Last Updated on January 31, 2022 by Jonathan
Bad news, travelers. As Americans begin planning their 2022 getaways, many are blissfully oblivious to the car rental apocalypse that has cast a shadow over the travel landscape for the past year. Folks may think they can simply go back to the vacation game plan they relied upon before the pandemic – lock down their flights first, reserve a hotel soon afterward and book a rental car whenever they finally get around to it.
But doing things the old way won’t work anymore. Through the early months of the pandemic, car rentals were dirt cheap. We’re talking $5 per day in Hawaii cheap. But, alas, those days are long gone.
Car Rental Prices are Still Sky High
A few alarming statistics can illuminate the issue in a snap. Car rental rates in December 2021 were up 50% compared to December 2020 and up 60% compared to December 2019. In short, car rental prices are significantly higher now than they were pre-pandemic and also compared to the first year of the pandemic.
We were seeing sky high peak rates last summer, but the general expectation was that summer of 2022 would be better. So far, that is not the case. Consider where car rental prices are for a July 2022 booking.
- The average price for a one-week rental in Hawaii if you were to book today is around $800 before tax (about $113 per day). That is twice as high as we’ve ever seen when booking six months out.
- The average price for a one-week July rental in Anchorage, Alaska is over $1,600, or $231 per day. Again, that’s pre-tax.
- Rates at Glacier Park Airport (FCA), another hotspot from last summer, are running around $1,380 per week, or $197 per day, in July.
- In New York City, car rental rates for July are running around $90 per day
- In a sampling of a dozen major airports around the country, rates for July hover around $60-$70 per day.
Car Rental Supply Remains Low
The U.S. is still experiencing a major rental car shortage, so waiting until the last minute to lock down a vehicle means (a) paying through the nose; (b) being priced out of the market; or (c) not even having the option to overpay because every car will be sold out.
Why is there a rental car shortage when so many Americans are still avoiding travel? While demand for car rental is still down from pre-pandemic levels, more and more people are renting cars as they get vaccinated. Americans also have loads of vacation time squirreled away. But demand is only half of this car rental apocalypse.
What is happening on the supply side of the equation is truly scary. In the early days of the Covid-19 pandemic, rental car companies sold off large portions of their vehicle fleets in an attempt to “right-size” for rock-bottom demand. They sold off as many vehicles as they could, as quickly as they could.
Even then, the rental companies still struggled mightily. The pandemic forced Hertz into bankruptcy. Soon Advantage and E-Z soon followed into Chapter 11. Europcar, the new parent company of Fox, underwent major financial restructuring to survive. The net effect was fewer rental car companies with bare-bones fleets. For most of 2020, that wasn’t a problem. Demand was down and the rental companies did not envision a quick recovery on the horizon.
How to Land the Lowest Price
This year, like last year, the cost of your rental car may end up being the most expensive component of your trip – and that’s if you are able to snag one at all. The problem is going to be especially acute for travelers who want or need larger vehicles like minivans, full-size passenger vans and full-size SUVs. These tend to sell out most quickly and may already be gone even when booking weeks ahead of time.
How to escape the car rental apocalypse? To avoid overpaying for a rental car and ensure that you snag a vehicle, you will need to book a car rental as far ahead as possible. Folks who book their flight and hotel but figure they’ll worry about their car rental last will do so at their peril.