Traveling This Holiday Season? Be Prepared for Higher Rental Car Prices

In the early days of the pandemic, while most of the country was still in lockdown, it became almost impossible to buy a car—dealerships' inventories were cleared out almost overnight, and upstart car companies like Carvana surged in popularity. Now, prices for rental cars have gone through the roof, and Americans are eager to hit the road and explore close to home.

The surge in used car buying caused many rental companies to sell off excess inventory due to a lack of travel, but now the cost-cutting measure has resulted in not enough cars to satisfy demand—the result: sky-high pricing on car rentals across the U.S. and Canada.  Online travel agency KAYAK has already warned that holiday demand is up 230 percent compared with pre-pandemic levels, with the average cost per day increasing 75 percent since 2019.

Not exactly great news if you need to rent a car—but let's say you have no choice. Here's your game plan for scoring a good deal on a rental car this fall and winter.

First of all, the destination matters. Are you traveling to Hawaii this winter? Good luck, if so, as rental cars across the state are demanding the highest prices in the country. California, meanwhile, is home to some of the cheapest rentals around. For example, Burbank's average price of $68 is 36 percent less than the national average.

Location aside, savvy timing seems to be the best way to avoid facing an expensive rental. Travel expert Mitch Krayton of Krayton Travel says being ahead of the game is critical. "Book all rental cars well in advance, especially if you are renting a car outside of the lower 48 states," he told TripSavvy. "Renting the car in the U.S. with U.S. dollars will be much cheaper than if you purchase a rental car at your destination."

Krayton also emphasized the benefits of using a travel advisor, who will have access to rental car companies in every country. "Online booking sites are an intermediary, and they will take your money, but there is no guarantee your reservations will be there for you, or the car you wanted will be held," he explained. "They will always refer you back to the website, and good luck finding a human to help while you are standing upset and frustrated."

Of course, as demand continues to skyrocket, you may just have to do the best you can. Mark Mannell of CarRentalSavers.com told TripSavvy that while it may be harder to negotiate a lower price on a rental car this holiday season, there are other ways to ensure you get the best rates.

"Book a non-prepaid rental as soon as possible, then keep checking rates," Mannell said. "If you find a better rate, you can rebook then cancel your previous reservation."

Other tips he says to consider are to consult multiple rental agencies, as prices can vary considerably between different companies. He also says to check airport and off-airport rates.  During the holidays, off-airport rates can be lower.

Most importantly, Mannell also urges customers to be prepared when they arrive at their destination. "Have a copy of your reservation, know if you need insurance or a toll pass," he said. "Add-ons can be very expensive."