Good Luck Getting Rental Cars This Summer

Matt Posky
by Matt Posky

As you might have noticed, or heard from us, rental agencies have been hoovering up new and used vehicles to offset the 2020 selloff that stemmed from everyone mysteriously canceling their travel plans that year. Returning to normal, which is something anyone who didn’t assume the world was ending could have predicted, has resulted in increased pricing for vehicles — regardless of whether you’re renting or buying.

Rental companies typically try to play the vehicle market like the rest of use stocks or (if you’re hip) crypto. Buy low, sell high. But 2021 has created a perfect storm of increased demand coming after a long stretch of nothing and an auto industry that doesn’t seem to be capable of building cars thanks to all sorts of component shortages. But it’s no sweat for the big rental agencies because they’re now able to charge just about whatever they want. They’re keeping vehicles in their fleets longer, making more money off them, and selling them back at elevated prices.

Your author frequently relies on rental cars to avoid putting additional miles on his security blanket/gas guzzler and it worked a treat when firms were charging double-digit prices for a car that was ultimately going to see another 800 extra miles placed on the odometer in a 24-hour period. But the current reality is a glut of high-millage cars in less-than-ideal condition that may not even be on the lot when you arrive at the rental desk.

What can be done? Well, reserving a vehicle well in advance of your trip is never a bad idea. But shopping around will likely be more helpful. You might find certain agencies with terms that work for milling around town but become prohibitively expensive if you plan on taking them out of state. Depending on where you’re going, the inverse might be true. We recommend comparing all the big-name firms and then considering something like ZipCar or peer-to-peer car-sharing apps like Turo or GetAround at your final destination. Some drivers in areas where rental vehicles are in short supply have even found themselves avoiding plump fees by just renting smaller trucks from U-Haul. Just be sure to keep the number of miles you’ll be covering in the front of your mind so you can do the math.

Renting away from airports can also save you money, as they typically yield lower rates. You’re likewise more likely to have a vehicle waiting for you if you’re part of a loyalty program or book something that’s a little nicer than the Manager’s Special. They’re typically more willing to cut you a sweeter deal if something goes wrong, too.

But there’s little that can be done about the core issues that are creating the problem.

According to Cox Automotive, via Automotive News, the typical mileage for rental risk units was 82,800 miles in April. That represents a 62 percent increase from the same time in 2020. Meanwhile, the average price for agency-owned vehicles sold at auction was up 32 percent in April compared with the same time a year earlier and up 7 percent from the previous month. This trend is all but guaranteed to continue throughout the summer.

Hertz, which almost died last year, is currently reporting its inventory is below 300,000. That’s down 42 compared to 2019, with most other agencies noting similar (though usually smaller) sizing disparities between their pre and post-pandemic fleets. Don’t forget, demand for rental vehicles dropped by around 90 percent in the first month of the pandemic, and those same companies were worried they might not survive to enjoy 2021.

When will things begin to stabilize? Probably when demand drops and it becomes less lucrative for agencies to keep hoarding cars and renting at such high prices. But that doesn’t just mean when the vacationing months are over. Rental groups want to recoup last year’s losses and the automotive industry will also need to figure out its supply chain issues to help match the rising demand.

[Image: IJzendoorn/Shutterstock]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Pau65792686 I think there is a need for more sedans. Some people would rather drive a car over SUV’s or CUV’s. If Honda and Toyota can do it why not American brands. We need more affordable sedans.
  • Tassos Obsolete relic is NOT a used car.It might have attracted some buyers in ITS DAY, 1985, 40 years ago, but NOT today, unless you are a damned fool.
  • Stan Reither Jr. Part throttle efficiency was mentioned earlier in a postThis type of reciprocating engine opens the door to achieve(slightly) variable stroke which would provide variable mechanical compression ratio adjustments for high vacuum (light load) or boost(power) conditions IMO
  • Joe65688619 Keep in mind some of these suppliers are not just supplying parts, but assembled components (easy example is transmissions). But there are far more, and the more they are electronically connected and integrated with rest of the platform the more complex to design, engineer, and manufacture. Most contract manufacturers don't make a lot of money in the design and engineering space because their customers to that. Commodity components can be sourced anywhere, but there are only a handful of contract manufacturers (usually diversified companies that build all kinds of stuff for other brands) can engineer and build the more complex components, especially with electronics. Every single new car I've purchased in the last few years has had some sort of electronic component issue: Infinti (battery drain caused by software bug and poorly grounded wires), Acura (radio hiss, pops, burps, dash and infotainment screens occasionally throw errors and the ignition must be killed to reboot them, voice nav, whether using the car's system or CarPlay can't seem to make up its mind as to which speakers to use and how loud, even using the same app on the same trip - I almost jumped in my seat once), GMC drivetrain EMF causing a whine in the speakers that even when "off" that phased with engine RPM), Nissan (didn't have issues until 120K miles, but occassionally blew fuses for interior components - likely not a manufacturing defect other than a short developed somewhere, but on a high-mileage car that was mechanically sound was too expensive to fix (a lot of trial and error and tracing connections = labor costs). What I suspect will happen is that only the largest commodity suppliers that can really leverage their supply chain will remain, and for the more complex components (think bumper assemblies or the electronics for them supporting all kinds of sensors) will likley consolidate to a handful of manufacturers who may eventually specialize in what they produce. This is part of the reason why seemingly minor crashes cost so much - an auto brand does nst have the parts on hand to replace an integrated sensor , nor the expertice as they never built them, but bought them). And their suppliers, in attempt to cut costs, build them in way that is cheap to manufacture (not necessarily poorly bulit) but difficult to replace without swapping entire assemblies or units).I've love to see an article on repair costs and how those are impacting insurance rates. You almost need gap insurance now because of how quickly cars depreciate yet remain expensive to fix (orders more to originally build, in some cases). No way I would buy a CyberTruck - don't want one, but if I did, this would stop me. And it's not just EVs.
  • Joe65688619 I agree there should be more sedans, but recognize the trend. There's still a market for performance oriented-drivers. IMHO a low budget sedan will always be outsold by a low budget SUV. But a sports sedan, or a well executed mid-level sedan (the Accord and Camry) work. Smaller market for large sedans except I think for an older population. What I'm hoping to see is some consolidation across brands - the TLX for example is not selling well, but if it was offered only in the up-level configurations it would not be competing with it's Honda sibling. I know that makes the market smaller and niche, but that was the original purpose of the "luxury" brands - badge-engineering an existing platform at a relatively lower cost than a different car and sell it with a higher margin for buyers willing and able to pay for them. Also creates some "brand cachet." But smart buyers know that simple badging and slightly better interiors are usually not worth the cost. Put the innovative tech in the higher-end brands first, differentiate they drivetrain so it's "better" (the RDX sells well for Acura, same motor and tranmission, added turbo which makes a notable difference compared to the CRV). The sedan in many Western European countries is the "family car" as opposed to micro and compact crossovers (which still sell big, but can usually seat no more than a compact sedan).
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