If you’re planning on traveling over this Memorial Day weekend and you need a rental car, be prepared. Rental car prices are through the roof. Like crazy high. Some rental car companies are charging over $1,000 for a few days of rental. What’s going on?

Why are rental car prices so high right now?

Well, a lot as it happens. There are many loose ends that have tied together to make rental car prices soar. It’s a perfect storm of bad circumstances mostly due to COVID-19. But not all of it can be blamed on that. 

First, domestic travel is really picking up. We’ve all been through this thing called a pandemic. You know, right? Now that it has been tamed, people want the hell out. Bookings are through the roof as is demand. 

A lot of the price hikes are from COVID-19, but not all

So there is all of that. But also, with the rental car business decimated due to COVID-19, many had to sell off large parts of their fleets to barely survive. Now, there is a need for replacements that aren’t available. That’s because of the combination of COVID-19 shutdowns last year and Microchip shutdowns this year. Production of vehicles from around the world has been affected.

Many people are paying above the manufacturer’s suggested price to get a new vehicle. Rental companies usually buy in bulk that includes discounts. Some are even owned by vehicle manufacturers. But none of that takes preference over buyers willing to pay more than retail. 

Rental car companies are competing with retail buyers for new cars

So rental car companies can’t get new cars to bulk up their fleets. Some are even resorting to buying used cars off of dealer’s lots just to try and keep up with the flood of demand. It is just a crazy time in the rental business. 

In places like Florida, Phoenix, Las Vegas, and Hawaii, prices are up to $200 a day according to ABC News. That number could go up. And it is expected to be like this through summer. So if you’re thinking about postponing because of rental car prices you might have to wait until the end of the year. 

If you’re renting a car here are some suggestions

Experts suggest you do these things to get the best rate you can. Book your car as far in advance as possible. If your rental company has a loyalty program, sign up for it. You can avoid some of the long lines people are finding at airport rental desks. 

If you can use the “pay later” option you can always cancel if you find a better rate later on. There are sites like AutoSlash that can find the best rates. Be aware that if you cancel with one of these sites you may still be responsible for some or all of the rental charge even though you’ve canceled.