When budgeting for travel, don't assume that lodging and airfare will be your biggest expenses. Now, more than ever, rental cars are becoming one of the biggest and stubbornly expensive aspects of people's vacation budgets.
Airfare and hotel prices are certainly near all-time highs, but car rentals are one of the biggest increases in all travel costs. Comparing prices in July 2022 and July 2019 (the last normal summer before the pandemic), according to the latest set of consumer price index data released in August 2022, hotel prices were 7 % is up. Airfares are up 16%. However, rental cars have increased by a whopping 48%.
When did car rental prices become so expensive?
Like most travel costs, rental car prices plummeted in April and May 2020 as people started canceling vacations to stay home. However, things started to turn around in early 2021 when prices began to rise monthly and hit a record high in July 2021.
Road trips were particularly hot that summer (hence high demand), but global semiconductor shortages and tourism Other factors, such as labor shortages, contributed to the shortage.In fact, an analysis of the US Travel Association's Bureau of Labor Statistics data shows that employment in the leisure and hospitality sector is 7.8% below pre-pandemic levels. .
Prices have fallen slightly from their July 2021 record, but are still well above pre-pandemic prices.
How to Find Affordable Rental Cars
NerdWallet analyzed 360 rental car bookings to better understand how to find the cheapest rental cars. Some of our findings may help you save on your next rental car.
Among the car rental companies analyzed, Enterprise is usually the cheapest and National is the most expensive. Our analysis also found that last-minute rentals are usually cheaper than those booked months in advance. And in most cases, you'll save by booking at an off-site car rental location rather than at the airport.
That knowledge will help you better understand the cheapest places to book
Use Travel Credit Cards: Some travel credit cards offer special benefits. Some offer car rental insurance, but some countries may exclude certain types of expensive cars and rentals. However, if applicable, it will save you the cost of additional insurance that you may have signed up for at the counter.
Join the Car Loyalty Program: Benefits vary by Elite status level, and some levels may include free upgrades and fee waivers. You can also get your status automatically through your credit card. But even the entry-level free-to-join tier can include perks such as priority lines.
Book now and pay at the counter: Many car rental companies offer the option to pay at the counter. It offers. Paying on pickup has two major advantages over prepaying. First, if you need to cancel your trip, you don't have to pay for it anyway, which saves you the headache of trying to get a refund. Second, if the rate drops, you can always cancel and rebook at a lower rate.
Ways to save money on road trips
With gas prices highroad trips may be one of the most expensive ways to travel This day. Here are some ways to cut costs.
— Use apps to find cheap gas: Apps like GasBuddy track local gas prices and help you find the cheapest gas stations along your route.
— Consider an electric car: With an electric car, you won't have to pay full gas bills. Charges may still apply, but some hotels offer free electric vehicle charging as a guest benefit.
— Plan a Budget-Friendly Route: If location doesn't matter, consider driving to states with lower gas prices. His three states with the lowest gas prices in the last week of July were Georgia, South Carolina and Texas, according to AAA data.
Why you should start planning your trip with the price of a rental car
Before you indulge in the excitement of a road trip, see if you can afford it. Prices are significantly higher than they were two years ago, so be on your guard. Don't book flights or hotels until you've compared car rental prices and included them in your travel budget.
This article was provided to his Associated Press by personal finance website NerdWallet. Sally French is a writer for NerdWallet.
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