Tuesday, May 28, 2024

Rental car companies across U.S. struggle to replace diminished fleets

by BIZ Magazine

Elyse Kelly | The Center Square

The country is opening up and travel is increasing, but visitors are finding the rental car landscape a bit empty.

Rental car companies are continuing to have a hard time keeping up with demand after selling off fleets to stay afloat during the pandemic.

“The fundamental thing that’s causing it is the very rational corporate response to the pandemic and the almost shutting down of international and domestic travel for most of 2020 and the first half of 2021,” Gregory Scott, spokesperson for the American Car Rental Association (ACRA), told The Center Square. “Airport rentals dropped 70-90% in March and April of last year, and as a result there were literally tens of thousands of vehicles sitting unrented and unwanted because people stopped traveling.”

Two national companies, Hertz and Advantage, filed for bankruptcy last year.

Car rental companies couldn’t afford to keep making payments on fleets of cars that weren’t making any money, Scott said, so they sold them.

Enter the second problem: supply chain disruption.

Travel is increasing, but companies can’t find the cars to replace the ones they sold.

“Supply is definitely tight,” Scott said. “The companies that belong to ACRA are trying to replace their fleets, however, there’s a problem with production of new cars in this country and elsewhere where new cars simply aren’t as available as they were before the pandemic.”

A global semiconductor shortage has caused new cars to become scarce and used cars, the next best option, are disappearing as well.

“I was driving by a car dealership the other day and looked in as I was sitting at a light and saw almost no new cars on their lot. There was actually a truck unloading cars, and it seemed as though as soon as a car was unloaded it had a buyer sitting there – they may have been waiting for it for a couple weeks,” he said. “But there simply aren’t new cars available retail right now, let alone for fleet purchases.”

Scott said he’s heard of some companies going into the used car market to purchase late model vehicles to flesh out their fleets to meet demand.

For those looking to rent a car, Scott says there’s a few things they can do to work around the shortage.

“Get their reservation done early,” he said. “If they’re not able to find the supply they’re looking for, let’s say, in an airport location, then be flexible in terms of perhaps renting in a downtown location.”

If travelers make their reservations early, Scott says, companies should have the cars available.

“For now, the days of making a car rental last minute won’t be as easy or as wise a decision,” he said.

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