When budgeting for your trip, don’t assume that lodging and airfare will be your biggest expenses. Now more than ever, rental cars are becoming one of the biggest components of people’s vacation budgets.
Airfare and lodging prices are certainly nearing all-time highs, but car rentals are one of the biggest increases in all travel costs. Comparing prices between July 2022 and July 2019 (the last normal summer before the pandemic), according to the latest set of consumer price index data released in August 2022, hotel prices were 7 % is up. Airfares are up 16%. However, rental cars have increased by a whopping 48%.
When did car rental prices go up?
Like most travel costs, rental car prices plummeted in April and May 2020 as people started canceling their vacations to stay home. However, things started to turn around in early 2021 when prices began to rise monthly and hit a record high in July 2021.
Road trips were particularly hot that summer (hence the high demand), but other factors, such as the global semiconductor shortage and the tourism industry’s labor shortage, contributed to the supply shortage. In fact, an analysis of the American Travel Association’s Bureau of Labor Statistics data shows that employment in the leisure and hospitality sector is 7.8% below pre-pandemic levels.
Prices have fallen slightly from July 2021 records, but are still well above pre-pandemic prices.
How to find affordable car rentals
NerdWallet conducted an analysis of 360 rental car bookings to better understand the cheapest way to rent a car. Some of our findings may help you save on your next rental car.
Among the car rental companies analyzed, Enterprise is usually the cheapest and National is the most expensive. Our analysis also found that last-minute rentals are usually cheaper than those booked months in advance. And in most cases, you’ll save by booking at an off-site car rental location rather than at the airport.
That knowledge can help you get a better sense of the cheapest places to book, but bookings from specific locations or companies may be non-negotiable due to the nature of travel. help.
– Use of travel credit cards: Some travel credit cards offer car rental insurance as part of their benefits, but some countries exclude certain types of expensive cars or rental cars. However, if applicable, it will save you the cost of additional insurance that you may have signed up for at the counter.
– Join our car rental loyalty program: Benefits vary by Elite status level, but some levels may include free upgrades or fee waivers. You can also get your status automatically through your credit card. But even the entry-level free-to-join tier can include perks like priority lines.
– Book now and pay at the counter: Many car rental companies offer the option to pay at the counter. Paying on pick up has two big advantages compared to paying in advance. First, if you need to cancel your trip, you don’t have to pay for it, which saves you the headache of trying to get a refund. Second, if the rate drops, you can always cancel and rebook at a lower rate.
How to save money on road trips
Throw in high gas prices, and road trips can become one of the most expensive ways to travel these days. Here are some ways to cut costs.
– Use the app to find cheap petrol: Apps like GasBuddy can help you track local gas prices and find the cheapest gas stations along your route.
– Consider an electric car: With an electric car, you don’t have to pay for gas completely. Charges may still apply, but some hotels offer free electric vehicle charging as a guest benefit.
– Plan a budget-friendly route: If you’re generous with location, consider driving through states with cheaper gas prices. His three states with the lowest gas prices in the last week of July were Georgia, South Carolina and Texas, according to AAA data.
Why you should start planning your trip with car rental prices
Make sure you have room to spare before indulging in the excitement of a road trip. Prices are significantly higher than they were two years ago, so be on your guard. Don’t book flights or hotels until you’ve compared car rental prices and included them in your travel budget.
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This article was provided to The Associated Press by personal finance website NerdWallet. Sally French is a writer for her NerdWallet. Email: sfrenchnerdwallet.com.