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Holiday hire cars in 2023 – a tale of soaring costs but surprising bargains
Research has revealed price rises of between 59 and 158 per cent since 2019 in key holiday destinations – here’s how to keep costs low
Planning to hire a car this summer? The bad news is that prices are still much higher than they were before the pandemic. And they are especially high during July and August. But there is a silver lining. In some destinations peak season prices have fallen back a little compared with last year. And – if you are able to travel in June – you can find some competitive rates at some European airports over the next few weeks before the schools break up.
As our table (below) shows, the average daily rate in August for a hire car in ten key destinations has risen between 59 and 158 per cent since summer 2019, with especially high rises in Alicante (where daily rates have increased from £17.23 to £44.51), Pisa (up from £28.16 to £67.22) and Crete (from £32.75 to £68.39). The lowest rises overall were in Malaga, Nice, Faro and Ibiza – all airports where rates shot up in 2019, but have eased significantly since last season’s peak. (Daily averages are the best way to make overall cost comparisons, though bookings are normally made for one or two weeks at a time).
So, what is happening and how can you avoid the worst of the price rises? According to Rory Sexton of the broker, Zest, the market is rebalancing after a big mismatch between supply and demand last year. Then hire companies were short of cars – they had sold vehicles during the pandemic and couldn’t buy replacements fast enough. Now they have restocked, although – according to Sexton – they have had to pay around 40 per cent more for each new car than they did in 2019. Demand is up too. The price comparison site, Travelsupermarket, says that searches for car hire have increased about nine percent this year over last, and booking numbers have risen 21 percent. This means that, overall, rates have stayed high compared with four years ago.
But in some destinations, notably Malaga and also Faro, where there are lots of hire companies and competition is especially fierce, prices have fallen back.
This is particularly the case for rentals in June. I did a spot check on hire costs for an Opel Corsa for a week departing June 10. In Malaga, you can bag a car for just £63 – about a third of the August price, in Heraklion it was £134 and in Majorca, it was £135. In Pisa, however, where, according to Travelsupermarket bookings are up 17 per cent so far this year, rates remain stubbornly high. You’ll have to pay about £400 for a similar car here in June.
Don’t assume however that, in the cheaper destinations at least, prices will fall back significantly after the summer peak. According to Zest, average prices in September are already significantly higher than they are in June and demand has soared by 67 percent compared with the same month last year. A spot check in Malaga produced a quote for £171 for an Opel Corsa; that’s nearly three times the June price and only £18 cheaper than for an August week.
So, how do you navigate around the new reality of inconsistent pricing and high rates? First, beware that the long-standing issues that have been plaguing car hire for so many years – high-pressure sales of over-priced insurance at the pick-up desk, expensive extras, and unexpected charges for damage – continue to be a problem. You need to be savvy and determined on that score.
How to keep car hire costs down this summer
Avoid peak season
Assuming you have a choice and aren’t tied to school holidays, you will find rates are significantly lower in June, September and October than in July and August.
Compare prices
Rates for the same car booked with different outlets in the same destination can vary hugely. Usually, you will get the most competitive rates through brokers, which negotiate the best deals they can with the different big-name suppliers. Which? rates Zest (zestcarrental.com) as “the standout broker” with Auto Europe (autoeurope.co.uk) rated next best of the six surveyed. It also rates two Canary Island specialists autoreisen.com and cicar.com exceptionally highly.
Be alert to the extras
When comparing prices, don’t get distracted by the headline figure – be sure you are comparing like with like and have included all the extras in the final price. See further advice on avoiding extra fees below.
Don’t delay
Booking early – especially for peak dates – is key. Typically people book only a couple of weeks or so before departure – get in well before that if possible. Come good late deals in June this year are an exception to the rule. You can avoid missing out on these through free-cancellation deals…
Check the cancellation policy
As a legacy of the pandemic, some companies and brokers now allow you to cancel without penalty. This means that you can book a long way in advance, safe in the knowledge that you are locking in a competitive rate, but can cancel if your plans change.
Pay to secure the booking
By contrast to the above, deposit-free bookings can be risky. You may be vulnerable to an unscrupulous hire company cancelling or trying to increase the price at the last minute because rates have risen since you booked. By paying a deposit you will be able to guarantee that you will be able to get the car at the price you have booked.