Car rentals up to three times more expensive than pre-pandemic

The price of renting a car is up to three times more expensive than it was before the pandemic

Holiday-goers are facing car rental prices that are up to three times pre-pandemic levels, primarily due to a shortfall of vehicles.

Since Covid-19 hit Europe in early 2020, many rental companies have reduced the number of cars in their fleet.

Now, with tourism somewhat returning, companies are trying to raise these levels, but are being met with the challenge that manufacturers are producing fewer cars due to a global shortage of semiconductors.

With an insufficient number of cars to match the rising demands, prices of rental cars have risen significantly, and look set to stay that way into next summer.

Colm Brady, managing director, Europcar Mobility Group Ireland, said that it is reported that there will be a shortfall of almost 4 million cars in the market globally.

“It is envisaged that in some traditionally high demand areas there is likely to be an insufficient number of cars to meet the real demand.” 

On a popular price comparison site, a five-seater economy car, rented for two weeks from Rome airport will cost between roughly €900 and €1,300, far above pre-pandemic levels of €250 to €350.

According to Mr Brady, car rental is no different to other sectors linked to the travel and leisure industry, such as airlines and hotels.

Supply and demand

“Prices at any given time reflect the relationship between supply and demand. The advice that we would give is that if you need a rental car soon, plan ahead,” he said.

Mr Brady said that reservations lately have been very last minute, with the vast majority being made within a few days of travel.

“If you are looking for prices that are reflective of what you have experienced in previous years, you’ll have to book in advance and possibly avoid areas that are in high demand.

“Prices certainly won’t double but there will be increases at some destinations. We are very sensitive to price fluctuations and pride ourselves on offering a world-class service that is great value for money,” Mr Brady added.

It is not only rental cars that have been affected by market changes.

According to a survey from Cartell.ie, the average second-hand car is worth 16% more now than last year. 

This is due, once more, to a shortage of parts as well as Brexit and other factors.

Jeff Aherne, Innovation Lead, Cartell.ie, described the situation as "the perfect storm" adding that they have never seen anything like it since Cartell.ie was set up in 2006.

The global semiconductor shortage that is hindering car manufacturing has led to the Renault Group, Stellantis, Skoda, and Ford, all pausing production at European factories.

Earlier this week, Renault confirmed it would pause production at one site in France and two in Morocco and Romania.

It's expected the ongoing global semiconductor shortage would reduce the company’s annual output by 500,000 cars this year.