MADRID – The car rental sector is entering summer with a shortage of vehicles and with more demand than supply. That “will affect the tourist experience” when renting a car on holiday.
This is what Juan Luis Barahona, President of the National Federation of car rental FENEVAL assures. He warns that the situation will “have repercussions on the tourism experience”, especially on the islands.
The president of the federation emphasises that demand in 2022 will be higher than last year and that there will be much fewer cars. According to data from FENEVAL, car rental companies in Spain normally offer around 820,000 cars for renting. This summer there are about 500,000. That’s 40% less.
During the pandemic, many rental car companies were forced to sell part of their fleet to survive. Now the return of tourists and with it the demand for rental cars coincides with the crisis and the car manufacturers’ difficulties in producing. This has led to significant delays in the delivery of new cars to customers. In addition, FENEVAL believes that manufacturers give priority to the supply of cars to private individuals.
Rising prices and search for solutions
As a direct result, prices continue to rise and companies look for strategies to expand their automotive offerings. For example, used vehicles are bought, even imported ones, and cars with significantly higher mileage than usual are used. Companies are also starting to offer motorcycles and mopeds to compensate for the lack of a fleet.
Barahona points out that “more than 50% of global turnover” is concentrated in this sector between May and September. Some companies in tourist areas even achieve 70% of turnover during that period because of “peak demand”.
Summer car rental is up to 350% more expensive than last year
Besides the fact that according to FENEVAL renting a car this summer is on average 350% more expensive than in the last summer before the pandemic, it is also practically impossible to rent a car ‘last minute’.
The problems are also reported by AESVA, the association of car rental companies in Andalucia. Their fleet has even been “cut by half” due to semiconductor supply issues.
The supply of new cars will not return to ‘normal’ until the end of 2023
The production of TSMC and Samsung, the two main producers of these chips, “is not enough to meet the high demand”, emphasises the logistics expert and professor of economics at the Open University of Catalonia (UOC), Cristian Castillo. According to him, the supply of new vehicles will not return to normal until the end of 2023. “If there is no stock and we cannot produce, the market raises prices. We see increases of up to 300% in sectors with high seasonality, such as car rental in Spain.
If you look at the rates of major car rental companies such as Avis or Europcar, you will notice an unparalleled price increase. According to Bloomberg, rental car rates are up 143% in 2021 compared to the same month in 2019.
As an example, Bloomberg cited the €880 increase paid last year for the rental of a Volkswagen Polo from Europcar in the last week of July in Palma de Mallorca. This summer will cost €1018.26 per week (€145.47 per day).
Before the pandemic, you could rent a small car in the Balearic Islands for just under €50 per day. Now the cheapest car in July starts at Avis at €164 for the Renault Zoe and €205 for the Toyota Aygo. Exorbitant prices are very similar to Europcar in Madrid and Hertz in Barcelona for example for this summer. On a long weekend, celebrating major events, special dates or in August, “a car can cost you 350% more there,” AEVAC reports in Consumidorglobal.com.
In general, rental cars cost between 15% and 20% more than last summer. “Prices will never be the same as before the pandemic,” added Ana María García, president of Aesva.
The sector warns customers to rent a car as early as possible. Waiting until a later moment is not a good idea because there are almost no cars available last minute unless you are lucky and a car rental is lost.
Where in Spain are the cheapest cars for rent?
Rastreator compared the cheapest and most expensive places to rent a car in Spain in early June. The cheapest destination in Spain to rent a car for a day is Tudela, in the province of Navarra (average €39.16), in second place Alcorcón in Madrid (€46.54), closely followed by Lugo ( €48.54), Talavera in the province of Toledo (€49.78) and Palencia (€49.84). Cáceres (€57.71), Vitoria (€58.34), Zaragoza (€61.21), Burgos (€63.89), Fuengirola (€64.61).
Fuengirola stands out on this list. That city is located in the middle of the popular and touristic Costa del Sol. It is therefore recommended for people who want to spend their holidays on the Costa del Sol to look beyond renting a car at Málaga airport.
Highest prices for renting a car in Spain
The places where the price for a day’s car rental is highest are diverse. In general, it is more expensive the more touristic the destinations. Granada is the most expensive city to rent a car, in second place is Santi Petri (Cádiz, on the Costa de la Luz), followed by Valencia, Formentera, Figueres, León, Cádiz, Elche, Avilés and Mahón (Menorca ).