HOLIDAY

What to Know About Renting a Car This Holiday Season

Americans who plan to rent cars for holiday travel this year should book soon, or risk facing scarce options and high prices.

Now, those diminished fleets are a potential problem for anyone who expects to rent a car. Holiday travel this season is expected to be robust. About half of the respondents to a holiday-outlook survey from PricewaterhouseCoopers said they expect to travel for the holidays this year, up from about one-third in years past.

“Folks may get lulled into a false sense of complacency that the rental-car shortage is over, and that’s definitely not the case,” says

Jonathan Weinberg,

founder and chief executive officer of AutoSlash, a website that finds rental-car deals.

Here are some tips to help you navigate holiday car rentals.

Don’t wait to book

The advice from earlier this year to book a rental car as soon as possible holds true now.

Many travelers typically book flights or hotels before making rental-car reservations. “Do it much earlier than you normally would,” says

Mike Taylor,

travel-intelligence lead at research firm J.D. Power.

William Casella,

owner of Explore Rentals, outside Bozeman, Mont., says his company typically books out for Christmas by this time of year, and 2021 is no exception. But this year, he has more inventory than he did in past years, in part because the company “bought everything we could buy,” and because he placed orders for more vehicles last summer when he saw how demand for nearby national parks and ski areas was increasing.

He expects strong demand to continue. “We already have bookings for next Christmas on the books,” he says.

Expect to pay more in New York and Hawaii (but less in California)

Rental-car prices fell from their sky-high summer rates after the Labor Day holiday, as demand dropped with fewer people traveling during the shoulder season. But prices are still higher than they were pre-pandemic. Rates are averaging $75 to $100 a day for the Thanksgiving holiday right now, compared with $40 to $60 during this time in 2019, says Mr. Weinberg, and prices are expected to increase, especially for Christmas travel.

New York City is one of the most popular rental-car markets for the Thanksgiving holiday, and the most expensive, with prices averaging $135 a day, according to data from the travel company Kayak.

It has become difficult to rent a car in the U.S., especially at popular vacation destinations. To learn what’s behind the spike in rental-car prices, WSJ spoke with an industry analyst and WSJ’s Nora Naughton. Photo: Luke Sharrett/Bloomberg

Travelers to certain locations will notice that some prices haven’t budged much from earlier summer highs. It cost $221 a day to rent a car over Memorial Day weekend in Bozeman, Mont., and now costs $229 a day to rent one over Christmas, according to Kayak’s data. Bozeman is the most expensive rental-car destination this Christmas, according to the company.

Rental cars are also projected to be in high demand in Hawaii. Lihue, on the island of Kauai, is the second-most expensive rental-car destination this Christmas, at $186 a day, according to Kayak. Mr. Weinberg says that there is a significant shortage of vehicles on the island of Kauai, with many dates already sold out through the end of the year.

Travelers will find cheaper rates in other areas of the country. Many locations in California rank among the cheapest for the Christmas holiday, including Sacramento, at $67 a day, Oakland at $80 a day and San Diego at $82 a day, according to Kayak.

Consider a peer-to-peer or alternative rental service

Peer-to-peer car-sharing services have seen an increase in business as travelers struggling to find rental cars from bigger companies have turned to their services. Turo and Getaround allow car owners to list their vehicles for rent on the platforms.

On Turo, hosts set the daily price for their cars, so users can find rentals at a range of price points, with rental options including vehicles as diverse as minivans and classic 1966 Mustangs, Chief Marketing Officer

Andrew Mok

says.

On the Turo peer-to-peer platform, car owners list their individual vehicles for rent.



Photo:

Smith Collection/Sipa/Associated Press

Travelers who rent cars from traditional companies might decline additional rental-car insurance because they receive coverage through their personal auto-insurance policy or credit card. But not all major auto insurers or travel cards extend coverage to vehicles rented from peer-to-peer services. Turo encourages guests to check with their individual plans to see whether they are covered, or choose from its protection plans, which range from between 18{3132c872e6c78dc13c400a594a399f7f701f7fca090fe22c84668d12b33a9deb} and 25{3132c872e6c78dc13c400a594a399f7f701f7fca090fe22c84668d12b33a9deb} of the trip cost for minimum protection plans, to 40{3132c872e6c78dc13c400a594a399f7f701f7fca090fe22c84668d12b33a9deb} for standard plans.

Another service, Kyte, allows users to reserve rental cars that are then delivered to them by a driver.

With prices higher, don’t give up on discounts

Costco,

AAA, AARP and USAA are a few entities offering programs that can provide members with discounts when booking rental cars. Some travel credit cards also offer rental-car discounts.

Travelers can compare and contrast deals on their own, or try using a service such as AutoSlash, which allows users to input any club or association memberships as well as their travel cards, and then finds deals. It will also notify travelers if there is a price drop to allow them to rebook.

Stay flexible

If you are flexible about the vehicle you want, the dates available and the pickup location, you will have better success securing a reservation, says

Greg Scott,

spokesman for the American Car Rental Association.

Kayak’s data shows that in New York, Thanksgiving travelers can save an average of 9{3132c872e6c78dc13c400a594a399f7f701f7fca090fe22c84668d12b33a9deb} by picking up their rental car from a location away from the airports.

SHARE YOUR THOUGHTS

Have you encountered issues finding a rental car? Share your experience, and join the conversation below.

Some car companies will offer discounts for prepaid rates, though those rentals are often subject to cancellation and change fees. Mr. Weinberg recommends booking a pay-later rate, which doesn’t require putting a credit card down. “A lot of our customers end up rebooking two, three, four, five times any time they’ll lower their rate,” he says.

Customers should also expect to encounter some challenges when picking up rental cars in some instances, says

Neil Abrams,

president of Abrams Consulting Group, a car-rental consulting firm. “There will be customers waiting for cars to show up in the ready spaces even with a reservation,” he says.

Buying and Selling Cars During the Pandemic

Write to Allison Pohle at [email protected]

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