Americans looking to rent a car or truck this summer face extraordinarily high prices, and that is if they can find a vehicle available to begin with.
In recent months, the cost of rentals in the United States has skyrocketed due to rising demand and insufficient supply to match. Customers struggle with prices like $ 400 a day for a car in Orlando or $ 700 for a sport utility vehicle in Arizona.
In June, renting a car or truck was about 88% more expensive than the same time last year, which contributed to consumer price inflation in the United States, according to new data released by the US Bureau of Labor Statistics. This is in comparison to a period when the pandemic shut down much of the United States, forcing rental prices down, but the numbers are still 76% higher than in June 2019, before the Covid upheaval -19.
How Car Rental Prices Got So High
The pandemic has a lot to do with soaring rental costs. Last year, amid the drop in travel, rental companies dumped large numbers of cars from their fleets as they tried to survive. Now they find themselves in short supply when Americans are ready to start moving again. Companies trying to rebuild their fleets are also facing problems due to a shortage of semiconductor chips hampering the auto industry. A Deutsche Bank analyst who tracks the industry described it to the Washington Post as an “extreme example of supply and demand.”
Car rentals, like airlines and hotels, rely on dynamic pricing to determine how much a customer ultimately pays to reserve a vehicle. The response to supply and demand is immediate. Because rental companies have fairly fixed inventory on hand, the more cars Americans try to get, the more prices will go up.