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Car rental prices skyrocket ahead of Thanksgiving amid supply chain issues

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Thanksgiving vacationers can anticipate to pay as a lot as 75 p.c extra for automotive leases this week amid a nationwide scarcity of autos, sky excessive gasoline prices and supply chain complications. 

The common value per day for a rental automotive is about 66 p.c greater than it was final 12 months and 75 p.c greater than 2019 prices, ABC News reported, citing estimates from the journey reserving web site Kayak. 

Jonathan Weinberg, the founder and CEO of Autoslash.com, stated shoppers are spending as a lot as $300 per day to lease a automotive in busy locales similar to New York and the typical worth nationwide is about $100 a day, greater than 50 p.c greater 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 instructed 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 stated.

Car rental
Prices are up 66 p.c greater than final 12 months.
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 imagine the price he needed to pay at an Enterprise Rent-A-Car for wheels to take him to the japanese shore of Maryland to spend Thanksgiving with household. 

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

“I did this similar journey two years in the past, it was $27 a day. I simply acquired banged for $307.57 for 2 days?! For a smaller automotive. 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 problem is what number of vacationers will likely be on the street ahead of the Thanksgiving vacation. Projections from AAA present that as many as 90 p.c of vacationers are opting to drive as a substitute of fly, in comparison with about 80 to 85 p.c seen in years prior, which is barely driving the value additional up with the elevated demand.

Rental car
AAA estimates that near 90 p.c of vacationers are opting to drive as a substitute of fly for the Thanksgiving vacation.
Matthew McDermott

Ivan Drury, the senior supervisor of perception at Edmunds, stated the automotive trade has been in chaos for the reason that COVID-19 pandemic and it’s resulting in sticker shock on the automotive 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 stated. 

Around the identical time, automakers have been pressured to close down factories, and manufacturing got here to a halt. They halted orders on the semiconductor chips wanted to energy every thing from heated seats to navigation techniques, however when the economic system bounced again faster than anticipated, they weren’t in a position to procure the essential elements, Drury defined. 

The Covid-19 pandemic has sent the auto industry into disarray.
The COVID-19 pandemic has despatched the auto trade 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 stated he expects it’ll take a few 12 months to a 12 months and a half for prices to degree out.

Additional reporting by Kevin Sheehan

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