How Much Does it Cost to Rent a Car?

By the end of 2021, car rental prices hit an all-time high due to the chip shortage, increased demand, and other supply chain issues. Sadly, it doesn’t seem that these wild prices are going anywhere anytime soon. So, how much does it cost to rent a car these days? Has it gone up even from last year? Will car prices ever level out to their pre-pandemic numbers?

man standing in front of a sign reading "Budget car rentals" although the cost of a rental car has skyrocketed over the last few years.
Bob Ansett, outside his Budget rent a car office, circa July 1979 | FAIRFAX ARCHIVES Getty Images

How much does it cost to rent a car in 2022? 

According to Car and Driver, the average cost to rent a car has gone up by $34 a day since 2019. This is a pretty hefty increase in such a short period of time. Kayak says the average rental car price in 2019 was $46, and by December of 2021, that average rental price was up to $81 a day. 

Not only are rentals more expensive, but there are also fewer of them to go around these days. 

Why are there so few rental cars? 

empty airport car rental terminal
Empty Rental Car kiosks Francis Joseph Dean/DeanPictures)

Many rental fleets held massive sell-offs in 2020. For one, carmakers had trouble building cars, given the shortage. Two, the demand for used cars ran through the roof as a result. So dealers and other third-party sellers were buying everything they could, and rentals were down. There was only one choice for the rental car companies, sell. 

After the massive sell-offs, the rental car companies have been hesitant to re-stock because of supply and the cost of a re-stock. 

Why are rental cars so expensive right now? 

Car and Driver points at the lack of stock as the main driving force of the price hike; you remember from high school, supply and demand. Auto Rental News knows a thing or two about the rental car business, and it estimates that rental companies added only 725,000 new cars to their fleets in 2021. This is a nine percent decrease from acquisitions going into 2020. 

So massive sell-offs, increased replacement prices, a lack of wholesale inventory, and the uncertainly of the market all play major roles in the current state of the rental industry. 

“Car rental rates closed at record levels at the end of 2021, and I would expect more of the same for 2022,” Chris Brown, ARN’s executive editor, told Pittsburgh-based WPXI. “The automakers are frankly favoring retail sales over rental fleet sales at this time, so car rental companies are hunting for deals just like consumers are, and they’re paying closer to what consumers pay.”

When will car prices go back to normal? 

I’m not sure we even gauge what “normal” is anymore. What we do know is the numbers. We’ve established that supply seems to be the major roadblock, so as soon as supply returns, so too should more reasonable car rental prices. 

The rental car industry added almost 1,739,000 vehicles in 2019. Car and Driver points out that ARN said that rental companies would buy around 800,000 cars in the fourth quarter of a normal year. In 2021 the rental companies only bought 94,000 units. Seeing the abysmal state of the car supply, ARN doesn’t think the cost to rent a car will drop until after 2022. But, if inflation continues at its current rate, even if the car supply is worked out by 2023, the price may well not drop. This is doubly true if the car rental companies think we’ll keep paying.

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