathan Weinberg, CEO of AutoSlash.com, a website that aggregates discounts for car rentals. “We are benefiting in some ways from the madness. The problem is that in many cases we just can’t find cars for people.”
As the pandemic got underway in March of last year, car rentals plummeted by 90%, according to Weinberg. Over the year, rentals gradually returned, but not before rental companies made the decision to sell off thousands of vehicles in order to stay afloat.
“They have a whole lot less cars than in 2019,” Weinberg said. “Even if the industry is back 80%, they have 30 to 40% less cars. The prices are just skyrocketing.”
Many rental car companies moved inventory to Florida and other tourist locations at the start of the year to attempt to serve returning travelers, but the move fell short in some places. Over holiday weekends in February, 18 out of 20 Florida airports were entirely out of cars, according to Weinberg.
The shortages can even vary by just a few miles. Weinberg said Orlando has fared better than some of the rest of the state, even though he points out rental prices are running $50 to $100 per day, more than double the average rates he saw in 2019.
But Weinberg pointed to the Tampa-St. Petersburg region as an “area of concern,” saying weekend rentals from Tampa’s
airport are going for as much as $489 per day.
Weinberg isn’t optimistic that this will get better in the short term.
“As you get into March and April, people start to head back north,” he said, meaning the cars will need to head north as well. “Eventually the demand is going to turn and it’s going to happen very quickly.”
Rental car companies are trying to rebuild their fleets, but buying new cars presents its own challenges. Several automobile factories shut down at the beginning of the pandemic, leaving car dealers and rental agencies competing for new cars off the line.
Then there is the global shortage of microchips. Production was hampered by the pandemic and further slammed this year when the ice storm in Texas shut down manufacturing and a fire in
Japan delayed production at another factory.
Such chips are essential components in new cars, thus further restricting new inventory. The lack of supply has reached such a crisis that the White House convened a summit to address the issue on Monday.
“I don’t think we’re going to see any relief coming on that end for a long time,” Weinberg said.
Rental agencies are compensating by hanging onto vehicles with higher mileage longer than they typically would, according to Weinberg. “Seeing a rental car with 40,000 miles used to be unheard of,” he said. “Now, you’ll see these cars with 70- and 80,000 miles on them.”
The lack of rental cars has turned into a boon for agencies such as Turo, an Airbnb-type service for cars that lets private owners rent out their own vehicles.
“Our hosts are telling us that their businesses are booming due to a surge in travel and sky-high rental car prices,” Turo CEO Andre Haddad wrote in a statement.
Brave eventually found a car at a location away from the airport, which he said he got for a reasonable price.
“It’d be more convenient if we could do everything right here,” he said.
Avoiding the crunch
As rental agencies try to cope with the shortage, here are some tips to avoid getting stuck when you get where you going:
■ Book your rental as far in advance as possible (but don’t pay for it right away). Don’t treat the car rental as an afterthought to the hotel and the plane ticket. See what a rental costs where you’re going before booking the trip and make sure they are available.
■ Avoid prepaid rates, as you can wind up getting locked into a price that’s more expensive than it would be later. Many rental car companies offer the ability to pay at the time of the rental, so maintain that flexibility in case you find a better deal closer to the date.
■ Be flexible with the dates you travel. As with airline tickets, some days are better than others for booking.
■ AAA, Costco and other memberships and some insurance companies offer rental discounts. Check your memberships to see what offers you can score, and see if they stack with other discounts.
■ Search around the airport, not just at it. You may need to travel to another location to pick up your car, but at least you aren’t stranded.
■ Where they are free, join rental car loyalty programs. “This is the smart move in normal times, but given the current unprecedented situation, it could mean the difference between getting a car or not, or at least not having to wait in an hourslong line,” Weinberg said.