Guess who’s back…back again? No, it’s not Slim Shady...it's the Carpocalypse!
About a year ago, we posted an article to help people understand the shortage of rental cars and explained how it was impacting relocating employees. In that post, we shared that heading into the summer months — which is typically the busiest season for moving and travel — demand for rental cars would be escalating and that we were anticipating situations that we had not seen, maybe ever. Due to pandemic-related challenges, rental car companies sold off a huge portion of their fleets as they did not get any bailout money. At that point, the semiconductor chip shortage was also making it challenging for them to build back their car inventories. This shortage, coupled with high demand, created an increase in rental car fees. In some cases, a car that was previously rented for $65 per day was renting for over $200 per day.
We suggested that when scheduling a trip, you should book the rental car first — particularly if heading to a popular destination.
So, where are we at today as we gear up for another potentially record-setting peak season? I tuned into a LinkedIn Live show, where Jesper Løvendahl (founder and CEO at ExpatRide) warned that rental car companies will run out of cars this summer! He said, “I’ve spoken to AVIS, Enterprise Rent-A-Car, and Hertz; they all say the same: 'We expect to be sold out over summer in most locations.'" In other words, the "Carpocalypse...Part Deux" is looming ahead.
How will this impact global mobility programs that are stepping back into high-volume, "let's move" mode? Løvendahl said:
- Expect prices to go up, even as much as 100-200%.
- It will be difficult to secure a rental.
- Renters will have limited choices. They will get whatever is available, including cars with more wear and tear.
- Expect long waits at rental car counters.
- Employees with lump sums or capped amounts may feel more limited in their options.
- There may be an impact on home-finding/look-see trips.
- Mobility programs are likely to experience increased numbers of requests from employees to extend their rental cars with many of these needing to work through the “exception” process.
This article in the Washington Post highlights eight things that we feel will be helpful to keep in mind as mobility programs deal with rental cars challenges over the next few months:
- It's not clear when “normal” will return, but most expect not until way into 2023.
- Expect to pay more for rental cars – like nearly 60% over the pre-pandemic norms.
- Reserve rental cars as early as possible. When arranging a trip, book the car first! (Just as advised last year, and especially during any holidays!)
- Be as flexible as possible.
- Look into alternatives, like ExpatRide, car-sharing services (e.g., Turo and Avail), and Uber and Lyft (both offer car rentals through the same app you would use to book a ride).
- Join loyalty programs and earn points that can help offset the costs.
- Use money-saving tips (e.g., memberships to AAA, Costco, or AARP). You can find more budget-friendly solutions here from tips reporter Natalie Compton.
- Keep fuel prices in mind. Return the car full! As the article says, no one takes the prepaid gas option from the car company!
During last year's "peak season," movers at times struggled to meet packing, shipping and delivery timelines, while relocating employees faced challenges securing long-term housing in their destinations due to low supply and losing out on multiple bids. We also saw the ongoing delays of new car availability. With all that said, it’s easy to see how we could be in for another "peak season on steroids" and how difficulties with securing and extending rental cars may play into the summer move experience again.
The “rental car apocalypse” dawned a little more than a year ago as vaccinated travelers started to venture back into the world only to find fewer vehicles and hiked-up prices. Experts say the scenario is slightly less doom and gloom now — but also far from the pre-pandemic norm.