‘Rental car eats away largest part of holiday budget’

Rental cars will remain very expensive this summer. Prices have increased spectacularly – some almost tripled – because there is more demand than supply. “A rental car eats away the largest part of your holiday budget,” some say. The best advice rental companies can give is to book in advance and on time.

In 2020, the travel market collapsed due to the Covid-19 health crisis. With their rental fleets stationary, companies tried to survive by selling parts of it. Meanwhile, tourism is back in full swing, but rental companies can’t meet demand. So, today, the law of supply and demand applies, and prices rise.

Chip shortage

Then why do rental companies not expand their fleet? Here again, the law of supply and demand applies. Car manufacturers cannot deliver new vehicles fast enough due to the worldwide chip shortage.

As a result, those who recently ordered a new car often have to wait six months or even one year for delivery. The same applies to rental companies, so they’re unable to expand their offer.

Ukrainian war

On top of the worldwide chip shortage, the Russian invasion of Ukraine is causing further  trouble. Ukraine is a crucial producer of wiring harnesses used in cars, but the war has seriously disrupted production. These problems lead to a shortage of new cars, indirectly playing tricks on the car rental sector.

Expectations are that prices of rental cars will decline again in the long term. But according to rental companies, the situation will never be the same as before.

 

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