Sarah Street of Enterprise Rent-A-Car goes over the rental contract with Joe Sanford of Huntsville, Ala., at the rental car lot at the Detroit Metropolitan Airport in Romulus, Mich., in this file photo.
(Carlos Osorio/AP Photo)More Photos
Travelers have been able to score decent deals on hotel rooms and airfares over the last year. But car rental prices have increased dramatically despite the weak economy.
"It's the one area of the travel industry where you have not been able to get a break," said Nina Willdorf, editor-in-chief of Budget Travel magazine, which plans a story about car rentals for its December-January issue.
Compared with a year ago, rental prices increased nearly 50 percent on daily rates for midsize cars booked a week in advance, according to the Abrams Travel Data Rate Index, which tracks major car rental brands. The Abrams Index found an average daily rate of $93.06 on the fourth Monday in October this year, compared to $64.56 on the same day a year earlier.
Prices were also up more than 50 percent for a compact car booked a week in advance, with an average weekly rate of $289.14 on the fourth Monday of October, compared to $188.46 on the same day in 2008, according to the Abrams index.
"Why do they charge these rates? Because they can get them," said Neil Abrams, president of the Abrams Consulting Group in Purchase, N.Y.
He said car rental companies responded differently to the weak economy than hotels and airlines. "When you have a 30-story hotel and demand falls 20 percent or more, you can't lop off some of the floors, but you can reduce prices," he said. "And it takes airlines months to shut down routes and get planes out of service. But the ability of a rental company to scale down a fleet of cars is much more nimble."
Car rental companies have cut the number of new cars they buy for rental fleets 25 to 50 percent, Abrams said. Demand for cars is down, too, but reduced supply is what really drives rates up, he said.
So to get the best rates possible, consumers need to do their homework. Here are some tips:
—Look for discounts. "There are hundreds of membership programs and professional associations that offer discounts," said Paula Lyons, who lists 350 discount codes for eight car rental companies on her Web site, http://www.Best-Car-Rental-Tips.com.
