The price for rental cars have doubled due to a national car shortage triggered by the COVID-19 pandemic.
The shortage has come after rental car companies were forced to sell off vehicles to stay afloat during the pandemic as they try to boost their fleets once more.
Reservations are already being made for August by some vacationers, with fees greater than $100 already popping up.
The New York Post reports that in May, the average daily cost to rent a car in the country was $63.75, according to data from Jefferies, a New York investment bank.
‘You may see consumers resort to mass transit,’ said Hamzah Mazari, an analyst with Jefferies.
This graph shows the rise in median costs at Avis this year, as well as the rise in costs this coming August at other companies like Hertz and Enterprise
Avis hits a peak with a median cost of $103.40 a day for a rental car in August, a 104 percent increase from pre-pandemic levels in August
The daily median price at Hertz in August is $114.49, a 147 percent increase from pre-pandemic August levels
Many rental companies are seeing an increased demand for cars over the summer, but don’t have the supply to meet the demand, driving the increasing prices.
Rental costs across major companies such as Hertz, Avis and Enterprise are at their highest since 2015.
At Avis, the median price of a rental car in May 2021 was $68.07. That was up 50 percent from the median cost the same month at Avis from 2015 to 2019.
For June, the median cost rises to $81.59, soaring even higher to $94.51 in July.
The company then hits a peak with a median cost of $103.40 a day for a rental car in August, a 104 percent increase from pre-pandemic levels in August.
A similar trend is being felt at Hertz and Enterprise. While median rates for the next few months were not publicly disclosed, both companies are seeing massive costs in August.
The daily median price at Hertz in August is $114.49, a 147 percent increase from pre-pandemic August levels.
Meanwhile, the daily median price at Enterprise for the coming August is $100.85, a 57 percent increase over the typical summer rate.
Rental companies decided to sell some vehicles during the pandemic when rentals crashed along with the travel industry.
Now, they need more vehicles to match the surging demand for the coming summer.
Aaron Epstein and his wife were looking at renting a car from Hertz in Brooklyn, only to see the price double over the course of a few days.
They ended up paying $176 to rent a car for a single day, with that cost coming before applicable taxes.
‘If it was just me, I would take the train or the bus,’ Epstein said to The Post.
Callan Ideau paid around $300 for a weekend rental from Hertz, forced to settle for the high-priced vehicle after being told by a branch manager that they were sold out for the weekend.
‘It’s really expensive for the weekend,’ Ideau said.
Gordon Price, a resident of Brooklyn, chose to Uber around Puerto Rico last month instead of incurring the high rental costs.
‘I was dismayed to find every rental agency was completely without cars,’ Price said. ‘I finally found a KIA Sorento for $400. Not how I usually roll, but anyway I finally read the part that explained it was per day. I was not amused … I also wasn’t paying it.’
People wait in line to rent vehicles at Miami International Airport Friday, May 28, 2021, in Miami. The shortage of rental vehicles will cause long delays and higher prices this summer
Industry sources told the New York Post that rental companies are not getting priority in purchasing cars from manufacturers, which they typically do in bulk and at a discounted rate.
Part of the problem is a microchip shortage, which is causing supply chain problems across the car manufacturing industry.
Used cars and trucks are seeing a similar rise in cost to rental cars for similar reasons, up 29.7 percent over the last year through May, according to the Labor Department.
Car production isn’t expected to normalize until the fourth quarter of 2021, meaning the high rental prices are likely to continue into 2022 unless consumers shift to public transport en masse.
‘When this will get fixed is when car rental companies start adding cars back to their fleets,’ Mazari stated.
The summer travel season started several weeks ago when tens of millions of Americans hit the highways and took to the skies ahead of Memorial Day Weekend.
Almost 40 million citizens were expected to travel far-and-wide for this year’s annual holiday, which marked the country’s unofficial start of summer.
With COVID rules relaxing and infection rates plunging, optimistic Americans are finally ready to venture out after being cooped up at home.
Many took road trips to the party hubs, and up to 34 million Americans were expected to hit the road over Memorial Day Weekend, which rompted the price of gas to surge to $3.03 a gallon – its highest price in seven years.
More than 37 million people were expected to travel 50 plus miles, a 60 percent increase over last year when stay-at-home orders forced people to stay home.
At least 2.5 million Americans were also set to take to the skies, with TSA boss Alejandro Mayorkas warning of airport lines for the first time since the COVID-19 outbreak stopped many Americans flying last year.