The 'car rental apocalypse': Why renting a car is tough in 2021

The pandemic has changed the travel industry in ways we never thought possible. Air traffic is recovering but still down from 2019 numbers, and many countries have kept their borders shut for close to a year now. But there's another change that none of us thought possible: it's getting really hard to rent a car.

Why is this happening? A myriad of reasons. To start, many rental car companies fell on hard financial times shortly after the pandemic started. This caused these companies to quickly sell large portions of their fleet and cancel upcoming orders. In turn, once travel started to pick back up, they were woefully underprepared for a surge in new bookings.

This has had some terrible repercussions for travelers. Some have shown up at airport rental booths only to find that their previously confirmed reservations have been canceled due to lack of supply. This can lead to major travel mishaps — especially if you need a rental to get to your final destination.

In this article, I will go in-depth and discuss why it's so hard to rent a car in 2021. This includes insights from Jonathan Weinberg, the CEO and co-founder of Autoslash, a company that helps travelers find great rental car deals. Then, I'll discuss a few ways you can make your 2021 rental car experience easier and less prone to being canceled.

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The rental car "apocalypse" is making it harder than ever to rent

We'll jump into why it's so difficult to rent a car in a minute, but first, what can you expect when renting a car right now?

As previously mentioned, travelers are now faced with issues never before seen on such a wide scale. To start, many reservations are simply not being honored by the rental agency. Travelers have reported showing up at the rental counter only to be turned away because there aren't enough cars on the lot.

Plus, it's next to impossible to rent in some tourist-heavy destinations these days. According to Weinberg, destinations like Phoenix, Maui, Kona, and various Florida cities simply don't have cars available on many dates. This is especially true over peak summer travel dates. In fact, Weinberg told us that 18 out of 20 airports in Florida were sold out of rental cars on some days in early March.

Weinberg told TPG the following:

"It's now almost impossible to find a car on Maui or the Big Island if you're traveling in the next few weeks, and where there is sporadic availability prices of $250+ plus for a basic car are not uncommon. Travelers are canceling entire vacations because they either can't afford a car rental or simply can't find an available car at any price."

I confirmed the shortage in Hawaii by running a test search with Hertz. I looked for a weekend rental in Kona and Kuai, and neither had cars in stock when booking just over two weeks out.

The same goes for National and Enterprise — no cars were available in Kona on the same weekend with either company.

Weinberg also notes that rental cars are getting more expensive. In prime tourist destinations like Arizona, Hawaii and Florida, Autoslash has seen a 300% increase in car rental pricing. Weinberg estimates that rentals have skyrocketed by 30% nationwide, so it's hard to escape this sudden increase in pricing.

Related: The Critical Points: Five steps to a perfect car rental

Why is it so hard to rent a car in 2021?

So, what's the reason behind this rental car madness? A few things.

As discussed in the intro, one of the main drivers is fewer rental cars available at tourist destinations. Rental car companies fell on hard times at the start of the pandemic. We saw demand drop as much as 90% in the early weeks, forcing companies like Hertz to file for bankruptcy. On the other hand, Silvercar — a rental car company owned by Audi — completely shuttered airport operations.

In the process, these companies fire-sold large portions of their rental fleets at a deep discount. Further, according to Weinberg, many of these companies canceled orders for new cars too. Now that demand is back, rental car companies are also finding it harder to rebuild their fleets due to manufacturer shortages caused by factory shutdowns and recent semiconductor shortages.

Weinberg also said we're seeing more people rent cars for months at a time. This is largely fueled by people moving from the city to the suburbs due to the pandemic. Many of these people did not own a vehicle previously and now need one to get around. Again, this is taking cars out of rental car lots for vacation renters.

On the bright side, leisure travel is rebounding, so it makes sense for rental cars to be in high demand at tourist hubs. That said, it's rebounding faster than rental car companies predicted, leaving them underprepared for a sudden surge in demand.

Related: 11 common rental car mistakes — and how to avoid them

How to protect yourself when renting a car

Not all is lost with renting a car this year. Weinberg shared a few useful tips for making your 2021 car rental experience more seamless and less prone to surprises. I'll walk you through his tips (and some of my own) in the text below.

Book your rental as far in advance as possible

Weinberg warns that you should reserve your rental car as far in advance as possible. In his own words:

"This is the single most important way to ensure that a) you have a rental at all, and b) that you don't end up paying more than you have to for it. Do not let it be an afterthought. People who wait until the last minute will do so at their peril."

This makes sense. As seen in my examples above, even two weeks out from the day of travel isn't enough for a rental in some popular destinations. It's in your best interest to start looking for a car as soon as you start to plan out your trip. If you're booking a pay-later rate, it may be worth reserving a car even when you're just starting to plan out your next trip.

Consider making two reservations

If you're visiting a tourist destination, you may want to make two refundable reservations. We don't recommend doing this often, but it's nice to have a fall-back if you absolutely need a rental car for your next trip. Just make sure to cancel the other reservation if you decide to do this and not book a pre-paid rental.

Use AutoSlash to book your rental cars

AutoSlash not only helps you save money on car rentals, but it can help you find hidden availability too. Its team looks for your rental cars by hand and can tweak your rental to find the best price and availability. For example, adjusting your pickup time by an hour, moving your request from off-airport to the nearest airport (or vice-versa), or offering a full-size SUV if minivans are sold out. This can be a gamechanger when traveling to tourist hotspots.

Join rental car loyalty programs to skip long lines

Lines at rental car counters are longer than ever at some tourist destinations. Most rental car companies let loyalty program members skip the line and go right to their car. Some of these programs include Hertz Gold Rewards and National Emerald Club. Simply enroll beforehand and you'll skip the line and earn points on your next rental.

Pay with the right credit card

Here's a personal tip: always pay for your rentals with a card that offers a primary damage waiver. This protects you from damage and theft — up to the car's full value in most cases. Doing this will let you save money over buying a damage waiver from the rental car company. Plus, if you need to make a claim, you can skip your personal car insurance. This could protect you from higher car insurance rates.

The Chase Sapphire family of credit cards offers a primary damage waiver so long as you pay for your rental with your card. Plus, the cards earn bonus points on travel purchases. Here's a look at current welcome offers:

• Chase Sapphire Preferred Card – Earn 60,000 bonus points after spending $4,000 on purchases in the first three months from account opening. Earns 2x points per dollar spent on travel and 3x points per dollar spent on dining purchases.
• Chase Sapphire Reserve – Earn 60,000 bonus points after you spend $4,000 in the first 3 months from account opening. Earns 3x points per dollar spent on travel and dining purchases.

Related: How to never pay full price for a rental car

Bottom line

Renting a car in 2021 is difficult. The lack of cars and the fast-recovering travel industry lead to car shortages — and given supply constraints, it's hard for rental companies to purchase new vehicles to expand their fleet. This leads to car shortages and sky-high prices in tourist hotspots like Arizona, Florida and Hawaii.

The situation is likely to stay this way for the coming months as rental companies rebuild their fleets. So until then, make sure to follow the tips outlined in this article when renting a car. They could save you time, money and frustration on your next trip.

Feature photo by Jeffrey Greenberg/Universal Images Group via Getty Images