My wife and I are spending 10 days in Palm Springs and Sedona, Arizona in February. We are renting a car and rather than drive back to Palm Springs to fly home we made our return flight out of Phoenix. After booking our flight I then went to book the rental car and was shocked at the price. Even the smallest car is close to $1000 per week apparently due to a drop off fee.

I’ve seen rental car drop off fees when dropping in some obscure place where there is low volume of renters to take the car out. But Phoenix? Is this common? Is this a seasonal thing? I’ve done numerous one way rentals in Europe and the US and don’t remember drop off fees.

yes it's busy season for Palm Springs, they don't want cars leaving the area.

If it's worth saving $600 to you, you could take a train ride or a shuttle to Ontario California and rent there.

You generally pay drop off fees in Europe. Sometimes they are listed separately and sometimes just folded into the price. I assume in some areas, you might find little or no increase if the rental car company needs cars moved to the location where you are dropping the car off. Once I rented a car in New England for a price much lower than normal because they were encouraging me to take their car from Vermont to Boston.

Anyway, have you tried Enterprise? I looked at rentalcars.com and picked a generic week in February. Their lowest rate was $373 week, including all taxes, surcharges and rip-offs. It is the only car that came up that was even offering the ability to do a Palm Beach/Sedona trip. That compared to $232 if you returned the car to Palm Beach.

The way from the Palm Springs airport to Flagstaff where you can rent another car is : SunLine bus stop @ 3400 East Tahquita Canyon Palm Springs Amtrak bus #4985 to Fullerton. You hang out in Fullerton for about 2 hours waiting for the Southwest Chief. The Chief leaves Fullerton @ 6:35PM and arrives in Flagstaff a little after 5 AM. The fare for the bus ride and a roomette for 2 is about $304.
This is one case where you may wish that the train was running late.

I have long heard about Phoenix as a rental car nightmare. Don't know why.

For one way rentals I have successfully used autoeurope.eu several times with good success. I'm seeing a rate for a mid sized car, pick up Palm Springs, return Phoenix for 10d in Feb for ~$300 total.

I meant return to Phoenix (not Sedona) above. When I try different days I get wildly different results with various brokers. You can also try carrentals.com. autoeurope is also a great company.

It's not a Phoenix thing, it's Palm Springs. They need the cars because it's high season. You'd find the same one way drop fee from Palm Springs to any location.

Yes, it's common. It's rare when there isn't a one way drop fee. I'm surprised you haven't seen it before.

Try CostcoTravel.com. Last time we rented in San Diego and returned to L.A., we had no drop-off fee. I think it depends on demand, time of year, and cities involved.
I always find the best prices at Costco's travel site.

Do you really think if it depends on the cities involved and that city is Palm Springs that anybody is going to offer some sort of "deal?" IOW why would they?

Look at AutoSlash.com. We have gotten some amazing deals with them.

Another thought would be to have a rental car in Palm Springs, then fly from Palm Springs to Phoenix and rent a car there. I don't know if the air fare would be cheap enough to make it worth it though.