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We've all heard the horror stories swirling amid the current rental car shortage: Tourists leasing U-hauls in Hawaii as a last resort, or travelers being charged hundreds of dollars per day for a subcompact car. Now, approaching the busy holiday travel season, many travelers are wondering if they should even attempt to secure a rental car during November and December.
It's no doubt a complicated issue. At the start of the pandemic, demand for rental cars at airports dropped by 80 percent, says Greg Scott, a spokesperson for the American Car Rental Association. “As a result, car rental companies were left with hundreds of thousands of unused cars in their rental fleets,” Scott says. “They had trouble figuring out where to park all the unused rental cars, let alone pay for them without rental revenue.” So the companies began to “de-fleet,” or sell off their cars, according to Scott.
In recent months, however, demand for cars has been returning—and even exceeding pre-pandemic levels. According to a new survey from AmEx Trendex, rental car bookings in August of 2021 were 41 percent higher than the same month in 2019.
As demand spikes, rental car companies are trying to rebuild their fleets—but it has been difficult. Due to global supply chain issues, there are fewer new cars on the market to buy worldwide. Even buying back the rental cars that were sold off at the onset of the pandemic is more expensive because of the lack of car inventory.
What's the outlook this holiday season?
Searches for rental car bookings for the 2021 holiday travel season have already surged past pre-pandemic searches by 230 percent, according to travel search site Kayak.
To help boost their inventory, some rental car companies are taking measures such as holding onto cars in their fleets for a longer period of time—like until the car's mileage reaches 50,000 miles, rather than 20,000 or 30,000 as was the norm in 2019, according to Scott. While that might keep a portion of cars on the road, rental cars will still be hard to book come Thanksgiving and Christmas, and the ones that are available will likely be expensive.
“Due to the uptick in demand, we encourage customers to make rental car reservations as early as possible and don’t miss out on benefits that can help make the most of your trip,” says Audrey Hendley, president of American Express Travel.
Indeed, now is the time to book if travelers want to have a chance at locking in a rental car for November and December—and score a relatively good deal as well. Although daily rental rates are higher on average than they were last year (66 percent higher, according to Kayak), prices for the holidays are dipping slightly right now. “Average [rental car] rates per day for the holiday time periods are currently trending downward, but as pricing can fluctuate there’s no guarantee how long these rates will last," says a holiday travel trends report from Expedia.
Here are a few other strategies on how to make your rental car game plan this holiday season.
Look for deals by location
If you have flexibility in your holiday travel plans it could be worth flying into a smaller airport or city within driving distance of your destination—or booking your trip around places that have car availability and low prices.
Some of the cheapest U.S. cities to rent a car, according to Kayak's data, currently include Burbank, California ($68 per day); San Diego ($72 per day); Milwaukee ($78 per day); Cleveland ($81 per day); and Seattle ($81 per day).
Travelers heading to Hawaii or cities near popular national parks should expect to shell out for their rented ride: cars in these destinations are some of the most expensive in the country. The average daily price to rent a car in Maui over the holidays is $183 per day, closely trailed by Honolulu ($164 per day) and Lihue on the island of Kauai ($164 per day as well). Steep prices also abound in Jackson, Wyoming ($156 a day) and Bozeman, Montana ($143)—two gateway cities for Yellowstone National Park, which has been seeing record numbers of visitors this year.
Many people traveling for the holidays are visiting family or are otherwise locked into a destination. Fortunately, there are still ways to make a car reservation less expensive, like putting your credit card points or airline miles to use. "Our Pay with Points on prepaid rental car bookings feature has become very popular with card members since we launched it last year,” Hendley from AmEx says. Other credit card issuers also offer easy ways to cash-in points for rental cars. Reserving a car through Chase's travel booking portal, for example, can mean a good deal for holders of certain cards, like the Chase Sapphire Reserve, whose points are worth 1.5 cents each when cashed in through the platform. Capital One's Venture Card also has an easy program to cash in miles toward travel purchases like rental cars.
Additionally, many frequent flier programs also offer the opportunity to put airline miles toward a rental car reservation. These options usually aren't the most valuable ways to use points or miles, but they can offset the surging costs of cars in some areas.
Try non-traditional rental companies
A variety of startups, companies like Turo or Kyte, are sourcing their cars in different ways than the major chains, meaning they aren't subject to the same supply issues.
Kyte, which delivers rental cars right to users' doors, has a platform that allows it to source cars in multiple ways, like leasing cars in addition to its owned fleet. “This hybrid model gives us an advantage in maintaining a steady supply to bypass the major shortages that traditional rental car companies have experienced,” says Nikolaus Volk, co-founder of Kyte. Before Thanksgiving, Kyte is expanding to two new cities: Brooklyn, New York, and Long Beach, California, which will bring the total number of cities it operates in to 11.
Turo, sometimes referred to as “the Airbnb for cars,” lets regular car owners list their vehicles on the company's app for a daily rate they set themselves. Users can scan through the options until they find a car that's the right price and size. The service is available in more than 5,000 cities in the U.S., Canada, and the U.K., and the daily rates for Turo's cars tend to be much lower on average than the rates from rental chains.
Book a flexible reservation
Finally, when you do find a car reservation that fits your budget and location, be sure to make a flexible booking. Expedia's report advises to filter your search options to ones that allow “free cancellation” or “pay at pick up.” This means that if a better deal comes along, you'll be able to cancel the previous booking without being charged a penalty—or for the full reservation.
Unfortunately for travelers, the shortage of rental cars is likely to continue to be an issue even once the holidays are over. “Some experts have said it will be mid-2022 before supply chain challenges resolved themselves and new car inventories return to pre-pandemic levels,” Scott says. But if you know where to look and when to book, you'll be able to save yourself time, money, and—hopefully—a huge headache.
All products featured on Condé Nast Traveler are independently selected by our editors. If you buy something through our retail links, we may earn an affiliate commission.