Car Rentals Are Becoming More Expensive Than Airfare and Hotels

4.23.2021 | Business travelers, expense report auditors, and would-be road trippers take note: renting a car is becoming extremely expensive.

Car rental prices have risen to $700 per day in some markets, becoming more expensive than airfare and hotels. According to Yahoo Money, travelers are paying as much as 9,900% more for car rentals than they were last year.

Right now, the most affected locations are in the southern parts of the U.S., but that will soon change.

“The problems are predominantly in these leisure areas, but we expect the problem to migrate towards the Northeast, Midwest, and West as the weather gets warmer,” Jonathan Weinberg, AutoSlash’s founder and CEO, recently told Yahoo Finance Live. “We’re going to see the problem spread.”

Why?

It’s a matter of supply and demand. As COVID restrictions lift and vaccinations continue, more people are traveling. However, last spring – when no one was traveling – rental companies sold vehicles to offset lost revenue. The three largest rental car agencies sold at least 450,000 vehicles last year, according to The Drive.

Additionally, vehicle production is limited because the automobile industry is facing a computer chip shortage.

Our Advice

  • Plan travel as far ahead as possible
  • Book your rental car before booking your flight and hotel
  • Try extending your rental time as a week-long price can be lower than a weekend rate
    For example, you may rent a car for 7 days at a rate of $60 per day vs. $350 per day for a weekend trip
  • Try renting a car through a local dealership

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