Holidaymakers are facing sky-high car rental prices this Easter as rental companies struggle to keep up with renewed demand.
The average Easter rate for those who have booked so far in March 2022 is £280 per week, up 135% from the pre-pandemic rate of £119 (March 2019). And prices should continue to rise.
Some customers have already paid even higher prices, depending on demand in their area. Who? saw extraordinary Easter booking prices including:
- £600/week for a Fiat Panda in Mallorca
- £734/week for a Skoda Octavia in Rome
- £764/week for a Ford Escape in Florida
The high prices are the result of an acute shortage of new cars. When Covid hit, car rental companies sold vehicles to survive. But they have been unable to restock their fleets due to the continued shortage of semiconductors that has caused automakers to slow or even halt production of new vehicles.
It’s so bad that at peak times in 2022, it’s likely that some places won’t have cars for rent at all. Suppliers reported running out of cars in some places for the February midterm earlier this year.
It’s not too late to get a good price. Read our guide to
Where have car rental prices increased the most?
Prices were already considerably higher last year than before the pandemic. According to figures from Which? Recommended Provider (WRP), , in 2019, only one in 20 car rental customers paid more than £500 for their car rental. But in 2021, more than a quarter of rentals cost £500 or more.
It is very difficult to estimate how much rental rates could increase in 2022, but prices in October 2021 give us an indication. The combination of the October mid-term and the short window of opportunity to travel between the removal of the traffic light system (October 4) and the arrival of omicron (November 24) caused a surge in bookings holidays and car rental demand.
Average prices have more than doubled from their pre-pandemic rate. However, there were stark differences across Europe, with bookings in Portugal nearly tripling their 2019 rate – see table below.
Table notes:Average rental rates for popular European destinations with booking/pickup in October 2021 across all car classes, provided by Zestcarrental.com
How much could car rental prices increase in 2022?
With the easing of travel restrictions, demand for rental cars from British holidaymakers could be even higher this summer.
It is the last minute bookings, in high season, who can expect to pay the highest prices. Who? saw stunning examples of prices paid by latecomers (those who booked and traveled in August 2021).
The highest weekly rate was £968 for a VW Polo in Iceland. While car hire in Iceland is relatively expensive, in 2019 the weekly average was only around £300.
Another outlier was the £949 paid for a 10-day rental of an Opel (Vauxhall) Corsa in Zadar. In 2019, the average cost of a 10-day rental in Croatia was under €250.
Why is car rental so expensive today?
The combination of Covid and global car manufacturing shortages has created a perfect storm in the car rental industry.
The pandemic has caused a complete collapse in demand for rental cars as overseas travel has come to a standstill. Rental companies have now missed nearly two years of trading at a normal level and need to recoup some of their losses.
Many have kept their heads above water by selling vehicles, helping to manage costs and generate cash. Some fleets have been reduced by up to 30% of normal levels.
But as demand slowly returned, rental car companies had limited financial reserves to replenish. And when they were able to order new vehicles, they faced wait times from manufacturers of up to a year due to plant closures and shortages of raw materials.
The problem is compounded by the fact that automakers prioritize individual consumers over rental car companies that tend to order vehicles in bulk at deep discounts.
, a Which one? Recommended supplier, told us ‘A key challenge at the moment is the global supply chain challenges, the most notable being the chip shortage which is having a significant impact on the availability of new cars.
Our relationships with our manufacturing partners remain strong and our fleet acquisition team is working hard to secure additional vehicles to meet demand.
Some companies even resorted to buying used cars, but due to global shortages they had to pay “new” prices. And because they have not been able to renew their fleets (normally cars are only kept for two years), car rental companies have found themselves struggling with older fleets that are much more expensive to maintain.
When will car rental prices drop?
None of these problems should go away overnight. Auto industry figures predict that the semiconductor crisis that is disrupting global auto production will continue well into 2022, and even into 2023.
Right now car rental fleets are small and businesses cannot grow. But even when the manufacturing bottleneck ends, it will take time for rental car companies to rebuild their fleets and recoup the losses of the past two years.
With nearly two years of pent-up travel demand, if this summer sees significantly fewer restrictions, providers are likely to struggle to keep up with rental car demand.
How can I save money on car rental in 2022?
Be sure to book with a UK, in the USA, in the Canary Islands, and for reservations worldwide. Some suppliers will take advantage of this unusual market to raise prices to exorbitant levels. But which one? examines both providers and brokers, not only on customer experience, but also on their pricing transparency and how they have fared during the pandemic.to like
For more money-saving tips, read our guide:.