Rental car prices increase by 75 percent before Thanksgiving

Thanksgiving travelers can expect to pay as much as 75 percent more for car rental this week in the middle of a nationwide shortage of vehicles, sky-high gas prices and headaches in the supply chain.



The average cost per day for a rental car is about 66 percent higher than it was last year and 75 percent higher than 2019 prices, It was reported by ABC News, with reference to estimates from the travel booking website Kayak.

Jonathan Weinberg, founder and CEO of Autoslash.com, said that consumers spend as much as $ 300 a day renting a car in bustling locals like New York and that the average price across the country is about $ 100 a day, more than 50 percent higher than 2019.



“It’s pretty crazy at the moment and the reason is that we have a huge shortage of rental cars, there is a semiconductor shortage, in principle there are no computer chips and with today’s modern cars they require over 100 chips in each.” Weinberg told The Post Tuesday.

“I think there was a lot of concern about traveling last year and car rental companies still had enough inventory to meet that demand and now it has completely turned upside down,” Weinberg said.



Car rental
Prices are up 66 percent more than last year.
AP

“They just sold too many cars in mid-2020 when the covide affected their business and they thought they would buy those cars back when they needed them, but it turned out that things were not quite as simple as they thought,” he added.

In Great Neck, Long Island, on Tuesday, Ed L., 29, could not bear the cost he had to pay on an Enterprise Rent-A-Car for wheels to take him to Maryland’s east coast to spend Thanksgiving with the family.



“That was the most I’ve ever paid!” Ed scared when he showed The Post his receipt.

“I made the same trip two years ago, it was $ 27 a day. I just got $ 307.57 in two days ?! For a smaller car. A medium size ?!

“I’m in shock. I came today to pick it up and be in a hurry, but I had to cancel a day off and I’m starting tomorrow morning. Last time I did this, petrol and tolls cost more than the rent. I hope that’s not true this time! “

What exacerbates the issue is how many travelers will be on the road ahead of Thanksgiving weekend. Forecasts from AAA show that as many as 90 percent of travelers choose to drive instead of fly, compared with about 80 to 85 percent seen in previous years, which only drives the price further up with the increased demand.

Rental car
AAA estimates that nearly 90 percent of travelers choose to drive instead of flying during the Thanksgiving holiday.
Matthew McDermott

Ivan Drury, senior manager of insight at Edmunds, said the automotive industry has done just that been in chaos since the covid-19 pandemic and it leads to decal shock at the car rental counter.

“It’s really due to the fact that last year during the heat of the pandemic, the rental agencies did not move units, no one moved cars, they stuck to these depreciation assets … they decided they would just have to sell these things,” he said.

Around the same time, carmakers were forced to close factories and production stopped. They stopped orders for the semiconductor chips needed to power everything from heated seats to navigation systems, but when the economy recovered faster than expected, they could not get the crucial parts, Drury explained.

The Covid-19 pandemic has put the car industry in disarray.
The Covid-19 pandemic has put the car industry in disarray.
REUTERS

“Right now, new car dealers only have about 20 percent of the stock that they are used to having during a normal year, so we have even seen that rental agencies [who] want to buy x number of units, they can not even get them delivered to them, some car rental agencies even take used cars. ”

Drury said he expects it takes about a year to a year and a half for prices to level out.

Additional reporting by Kevin Sheehan

.

Author: admin

Leave a Reply

Your email address will not be published. Required fields are marked *