Why rental car prices are through the roof–if you can find one

FROM ISLAND HOPPING FOR A UHAUL IN HONOLULU TO GAMBLING ON BOOKING A RENTAL CAR IN VEGAS.  

TRAVELERS ACROSS THE COUNTRY ARE EXPERIENCING WHAT SOME ARE CALLING ‘THE CAR RENTAL APOCALYPSE.’ 

WHY IS THERE A RENTAL CAR SHORTAGE? LET’S GET THIS STRAIGHT. 

WHILE IT’S NOT THE END OF THE WORLD IF YOU CAN’T BOOK A RENTAL VEHICLE, IT CAN CERTAINLY THROW A WRENCH INTO YOUR SUMMER TRAVEL PLANS.  

CALEB SILVER: You’re seeing people get very creative when it comes to getting their rental cars. 

CALEB SILVER IS THE EDITOR IN CHIEF AT INVESTOPEDIA AND HAS BEEN FOLLOWING THE RENTAL CAR MARKET’S PRE-AND-POST PANDEMIC RIDE.  

CALEB: The average daily cost to rent a car in the United States right now is around $64 per day, which’s about 50% more than a year ago. And in some places, it’s up 100% more than it was a year ago in certain parts of the United States.

SILVER SAYS THERE ARE THREE FACTORS BEHIND THE SHORTAGE:  

ONE, DEMAND IS HIGH AND INVENTORY IS LOW.  

LAST YEAR, THE THREE LARGEST RENTAL CAR COMPANIES, HERTZ, AVIS BUDGET GROUP, AND ENTERPRISE HOLDINGS ALL SOLD OFF MUCH OF THEIR FLEET.  

IT WAS A WAY TO GENERATE REVENUE WHEN MANY PEOPLE STOPPED RENTING VEHICLES DURING THE PANDEMIC. HERTZ WOULD LATER FILE FOR BANKRUPTCY.  

TWO, A GLOBAL SHORTAGE OF SEMICONDUCTORS. 

SILVER: There is a shortage of production. So, automakers blame that on the fact that they can’t get enough semiconductors and microchip components to build their cars.

SO, WITH THE SHORTAGE, FEWER CARS ARE BEING MADE, WHICH MEANS LESS INVENTORY OF NEW VEHICLES, AND THEREFORE A HIGHER COST TO PURCHASE NEW AND USED VEHICLES.

SILVER SAYS THIS IS WHY THERE ARE FEWER CARS ON DEALERSHIP LOTS ACROSS THE COUNTRY. 

THREE, AN INCREASE OF AMERICANS OPTING TO TRAVEL BY CAR OVER PLANE. 

SILVER: I think flying is going to take a while to get some traction in terms of folks being comfortable with it. So, we’re going to see a lot of driving this summer. We got high gas prices, we got high rental car prices, we’re going to see it cost a lot for Americans to enjoy their summer vacations on the highways of America.

SO, WHAT DOES THIS MEAN FOR YOU?  SILVER SAYS BE INTENTIONAL ABOUT PLANNING A SUMMER VACAY THIS YEAR. 

AND, IF YOU CAN, THINK OF ALTERNATIVES TO TRAVELING BY CAR AND BE WARY OF FRAUD.

IN 2020 ALONE, THE FEDERAL TRADE COMMISSION SAYS AMERICANS LOST MORE THAN 74-MILLION DOLLARS ON TRAVEL-RELATED SCAMS.  

LET ME KNOW HOW YOU PLAN TO TRAVEL ON SOCIAL MEDIA AND IN THE COMMENTS BELOW.