Why are Rental Car Prices So High this Year?

Filed under: Car Rental Victoria - 29 Mar 2010  | Spread the word !

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People everywhere are continuing to travel, despite the state of the economy. On a global level it is only getting worse and in places like Greece the strain can be seen in the form of people lashing out against their government. However, the economy has made most aspects of travel much more attainable than they were five or six years ago. One example is in the price of hotels and flights. While still somewhat expensive, the costs have come down to a point where it is now cheaper to fly rather than drive and when booking a hotel it is easier to get the room you want for the price you want.

Unfortunately, not all aspects of travel have decreased in price. In fact, a major jump in prices can be seen in the rental car sector. The reason for this is simple supply and demand. While airliners can’t necessarily just sell off their planes and hotels can’t cut the tops off their buildings, rental car companies have been able to sell a large portion of their cars. Many rental car companies have cut their fleets down by at least 15% in the last two years allowing them to adjust their fees accordingly.

This decrease in the overall supply of rental cars has sent prices skyrocketing. In many cases it has jumped by nearly 100%, forcing people to search for the best deals possible for their plans. What this entails is searching far and wide for the best coupon codes for website booking, searching out discounts for booking all aspects of your travel at once and even calling up the rental car companies and haggling over their prices. Thankfully, if these simple tasks are done it is still possible to secure a reasonable price on your rental car.

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Why Have Car Rental Prices Doubled or Tripled in the Last Two Months?

Filed under: Car Rental Victoria - 09 Mar 2010  | Spread the word !

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A rental car is like any other commodity. The price goes up when demand is high and the price goes down when demand is low.

But the equation isn’t always that simple. Over the past 18 months, the rental car companies have artificially reduced the supply of cars available for rent by selling 400,000 of their cars into the used car market.

In fact, TV financial pundit, Jim Cramer, lauded Hertz for its spectacular earnings report last October precisely because Hertz made more money selling cars then renting them.

With low air fares, more people are traveling and renting cars, so the increased demand on a reduced supply caused prices to rise – by a lot.

In May 2008, it cost, on average, $199.65 to rent a compact car. A year later, the average was $346 – a 73% increase.

There are ways to avoid these rate increases:

1) Search for mom-and-pop rental car companies that rent cars for less because they don’t have costly marketing efforts.

2) Consider renting a car from one of the 85% of Toyota dealerships that rent cars.

3) Avoid picking up a rental car at the airport, where rates are usually highest.

Unfortunately, none of these strategies work in Victoria, B.C. Independent rental car companies are hard to find, and their rates are not much lower than the name-brands. Toyota dealerships only rent cars in the United States.

There is no difference between the Avis rate at the airport and their Victoria office. National Car Rental charges $9 more to pick up a compact Suzuki Swift from its Traveller’s Inn office in midtown Victoria than from the airport.

Fortunately, Victoria has among the lowest rental car rates in all of Canada.

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