Summer holidays overseas should be cheaper this year as the cost of car hire has fallen by more than 40 per cent over the past year to almost the same price as before the pandemic, This is Money exclusive.
The cost of school holidays has gone through the roof in the past two years, with the price of a compact family car rental in the most popular summer destination averaging £652 for just one week in 2022.
However, prices in the same 12 locations have been set back to £380 per week for this summer, which is only £70 higher than in 2019, data shared with iCarhireinsurance.com.
The reason for the drop in prices is the availability of new cars that have allowed rental companies to replenish their fleets after a shortage of vehicles seen for months after the pandemic.
The average cost of renting a family car for a week in the 12 popular holiday destinations (listed above) has fallen by 27% year-on-year and is almost down to pre-pandemic prices. And mainly because rental companies can replenish their fleets with new models
A study of car rental costs worldwide found that renting a car for a week this summer is 27 percent cheaper than in 2023 and 42 percent less than in 2022.
The average holiday price faced last summer was £520 for a week’s rent, which is 68 per cent higher than what was paid before the pandemic.
This summer, the price is only 23 percent higher than five years ago (£310 in 2019), the study found.
The car rental excess insurance provider examined the cost of a week’s rental from July 27 to August 3, 2024 in 12 popular travel destinations using average prices from six popular rental providers: Avis, Budget, Enterprise, Europcar, Hertz and Sixt.
The 12 travel locations used for the study are Barcelona (Spain), Crete (Greece), Dalaman (Turkey), Dubrovnik (Croatia), Faro (Portugal), Florida (USA), Geneva (Switzerland), London (UK), Milan ( Italy), Munich (Germany), Nice (France), and Sydney (Australia).
The investigation found that Australia (£297), Spain (£306), Germany (£311) and Turkey (£360) are the cheapest places to rent a car this summer.
In contrast, Italy (£446), Switzerland (£460) and France (£523) were found to be the most expensive.
Car rental costs down: Exclusive data shared with This is Money shows that renting a car for a week this summer is 42% less than in 2022
The study looked at the prices of family cars from six rental companies – Avis, Budget, Enterprise, Europcar, Hertz and Sixt – in 12 popular European destinations this summer, comparing costs in the same week in 2019, 2022 and 2023
The location with the biggest year-on-year decline was Sydney, down 46 per cent.
Barcelona (down 29 percent), Milan (down 28 percent) and Faro (down 28 percent) are also cheaper to rent a vehicle than last year.
In terms of the smallest decline in the last 12 months, prices for car rental in Florida and Nice only dropped 10 per cent and 13 per cent.
Foreign visitors to London can expect to pay 37 per cent less to hire a car this summer compared to last, with a compact family car for a week costing £366 (down from £577 in 2023).
Foreign visitors to London can expect to pay more than a third less to hire a car this summer compared to last, with the average compact family car (like the one pictured here) costing £366 a week.
And tourists can make better deals because they wait closer to their desired time.
Ben Wooltorton at iCarhireinsurance.com, said: ‘Great to see car hire prices almost back to 2019 levels.
‘Renting a car is a good option for people who want to explore holiday destinations and it is good to see that prices are stabilizing again after the high costs that have been seen since the pandemic.
‘However, there may be offers closer to the summer, so it’s worth checking closer to your holiday and take advantage of the free cancellation 48 hours before the collection offered by the big companies.’
Explained: Why the cost of renting a car has increased in previous years
A major car rental provider has benefited from vehicle production returning to full capacity due to a shortage of components over the past three years that has led to a reduction in the supply of new cars.
The cost of renting a vehicle is increasing rapidly due to Covid.
This is because rental companies are selling their fleet of vehicles to keep them afloat in 2020 when demand hits rock bottom as flights stop and people can’t travel abroad..
However, when restrictions are eased and travel is allowed again, car rental companies are unable to replenish stocks due to reduced production of new vehicles.
This is the result of a shortage of semiconductors that has continued to devastate the car manufacturing sector for months, forcing many automakers to reduce shift patterns, pause assembly lines and even close for a while due to the lack of computer chips needed to enter the latest. models.
But now that automakers are back to full production capacity, rental companies have been able to convert their vehicle fleets to pre-Covid norms.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, explained: ‘After two years of Covid, component shortages and production constraints, the supply of new vehicles is generally returning to normal with reduced delivery lead times.’
Iain Reid, editor-in-chief at car buying and selling platform Carwow, said there were also positive signs for rental fleets to increase stock.
‘Our own data shows lead times for brands will drop from where they were a year ago.
On average, lead times increased by 25 percent for electric cars and 5 percent for gasoline cars, with the average lead time for EVs falling from 7 weeks in June 2023 to 5.3, and for new gasoline and diesel models, ie. now 5.7 weeks down from 6.
‘The fact that lead times are down – whether it’s down to increased production capacity, a stable supply chain for key components, higher inventory levels or a combination of various factors – indicates a return to full production capacity, and it seems that the car rental market is getting the most benefit.
‘Because, as new registration figures show, it’s the fleet and the business sector that are driving new car sales in the UK. If car manufacturers have the capacity, it’s no surprise that they will push these new cars to large fleet buyers such as car rental companies who are in high demand.’
Travelers should watch out for expensive rental car additions
Although the price of the main rental has decreased, one area that still has a significant cost is the optional extras offered at the rental desk, including car rental excess protection (often referred to as theft and collision damage cover).
That’s around £168 in just one week, the study found.
Excess protection is usually imposed on drivers at the rental desk, guaranteeing that vacationers do not need to pay greater liability, which is the amount that the driver must pay if the rented car is stolen or damaged, even if it is not the driver. miss.
The average cost to hire a child car seat for a week in a popular summer holiday destination is £67, says iCarhireinsurance
Covers for tires and windscreens also cost an average of £33 a week, the study found.
Travelers are advised to save money by purchasing this type of cover from specialist providers.
For example, iCarhireinsurance.com, which costs from £ 33.15 to cover damage, theft, and tires and windshield for a week in European destinations, which is a sixth of the price quoted by the main rental companies for this summer (£ 168 excess protection and £ 33 tire and windshield cover , amounting to £201).
And there’s even the added cost of a rental car that can add to the cost of your vacation.
Extra protection and benefits, including adding another driver to the policy (£64), sat nav hire (£71) and child seat hire (£67), mean drivers can pay up to an extra £403 over seven days. summer vacation.
‘Don’t get caught out buying extra expensive at the rental desk and make sure you bring sat nav and child car seat with you and consider buying a car hire excess insurance from a specialist insurance provider,’ Ben told us.
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