Rental Car Rates May Increase Due to Lack of Inventory
Summer is upon us and travel bans have lifted, which means that more Americans will need to rent cars. However, rental car rates may increase yet again and even worse, travelers may not even be able to rent a new car. As you can guess, the lack of inventory is to blame.
Car manufacturers are still facing chip shortages
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Rental car prices plummeted during the pandemic but increased in 2021 when the travel ban started to lighten up. During that time, the ongoing global shortage made it hard for rental car companies to remain stocked with cars, so they raised prices. Now, the rental fleets are still starved for new car inventory, so prices may go up again this summer.
According to The Drive, “manufacturers are still facing chip shortages and manufacturing delays, and in some cases aren’t able to get cars to paying customers, so they aren’t interested in low-profit rental fleet sales.” Before the pandemic, rental fleets made up for around 7-12% of the manufacturer’s total sales. But now, they account for around 4-7%, says Europecar, a French rental company. This means that rental companies are keeping their older inventory around and even purchasing used cars to pad their fleets.
Used cars in rental fleets may sound weird, but they’re good for profits
While using slightly older cars in rental fleets might sound kind of weird to travelers, it makes sense to the rental companies. The Drive reports that rental companies are able to maintain higher profit margins using older cars and when it comes time to sell them, they’re able to sell them at a higher rate – thanks to the inflated car market. Also, the lack of new cars for rental companies to buy means that they can keep their fleets smaller and more manageable.
Tips for saving money when renting a car this summer
If you plan on renting a car this summer and want to save some money, then here are a few tips according to NerdWallet:
- Skip the airport: Instead of renting a car at the airport rental counter, compare those prices to other rental car locations in the city. When renting at the airport, you’ll be charged extra surcharges for the added convenience of the location.
- Shop online: Check out sites like Kayak, Priceline, and cheapcarrental.com for rental rates from multiple companies. Then check the actual rental car’s website to compare the pricing and find the cheaper rate.
- Check out discount brands: While rental companies like Enterprise, Hertz, and Budget are very popular, they can also be the most expensive. Check out brands like Advantage and Dollar, which typically end up being cheaper.
- Use your own insurance: The rental counter attendants are very good at selling you car insurance when you rent a car. But if your personal car insurance has rental coverage, then you can use that instead and save up to $30 a day on your rental.
Another tip is that you can also book a rental car at the last minute to save some money. It may seem counterintuitive, but it works. If you plan on traveling this summer and need a rental car, then every dollar saved counts.