First, it was a global microchip shortage reducing supplies of some new cars.
Next came increasing used car prices as dealers found supply harder to come by.
Now, there’s a shortage of rental cars. The cost to rent a simple economy car is running three to five times normal in some areas. Some travelers are also finding it impossible to book a car in some popular destinations.
USA Today explains, “The coronavirus pandemic devastated the travel industry, and car rental companies responded by shedding cars in their fleets.”
Now that Americans are beginning to travel again, rental car companies are running into two problems in restocking their fleets. First, they’re short of cash after a year in which Americans stopped traveling. Second, the inexpensive sedans they buy are the same cars automakers have cut back on during the semiconductor shortage. Instead, manufacturers are reallocating their chip supplies to keep churning out higher-margin trucks and SUVs.
In an August 2020 report, IHS Markit Principal Automotive Analyst Stephanie Brinley explained, “as production resumed, automakers in some cases shifted planned production from rental-car fleet vehicles to vehicles configured for retail.”
No Relief in Sight
Rental car companies say the problem may have no short-term solution. “We anticipate this continuing throughout the coming months, especially in pockets of the country popular with travelers,” Enterprise spokeswoman Lisa Martini told The Washington Post.
The company is “leveraging our large network of neighborhood and airport locations to move vehicles where possible to support regional spikes in demand,” Martini said. But that solution brings its own problems. It is complex and expensive to move cars to island vacation destinations, for instance.
What can travelers do? Jonathan Weinberg, founder and CEO of car rental site AutoSlash, told the Post that travelers should “make speculative bookings” since most rental companies don’t charge for canceling a reservation.
A service like Turo, a car-sharing company that lets owners rent out private vehicles, might also be an option.
