Where--and where not--to put the pedal to the metal.
Some trips don’t require a car, while others practically demand it. Whether due to a lack of adequate public transportation or must-visit, off-the-beaten path spots on your itinerary, certain destinations are enhanced when you have a vehicle at your disposal. It’s a form of freedom.
And yet, renting a car is also another travel expense on top of all the other trip-related expenses like airfare, accommodations, meals, and excursions.
Depending on where your travels take you, the cost of renting a car for a week or a few days can result in sticker shock. On the other hand, taking to the open road in certain places is surprisingly inexpensive.
The cost of renting a car is all about supply and demand. Ludwig Schoenack, a travel industry veteran and co-founder of Kyte, a company that brings the rental car to you, says simply, “Prices are high where demand is high.”
Schoenack says the demand for summer travel in general “is incredibly strong, unlike anything we’ve seen since before the pandemic.”
A part of this demand is evidenced in the rental car market, which Kayla Inserra, Kayak’s consumer travel trends expert, tells Fodor’s “have been a hot commodity the last two years.”
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Covid Hangover
Rental car costs skyrocketed during the peak of the pandemic. A shortage of rental cars, many of which became a part of the used car market as demand for car ownership increased, led to high prices all around.
According to a Nerd Wallet analysis, car rental costs aren’t as high as they were at their peak in the summer of 2021, but they are still notably higher than they were pre-pandemic.
Kayak’s summer 2023 travel trends notes a decrease in rental car pricing from 2022. Overall, daily car rental is actually down 13% this year. Schoenack points to car rental companies rebuilding their fleets since they were decimated during peak Covid as a potential aid in helping meet the demand they’re seeing.
Inserra agrees: “The car shortage is finally declining and rental car companies have plenty of inventory making the overall process of renting a car this summer more accessible and affordable.”
Surprising Deals—and Bank Breakers
Summer is the most expensive season to rent a car in the U.S., Schoenack tells Fodor’s. Summer travel that coincides with a holiday such as the 4th of July or Labor Day is bound to drive prices up further due to increased demand.
A recent Skyscanner study found that renting a car was on the pricier side in such places as Toledo, Ohio; Boise, Idaho; and Fort Worth, Texas; and cheaper in Seattle, Washington; Portland, Oregon; and Tampa, Florida. Florida, in fact, is one of the cheapest places in the country to rent a car, says Kayak’s Inserra. If these highs and lows are head-scratching, remember, it all comes down to supply and demand.
In places where you really need a car to get around if you actually want to see stuff beyond your hotel or Airbnb, it’s going to be more expensive than cities with subways and reliable bus routes.
More remote locations tend not to have public transportation as a viable option, making renting a car not so much a “nice to have” but an essential component of the trip. “Outdoorsy destinations where rental cars are needed and in high demand typically come with higher price tags,” confirms Inserra. That is, if you’ve flown to Alaska or Hawaii and plan to venture out, you’re going to need a car.
Avis didn’t respond to a request for comment on rental costs around the globe, and Hertz says they don’t provide data on pricing, but according to Kayak’s data on pricing, the most expensive destinations in the U.S. to rent a car include Anchorage, Alaska ($206 per day); Kalispell, Montana ($171 per day); and Jackson, Wyoming ($122 per day). Internationally, Zurich, Switzerland ($121 per day) and Reykjavik, Iceland ($117 per day) top the list of most expensive cities to rent a car. Edinburgh, Scotland ($116 per day) ranks third.
Last year, a comparison website for insurance, Confused.com, revealed Iceland as the most expensive place in the world to rent a car (and fill up the tank).
New Zealand, Australia, and Israel were not far behind, according to Confused.com as reported by Auto Rental News. Wallet-friendly international car rental can be found in Thailand, Azerbaijan, and Lebanon, according to the report.
Related: 10 Cities Will Be Slammed as European Travel Expected to Grow 55% This Summer
How to Save
Inserra says Kayak’s data has shown an 8% decrease in car rental costs when the car is picked up at a location other than the airport.
Schoenack agrees that going to a rental car company’s location outside of the airport is one way to bring the overall cost down. “Being flexible about your dates and avoiding holiday times can help,” he adds.
Schoenack also recommends booking in advance while Inserra suggests setting up a price alert the same way you may be accustomed to doing for flights.
If your travels—and car renting—are taking you abroad, make sure you have everything you need to rent a vehicle in an international destination since many countries require an International Driving Permit (IDP) which typically must be obtained from the DMV in advance (AAA members can get it at a AAA location). For example, in order to rent a car in Japan, you must show an IDP and be 18 years of age. In Finland, however, drivers must be 20 years old and have a valid driver’s license, but it’s not necessary to obtain an IDP before arrival.