USA Car hire prices have risen dramatically over the last year, according to new figures published by Abrams Consulting Group, an American organisation that tracks car hire rates.
For example, the average weekly rental rate for a compact car hired at a US airport was $347.44 in mid-June – up from $210.38 at the same time last year. That’s a 65% increase. (Source: New York Times).
The problem is simple – the recession has reduced demand for car hire but car rental companies have reduced their fleets by more than the reduction in demand. The benefit for the hire companies is obvious – higher fleet utilisation and the ability to increase rates, bolstering profits.
However, it’s not simply a question of car hire companies trying to exploit tough times. They’ve had to make changes to survive. There are three main reasons for this:
1. Secondhand car values have fallen, reducing the value of hire companies cars when they sell them.
2. New car costs have risen in many cases, as struggling car manufacturers readjust their business models.
3. Finance costs have risen and the availability of finance has been reduced, in many cases.
Given all of this, doing what the car rental companies have done just makes good business sense – but there is no denying that the result, for customers, is that rental rates are up.
Significant price rises like this like this make it even more important to shop around and compare car hire quotes before booking.