Car rental prices in the United States could double by August due to national shortage
It’s going to be a scorching summer for car rental prices, The Post has learned.
The average daily cost of renting a car in the United States hit a record high of $ 63.75 last month – up 50% in some cases – as the country’s economy comes to life, data collected shows by Jefferies, a New York investment bank.
What’s more, demand is getting so high – with charges for August already over $ 100 a day – that many vacationers can expect to pay more than double what they would have before the pandemic, according to data on summer reservations.
“You can see consumers using public transportation,” Jefferies analyst Hamzah Mazari predicted.
COPPER CRUNCH DRIVES RECORD AWARDS
The Wall Street analyst has collected daily car rental prices from all the major rental companies – Avis, Hertz and Enterprise – since 2015. During that time, he said, he did never seen rental costs in the United States go as high as they do today. .
The median price of an Avis car rental jumped to $ 68.07 in May, a 50% increase from the median cost Avis charged its May renters between 2015 and 2019, before the pandemic no knocks, according to the data.
Avis prices for June and July, meanwhile, jumped to $ 81.59 and $ 94.51 per day, respectively. For the month of August, the median is $ 103.40 per day, a staggering 104% increase from this month’s pre-pandemic levels.
The data is similar in other major car rental companies, with the median daily price at Hertz standing at $ 114.49 for the month of August, 147% above pre-pandemic prices. Enterprise, meanwhile, charges an average of $ 100.85 per day for a car in August, 57% more than its traditional late-summer rates.
The skyrocketing prices come as the demand for rental cars exceeds supply. Desperate to survive the pandemic lockdowns that interrupted world travel last year, many rental companies have sold their fleets for cash. Now, with newly vaccinated Americans ready to travel again, car rental services have struggled to replenish their fleets.
Supply chain problems due in part to a shortage of microchips have driven up prices for new cars, and car rental companies – who typically buy their cars from manufacturers at wholesale and discount – have been pushed to the bottom of the line amid spotty availability, industry sources say.
The shortage of new cars has also pushed up the cost of used cars and trucks – up 29.7% in the past 12 months through May, the Labor Department reported last week.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Earlier this month in Park Slope, Brooklyn, Aaron Epstein said his wife looked at rental prices at a Hertz store and thought they were expensive. But when she booked a car a few days later, the price had doubled. They ended up paying $ 176, excluding tax, to rent the car for a day’s drive to upstate New York.
“If it was just me, I would take the train or the bus,” he told The Post.
“It’s really expensive for the weekend,” agreed Callan Ideau, who paid about $ 300 to rent a car for the weekend to get to a friend’s bachelorette party. in New Jersey. She said she had hoped the total would be closer to $ 200, but there were no more cars to consider. The Hertz branch manager said they were full for the weekend.
Mazari says prices are unlikely to fall until next year, as new car production is not expected to normalize until the fourth quarter. “When that is sorted out is when car rental companies start adding cars to their fleets,” Mazari said.
The only way car rental companies could be forced to lower prices sooner, he said, is if consumers have had enough and ditch car rentals for taxis or public transport. common. To some extent, this is already happening.
CLICK HERE TO LEARN MORE ABOUT FOX BUSINESS
Brooklyn resident Gordon Price said he flew to Puerto Rico for a week’s vacation last month and ended up using Uber to get around the island because rental prices of cars were extremely high.
“I’m used to driving a nice rental when I travel. Sometimes even a good upgrade,” he told The Post.
“I was appalled that every rental company was completely car free. I finally found a KIA Sorento for $ 400. Not like I usually drive, but I finally read the part that explained it was per day.”
“I was not amused,” he said. “I wasn’t paying him either.”
To learn more about the New York Post, Click here.