One of the things people have been looking forward to on the other side of the pandemic is traveling. After more than a year of lockdowns, binging on streaming services, baking various types of bread and learning all of the hit dances on TikTok, many of us are yearning for more than a walk around the block. We want to hop on a plane and go anywhere that’s not shaped like a couch. If that involves renting a car once you land, we have bad news. According to the Wall Street Journal, even if you can find one, it’s probably going to cost a lot.
Remember how last spring, as air travel shut down completely and unused rental cars piled up in parking lots, stadiums, fields and elsewhere, companies started offloading those vehicles on the used car market? Well, demand is now picking back up, and suddenly there are at least half a million fewer rental cars in America than there were in 2019. A number of factors are making it difficult for rental companies to restock their fleets, leading to long wait times and high prices on the customer end.
Rental cars stored in the parking lot of Dodger Stadium in Los Angeles in May 2020.
The three biggest rental car agencies in the country are Hertz (despite its ongoing bankruptcy proceedings), Avis Budget Group and Enterprise. Hertz and Avis Budget sold off at least 450,000 vehicles last year in an attempt to offset billions in pandemic-related losses. It didn't hurt that used car prices spiked at the same time. "They were dumping cars into an historically high used-car market, and it saved them," industry analyst and president of Abrams Consulting Group Neil Abrams told the paper.
The move might've saved them, but it also set the stage for the current shortages. WSJ reports skyrocketing rates, empty lots and long wait times are spreading around a number of major airports. The story quotes a man named Parks Shackelford had to cancel his flight to Jacksonville, Florida to go on a hunting trip in southern Georgia because he couldn’t find a rental car anywhere close to where he was going to land. He ended up eating the cost of that nonrefundable flight and booking another one to a city in Georgia that had a rental car in stock.
Some travelers show up to rental lots and have to wait around for cars to be returned. Even if they wait an hour or more, they may end up leaving with a completely different type of vehicle than the one they reserved. And the prices: Can I interest you in a Ford Focus for $300 a day in your upcoming I'm vaccinated! Vegas weekend?
Unfortunately, two key factors are getting in the way of meeting the demand. One is the ongoing chip shortage in the automotive industry, which continues to take a toll on factory output. There just aren't enough cars to stock up. The other is that rental agencies are still seeing increased demand from people opting to rent a car instead of using a rideshare service over health concerns, plus those who are still renting cars for road trips in lieu of flying.
And it’s probably going to be a while until you can walk up and pick out a $39/day compact for your weekend getaway. Though the three major rental companies declined to comment to the Journal, they all confirmed that the shortages aren't going to be resolved anytime soon.
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