Car rental prices increase 75 percent ahead of Thanksgiving

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

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, ABC News reported, citing estimates from the travel booking website Kayak. 

Jonathan Weinberg, the founder and CEO of Autoslash.com, said consumers are spending as much as $300 per day to rent a car in busy locales such as New York and the average price nationwide is about $100 a day, more than 50 percent higher than it was in 2019. 

“Things are pretty crazy at the moment and the reason is because we have a massive shortage of rental cars, there is a semiconductor shortage, basically computer chips are not available and with today’s modern cars, they require over 100 chips in each one,” Weinberg told The Post Tuesday. 

“I think there was a lot of apprehension with traveling last year and the rental car companies still had enough inventory to meet that demand and now it’s completely flipped on its head,” Weinberg said.

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

“They just sold off too many cars in the middle of 2020 when COVID was impacting their business and they thought they were going to buy back those cars when they needed them but it turns out things were not quite as simple as they thought,” he added. 

In Great Neck, Long Island, on Tuesday, Ed L., 29, couldn’t believe the cost he had to pay at an Enterprise Rent-A-Car for wheels to take him to the eastern shore of Maryland to spend Thanksgiving with family. 

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

“I did this same trip two years ago, it was $27 a day. I just got banged for $307.57 for two days?! For a smaller car. A midsize?!

“I’m in shock. I came today to pick it up and beat the rush but I had to cut a day off and I’ll start tomorrow morning. Last time I did this the gas and tolls cost more than the rental. I hope that’s not true this time!”

Compounding the issue is how many travelers will be on the road ahead of the Thanksgiving holiday. Projections from AAA show that as many as 90 percent of travelers are opting to drive instead of fly, compared to about 80 to 85 percent seen in years prior, which is only driving the price further up with the increased demand.

Rental car
AAA estimates that close to 90 percent of travelers are opting to drive instead of fly for the Thanksgiving holiday.
Matthew McDermott

Ivan Drury, the senior manager of insight at Edmunds, said the automotive industry has been in chaos since the COVID-19 pandemic and it’s leading to sticker shock at the car rental counter. 

“It really comes down to the fact that last year during the heat of the pandemic, the rental agencies weren’t moving units, no one was moving cars, they were holding on to these depreciating assets… they decided they were just going to have to sell these things,” he said. 

Around the same time, automakers were forced to shut down factories, and production came to a halt. They halted orders on the semiconductor chips needed to power everything from heated seats to navigation systems, but when the economy bounced back quicker than expected, they weren’t able to procure the crucial parts, Drury explained. 

The Covid-19 pandemic has sent the auto industry into disarray.
The COVID-19 pandemic has sent the auto industry into disarray.
REUTERS

“Right now new car dealers only have about 20 percent of the inventory that they are accustomed to having during a normal year so we’ve even seen that rental agencies [who] want to buy x amount of units, they can’t even get those delivered to them, some rental car agencies are even resorting to used cars.” 

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

Additional reporting by Kevin Sheehan

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