Holiday car hire prices plummet as vehicle shortages ease

Car hire prices have fallen sharply in many popular holiday destinations this year as vehicle shortages ease, according to a new report.

Average weekly prices for the Easter holiday period are lower compared with 12 months earlier in 11 out of 13 destinations analysed by consumer group Which?.

The largest decrease was recorded in Funchal on Portugal’s Madeira islands, with the average cost down £146, from £412 to £266.

This was followed by Palma on Spain’s Majorca island (down £92, from £319 to £227) and the US city of Orlando (down £82, from £455 to £373).

Other destinations where prices have fallen include the Greek island of Corfu, Faro in Portugal’s Algarve region, and Italy’s Pisa.

Average prices are also down in nine of the 13 locations analysed for the summer holiday period, led by Greece’s Rhodes (down £160, from £419 to £259) and Funchal (down £146, from £496 to £350).

Car hire prices reached record levels last year after supply chain issues limited the production of new cars, making it harder for rental companies to replenish stocks to keep up with high demand for travel after the lifting of coronavirus restrictions.

Which? said hire companies are also more likely to hold onto older stock for longer as “the brakes have been put on the used car market”, creating an “oversupply of vehicles” leading to cheaper prices for holidaymakers.

The consumer group stated that this year’s drop in car hire prices is “positive” but noted they remain far higher than before the pandemic.

Compared with 2019, Easter prices are 51% more expensive, while summer prices are 53% higher.

Naomi Leach, deputy editor of magazine Which? Travel, said: “While it’s encouraging to see car rental prices finally starting to ease after the sky-high rates of the last few years, travellers should nonetheless be cautious if they’re quoted a rock-bottom price that sounds too good to be true.

“Even when prices are low, the worst companies might still employ dodgy tactics like adding on unfair fees or pressuring you to purchase extras that you don’t need.

“Book with a reputable company or use a trusted broker to ensure you’re getting a fair deal.”

Which? examined data provided by car hire broker Zest Rental for more than 3,000 airport bookings for Easter and summer last year and this year, made in the previous January.