Why your rental car may be more expensive than your hotel and flight combined

Tuesday, March 30, 2021
Why rental cars are so expensive
In the beginning of the pandemic, rental car companies sold off vehicles to help stay afloat. Now, as travel picks back up, rental cars are scare -- and expensive.

SAN FRANCISCO (KGO) -- The price of travel is a good news, bad news story these days. Let's start with the good news: getting from here to there in today's world is a bargain.

Here's Scott Keyes from Scott's Cheap Flights: "Just within the past few weeks out of the Bay Area we have seen flights out to Hawaii for $198 round trip; we have seen flights down to Costa Rica for $260 round trip, even flights over to Portugal for $367 round trip."

Now the bad news. Ed Murphy was on a business trip when he heard the cost of a rental car. "They said the only thing available was something like $400 to $450 a day," Murphy recalls.

Murphy travels around the country for his job in construction. He was hit with that rental car tab when on the job in Orlando.

Las Vegas is another example. You'll pay an extra $100 a day over the usual rates there.

Jonathan Weinberg is founder and CEO of car rental website, Autoslash. He says the increase in car rental prices has been caused by the pandemic.

"When COVID started, the rental car companies basically went into survival mode," he says. "They had to sell off large portions of their fleet just to survive."

Now, the companies can't buy cars fast enough to keep up with demand. That means your car rental can cost more than your flight and hotel combined.

Weinberg says there is no letup in sight. "The bad news is that it's probably going to get worse before it gets better," he says.

More travelers, fewer cars. Which brings us back to Ed Murphy in Orlando. What did he end up doing?

Murphy told us, "So I said, 'That's ridiculous and there's no way I'm going to pay that,' so what I ended up doing is taking my own vehicle" -- which meant hours of additional driving.

So when planning travel keep in mind: airfares may be a bargain now, but that doesn't mean you are booking a cheap trip.

Take a look at more stories and videos by Michael Finney and 7 On Your Side.

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