It might be hard to believe that a "cheap" vacation can exist anymore, given that prices for everything have increased. That's especially true if you need a rental car for your trip.
When the pandemic shut down the world, the travel industry took a steep hit. Car rental companies in the U.S. had lots full of cars that no one was renting, so to stay solvent, they sold off their excess inventory. While that strategy helped them survive in the short term, it's also driven increases in rental car prices for consumers.
When people felt comfortable traveling again, they went right back to renting cars, causing the industry to quickly rebound. After revenues fell 27.4% in 2020, the industry experienced record growth in 2021, according to Auto Rental News.
Unfortunately, the sharp increase in demand left car rental companies in the lurch, as supply chain issues and semiconductor chip shortages made it difficult for them to replenish their inventories. Car rental companies' ability to buy new cars is at its lowest rate in 20 years, per Auto Rental News.
While rental companies are adding more cars to their lots, it's not at a pace to meet demand. This has sent car rental prices soaring, forcing consumers to budget a much larger portion of their travel expenses for car rentals.
Though the overall situation has improved since last summer, 93% of U.S. travelers plan to take a vacation this year — according to a February 2022 report from The Wall Street Journal — so demand is still high. A nationwide shortage of rental cars still persists, which will make a summer getaway in 2022 more expensive than it was pre-pandemic.
CoPilot looked at Business Travel News' Corporate Travel Index to find which cities had the most expensive car rentals in the fourth quarter of 2021 (the latest data available), as well as how it's changed year over year. The data averages car rental rates and taxes in 100 large U.S. cities using booking information from three major corporate travel companies. The average cost to rent a car in the U.S. during this time frame was about $46.18 per day, down 6.2% from the year before.
Read on to see what a rental car costs at your travel destination and whether you should consider booking it early.