Now, more than ever, rental cars are shaping up to be one of the biggest – and stubbornly high – aspects of people’s vacation budgets. And while airfare and lodging prices are certainly near all-time highs, rental cars are among the biggest price increases of all travel expenses.
When comparing prices for 2022 versus 2019 (the last normal summer pre-pandemic), hotel prices are up 7% and airfares are up 16%, according to the latest set of US Consumer Price Index data released in August 2022. But rental cars are up a whopping 48%.
When did prices get so high?
Like most travel costs, rental car prices sharply dropped in April and May 2020 as people began calling off vacations to stay at home. But things began to turn around at the beginning of 2021 when prices began increasing every month, building up to a record high set in July 2021.
Road trips were especially hot that summer (thus high demand), but other factors – including a global semiconductor shortage and tourism industry labor shortages – contributed to low supply.
Prices have slightly dipped from the July 2021 record, but they are still far above pre-pandemic pricing.
How to find affordable rental cars
NerdWallet conducted an analysis of 360 rental car reservations to better understand the cheapest ways to rent. Some of the findings may help you save on your next rental car.
Among the rental car companies in the analysis, Enterprise is usually the cheapest, while National is most expensive. The analysis also found that last-minute rentals are typically cheaper than those booked months in advance. And you’ll almost always save by booking at an off-site rental car location versus at the airport.
That knowledge can lead to better understanding of the cheapest places to book, but sometimes booking from a specific location or company might be non-negotiable with the nature of one’s trip. These other tricks can still help you save:
• Use travel credit cards: Some travel credit cards offer rental car insurance as part of their benefits, though it may exclude certain types of expensive cars or rentals in some countries. When it is applicable though, it can save money on the extra insurance might have otherwise been purchased at the counter.
• Join rental car loyalty programs: Benefits vary based on your level of elite status, though some levels can include free upgrades and waived fees. You might even get automatic status through a credit card. Yet even the entry-level, free-to-join tiers can include perks like priority lines.
• Reserve now and pay at the counter: Many rental car companies give clients the option to pay at the counter. Paying upon pickup has two major benefits versus paying upfront: First, should you need to cancel your trip, you remove the headache of trying to get a refund since you won’t have put down any money anyway. Second, if rates drop, you can always cancel and rebook at a lower rate.
How to save money on road trips
Throw in high gas prices, and road trips might be one of the most expensive ways to travel these days. Here are some ways to cut back on costs.
• Use apps to find cheap gas: Apps like GasBuddy track local gas prices and can help you find the cheapest gas stations along your route.
• Consider an electric vehicle: With an electric car, you’ll avoid paying for gas entirely. While you may still have to pay to charge it, some hotels offer free electric vehicle charging as a guest benefit.
• Plan a budget-friendly route: If you’re open-minded to location, consider driving through provinces or states with lower gas prices.