Rental car prices have skyrocketed, leading to widespread dissatisfaction among travelers. Three years ago, securing a rental vehicle for as little as $30 per day was commonplace.
Today, however, finding a compact or economy car for under $60 per day is rare, while family-friendly vehicles often exceed $100 daily.
The pandemic had a profound impact on the rental car industry in 2020, drastically reducing travel and forcing many companies to sell off portions of their fleets to survive. As travel resumes, there is a surge in bookings as people seek to make up for lost time.
This surge in demand has not been met with an increase in vehicle availability, creating a classic supply and demand issue. The surviving rental companies are now raising prices to recover from the revenue losses incurred during the lockdown.
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This situation can also affect your insurance coverage. Many individuals opt for “rental reimbursement” coverage in their auto insurance policies, which provides a daily amount, typically up to $30-40, for renting a vehicle if their own car is damaged.
While this coverage was adequate in the past, it now falls short of the current rental rates. Compounding this issue, repair times have lengthened due to a shortage of auto parts, which means you may face both higher daily costs and longer rental periods.
The silver lining is that adjusting your policy is a straightforward and relatively inexpensive process. Should you require a rental car while yours is being repaired, reaching out to your insurance agent to discuss your options is advisable.
If you already have rental reimbursement coverage, reviewing your limits and comparing them to local rental prices can help ensure you are adequately protected.