We are now a good two to three years from the lockdowns of COVID, and the craziness it caused. Back then, businesses did anything to survive, and in most cases, caused prices for most services to skyrocket. Car rentals were not immune to that, with the 2021 prices surging up 48%.
Currently, car prices are 78.5% higher in the year 2023 than in the year 1997. Travel Expert Catherine Banks says all of this resulted from the pressure to survive during those aforementioned, infamous lockdowns.
"In order to stay afloat, car rental companies sold off inventory...and have not been able to replace cars at the pre-COVID levels," she says. "That is because of a semiconductor shortage, those little chips that run everything our fancy cars...it is slowing down how quickly manufacturers can output cars."
In modern day, about 40% of cars rely mostly on those chips, and wait times for those sailed into the six-month range, or even higher. It all combined together for a perfect storm.
"You pair all of that with a massive surge of post-COVID travel, which is still going on...you get these prices," she says.
During, and even after COVID, there was such a great hike in prices, that some even began renting small U-Haul vans to get around town.
Now, in our advancing technological world, there are apps such as 'Turo' which allow you to rent other people's cars, similar to AirBNB. You pick what you want, rent it as is, and pay the owner. However, those come with their own set of risks.
"If it breaks down, you will not have the support of a budget rental car companies with a town truck, or a car to replace it," she says. "So, if the car breaks down...that owner just has the one car. You have to figure out what you do from there."
Currently, the average daily price to rent a car is around $81 per day, which of course depends on type of car, and what city you are visiting. There are places to get deals, such as Charlotte, North Carolina, where the average to rent for a full week is below $500, the only major city with prices that low.
In Houston, the average sits around $100, of course depending on where you rent. Will the prices ever come back down? There are some signs it has dropped a little, down 8% this year. But, there is still some way to go.
"I do think it will eventually unwind...I believe in capitalism, and once the supply is back up, I think the price will come back down," Banks says.
She says market forces will also help drive the prices back down, otherwise these companies do not have reason to lower their prices.
Photo: Getty Images North America