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Hire car shortage causes new travel headache


As state borders reopen and Australians book a holiday, a shortage of rental cars is sending hire costs through the roof.

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Sydney mum Amie Meehan had her eye on a family trip to Queensland as soon as the border opening was announced last month.

The family decided on Port Douglas, just north of Cairns, and sorted out flights and accommodation before realising what it would cost to rent a car for 10 days.

“I couldn’t believe how expensive it was, like $2000 – that’s almost four nights’ accommodation,” Meehan told The New Daily.

“That was just astronomical to me.”

Car rental prices have skyrocketed in Australia as domestic travel resumes in time for the holiday season.

“As state borders open up, car rental companies are charging abnormally high rates to keep up with demand,” Finder travel expert Angus Kidman told TND.

“Australians wanting to travel in the upcoming holiday season will be forking out between $750 to $2750 to hire a car for a week, compared to $200 to $700 this time last year.”

Travel aggregator Kayak found that the number of Australians searching for rental cars for the current holiday period has more than doubled compared to last year.

Prices have increased accordingly.

In New South Wales, the average daily cost of a rental car listed on Kayak between December 1 and January 31 was 72 per cent more expensive compared to the same time last year.

In Victoria, the increase was 38 per cent, and in Tasmania, a whopping 92 per cent.

In most states, the average price is more than double what it was before the pandemic.

Many rental services can’t keep up with demand because they sold unused cars at the start of the pandemic.

Making things worse are the global chip shortage, which means new cars are in short supply, and the reluctance of consumers to book in advance due to the threat of pandemic-related disruptions.

According to Statista, just five players – Budget, Hertz, Avis, Europcar and SIXT – make up 80 per cent of the rental car market.

However, services like Car Next Door, DriveMyCar and Turo are shaking up the market by allowing people to rent cars from other individuals.

That’s exactly what Meehan did, hiring a Suzuki Swift in Port Douglas for $712 when a Toyota Corolla or Yaris would cost more than $1800 for the same 10-day period.

“I haven’t really tried that before – I’ve only just signed up to Uber,” she said.

Car Next Door co-founder and CEO Will Davies told TND that because customers hire cars from other people, the platform isn’t constrained by the same supply and demand issues crippling traditional rental car companies at the moment.

“People aren’t flying to Bali, they’re flying to the Gold Coast, and there’s just no rental cars but there’s heaps of demand,” Davies said.

“So the supply and demand is getting completely out of whack, and the pricing is getting out of hand.”

Finder’s Kidman said services such as Car Next Door, DriveMyCar and Turo are especially worth considering amid the current price hike.

“While not available in all locations, they’re a solid option because you are paying a local person to borrow their car,” he said.

Regardless of whether you’re booking with one of the big rental car companies or going with a car-sharing startup, there are still a few things you can do to get the most bang for your buck.

Kidman said to book early and, if possible, to avoid booking at airport counters because those prices are always higher.

“Some companies, including and DriveNow, feature price match or best price guarantees,” he added.

“If you find a comparable deal, call them up to match or even better the price.”

According to data from Kayak, the cheapest week to rent a car in Australia this holiday season is from January 24 to January 30, with the average price across all states sitting at $92 per day.

The most expensive week is December 27 to January 2, with an average price of $157 per day.

This article was originally published in The New Daily.

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