Why you should never pay for a car rental on collection – and other mistakes to avoid

hire care overlooking beach - Hugh Mitton / Alamy Stock Photo
hire care overlooking beach - Hugh Mitton / Alamy Stock Photo

Last summer saw a serious car hire crisis in many key holiday destinations. A surge in post-pandemic bookings and a collapse in the number of rental vehicles available pushed prices to record highs. At times it was impossible to book a car at any price.

Island destinations in particular, such as Mallorca, were hit hard by shortages. And some tour operators offering fly-drive packages further afield even had to suspend bookings. As early as last May, Audley Travel, for example, stopped selling self-drive summer holidays to Canada because it couldn’t source any cars.

Now there is concern that soaring demand and a continuing shortage of vehicles means that prices will climb even higher in 2023. According to Zest Car Hire – a major broker with a broad overview of the global picture – demand for this summer is already “incredibly high”. And the price comparison website Travelsupermarket says that searches for hire cars are currently 240 per cent higher than the same period in January 2022. Portugal (up 375 per cent), France (362 per cent) Greece (308 per cent) and Italy (302 per cent) are all showing especially high demand.

The problem for consumers is that this is already putting upwards pressure on prices. According to Rory Sexton, managing director of Zest, while the supply of cars has improved compared with last summer, there are still some significant shortages. And car hire suppliers are having to pay much more to replace the vehicles which were sold off during the pandemic. He cites the example of a new Fiat Panda which might have cost €13,000-14,000 in 2019, but which now costs €20,000. Furthermore, staff and insurance costs have also risen.

You can see the impact of this in our tables (see below). The first gives the average daily cost of renting a car in five popular destinations from 2019 to 2023 and, in all cases, shows a sharp rise compared with pre-pandemic prices. The biggest increase was in Florida where the cost per day has risen from £36.48 to £77.85 since 2019 – that’s a 113 per cent increase. (Though this has, at least, fallen back from a peak of £95.43 a day, which is what you would have had to pay if booking for last summer).

Prices in Tuscany have also risen substantially, more than doubling since 2019. The Algarve saw a big jump in 2022 and another rise this year – it is 47 per cent up on pre-pandemic rates. Even the more modest price increases – in Spain and Greece – are still up by 16 and 22 per cent compared with 2019, though rates on the Greek Islands have fallen back sharply for this summer compared with last.

These are averages, of course. Rates are never static and it makes a big difference both how far ahead you book, and the month you actually pick up the car. We have quoted August rates for all our comparisons because that is when most people travel, and when the price differences are most marked. Pick up a car in June and you will normally pay much less.

Our second table has a more practical use. When booking for peak season, the received wisdom is that you are better off reserving your car as far ahead as possible – both to ensure you secure one and to get the best rate. As the table shows, that proved true last year in all but one of our examples.

If you had booked your August car rental in Tuscany last January, you would have paid £46.43 a day on average. If you had left it until July, the price would have nearly doubled to £85.39. In the Algarve, the price rose from £42.35 to £59. And it was also more expensive to book late in both Greece and Spain.

The exception was Florida, where the price dropped from £95.34 to £72.27 a day. However, this does seem to have been something of an anomaly because of anxieties over a mismatch between supply and demand.

The overall lesson for this summer’s peak season is that demand is looking strong and cars may be hard to come by. Book now and you are almost certain to make significant savings.

How to avoid soaring car hire prices

Avoid peak season

Easier said than done for those travelling with children, but in May, June, September and October you will probably pay as little as a third of the price of the July/August peak.

Check and compare

Checking two or three different brokers (such as zestcarrental.com) and comparison sites (such as travelsupermarket.com) will ensure you get an idea of competitive prices, but be absolutely sure you are are looking at the bottom line costs and are comparing like with like by including all the extras (see below).

car hire kiosks at airports with queue - Chris Howes/Wild Places Photography / Alamy Stock Photo
car hire kiosks at airports with queue - Chris Howes/Wild Places Photography / Alamy Stock Photo

Book early

As our table above shows, for peak-time travel, if you book six or seven months in advance you are likely to pay less.

Pay to secure the booking

Paying a deposit – or in full – at the time of booking means you can guarantee you will be able to get the car at the price you have booked. Last summer, some renters who had booked in advance with payment due on collection, had their rentals cancelled by cynical suppliers who knew that they could sell cars at higher prices to drop-in customers.

Check the cancellation policy

Some suppliers allow you to cancel without penalty, which is worth considering even if it means paying a slight premium on the rate. Apart from anything else, it means you can benefit from lower prices by booking further in advance and without worrying about the consequences of a change in plan. Or you can cancel and rebook if prices fall.

How not to get caught out by extras

1. Check the Collision Damage Waiver (CDW) and theft protection excesses. Most are now very high – €1,000 is typical – so take out additional cover in advance of collecting the car. Most car hire companies sell some sort of policy either to reimburse the excess or reduce it to zero, through independent insurers like reducemyexcess.co.uk, insurance4carhire.com or icarhireinsurance.com.

2. Make sure your credit card limit is high enough to leave enough deposit to cover the excess and that it is in the name of the person on the hire booking form. Debit cards are not accepted.

3. If your flight is significantly delayed, let the rental office know – otherwise your reservation may be cancelled. Cars may be held for only two hours.

4. On collection, question anything you don’t understand on the contract, and check nothing has been added to the amount you agreed to pay.

5. Inspect the car to check that every scratch or dent on the bodywork is marked on the contract. Take photographs of all four sides of the car – and also the milometer.

6. Check the fuel policy – the best is when you collect a car with a full tank and return it in the same state. Keep the receipt from the petrol station where you filled up before returning the car.

7. If the vehicle is not inspected and signed off on return, take a new set of photographs to record its condition.