US Car Hire Prices Soar

Despite the drop in demand for car rentals, prices for hire cars are on the increase in the US.

The higher rates are due to a reduction in car hire company’s fleets, and ultimately the reduced amount of cars is being passed onto the consumer.

According to the weekly price index, the average daily cost of a midsized rental car a week in advance costs $103 on August 24th, up by 36 percent compared to the same time last year.   Smaller cars rented for a week cost $322, up by 36 percent from $236 at the same time last year.

The weekly index does not take into account rental cars that are tied to annual negotiate contracts, as corporate customers have more buying power and the rates have remained relatively stable over the past year.

For many wanting to hire a car, the prices have come as a shock.

Nancy Walters, who owns a small business in San Diego, went shopping for a midsize car and found prices quoted by the major brands to be too high, but chose the lesser-known brand, EZ Rent-A-Car.

The rate from EZ Rent-A-Car was $187 for two days from Dallas/Fort Worth International.

Car hire companies have been able to raise rates by purchasing less cars, a total of 530,500 vehicles in the first half of this year down from 870,000 in the first half of 2008.

However chief marketing manager for Hertz said that rates were up from last year, but claims that the figures quoted by the price index were higher than reality, saying that prices were up 3.5 percent in the second quarter of this year.