Car hire is getting more expensive, Why?

http://www.dailymail.co.uk/travel/article-1219607/Holiday-car-hire-Get-rental-details-right-avoid-chaos.html

Car hire is something many of us put off sorting out until the last minute, long after we have booked our flights and accommodation.

In previous years, this hasn’t been a problem because there have always been enough vehicles available in mainstream holiday resorts and, unlike with airline fares, rental costs haven’t really fluctuated. But this year was different.

Some holidaymakers who delayed booking their car hire in Spain until late ended up having to pay up to £400 a week for a small vehicle - that’s three or four times higher than the usual rate. Others were unable to find a car at all.
A smiling family in a convertible car

Indicate early: Book well ahead if you want to be sure of a hire car

The situation during the summer came about because car rental companies operated with smaller fleets.

Due to the recession, car manufacturers are making fewer vehicles anyway, and rental firms have been struggling to get credit from banks to purchase replacement cars.

‘This year, car rental fleets in Spain have shrunk by 35 to 40 per cent,’ says Stuart Nassos, managing director of Holiday Autos, the UK’s biggest car rental broker.

‘In Portugal, Italy and France, we’ve also seen fleet reductions of 15 to 20 per cent.’

As a result, at peak times - over Easter and during July and August - there was a shortage of cars and with demand sometimes outstripping supply, prices went through the roof. The situation in Spain was the worst.

Andrew Hillyard, of villa specialist Vintage Travel, says the firm had big problems arranging car hire close to departure dates in Minorca, Barcelona and Andalucia.

‘On several occasions,we weren’t able to supply vehicles at all,’ he says.

‘One couple who had booked a villa in inland Andalucia had to get a train from the airport to Ronda, the nearest town, then a taxi on to their property.’

He also says the company had difficulties finding suitable vehicles for clients in Portugal, Italy and Croatia. So what does the future hold?

Gareth Robinson, managing director of price-comparison website carrentals.co.uk, says the problems look set to continue at periods of peak demand this autumn and winter.

‘In winter-sun destinations such as the Canaries and Madeira, and at airports for skiing holidays such as Geneva and Chambery, at times I anticipate there will be a limited choice of vehicles and prices will be pushed up for late bookers,’ he says.

But Stuart Nassos believes that next summer is more a cause for concern.

‘It looks as if the challenging conditions may repeat themselves next summer,’ he says.

‘We’re seeing many more people booking their car now for next summer than would have been the case in previous years.’

Clearly, you’d be wise to heed his warning. There is no need to fret about availability and escalating rates in off-peak times.

However, if you’re going to Europe, and particularly Spain, in the school-holiday periods next spring or summer, then once you have arranged your flights and accommodation, I would recommend that you book your car hire, too.

From most airports, the rates are a little higher than in previous years but still reasonable.

For example, www.carrentals.co.uk is quoting around £130 for a week’s hire of an economy car from Malaga or Barcelona in early August 2010.

However, the cheapest rate the price-comparison website is quoting for a week’s rental in early August from Minorca’s Mahon airport - where Vintage Travel said problems were most acute last summer - is a whopping £277, and for a family-sized car, prices start at £300.

So you may well want to check car-hire rates before you commit to a particular destination.

Prices are currently reasonable for prime ski and winter-sun destinations, such as the Alps and Canaries, over peak travel periods, including Christmas and next February’s half-term holiday.

But the rates may well rise closer to the time: again, once you’ve sorted flights and accommodation, I would book the car hire to avoid any risk.

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