Car rental shortage trends: here are alternatives for holiday travel

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Nearly every day, there is a new story of a supply chain issue affecting a product. Rental cars are one of the many items impacted by the perfect storm caused by the pandemic and shifting consumer demand. These factors have significantly reduced the number of vehicles available to rent, which could also lead to your holiday travel plans being impacted.

Last year’s holiday season travel plans were severely disrupted by COVID-19, with many families unable to come together to celebrate. This year, more people are excited to get together with their loved ones. With the car rental shortage in full swing, you should be aware of the potential challenges lying ahead and know what you can do to avoid further delays in visiting friends and family.

Car rental companies are at a loss

Due to more than just one factor, rental car availability is currently low. When the pandemic first hit, many companies scrambled to sell off their inventory to cover lost revenue from a lack of travel. It was a quick solution to stop the bleeding of revenue since demand had come to a screeching halt and no one could predict how long it would last. Another impact to the rental industry is caused by the same chip shortage affecting the production of new cars, which lessens the number of vehicles rental car companies have on their lots. When the demand came roaring back in 2021 (although not to pre-pandemic levels), there were few cars available to replenish the diminished fleets.

Additionally, the rental car industry is dealing with a similar worker shortage as felt across many retail outlets now. With a lack of workers, low inventory and a surge in demand, it will likely be a while before any significant relief is offered to consumers.

Car-sharing alternatives

The car rental crisis may continue to last for months, but fortunately there are other options for travelers. One of the biggest opportunities is to use a car-sharing service. If you are familiar with the concept of home sharing, such as through popular sites like Airbnb and VRBO, then the same concept can apply to vehicles. Car-sharing companies allow you to “rent” a vehicle for a short amount of time and you only pay for your usage. You log on to a car-sharing service, find out what vehicles are available near you and you book the usage through the app.

The table below highlights the pros and cons of some of the more popular car-sharing options on the market, plus the estimated costs. In some cases, car-sharing may be equivalent to renting a car through a traditional car rental company.

Car-sharing company Pros Cons Estimated costs
Turo Daily or discounted monthly rates
Peer-to-peer car-sharing
Wide selection of local vehicles
No sign-up or membership fees
Available in large cities and near airports
Delivery may be available
Must pay for your own fuel
Rates are not available for hourly usage
May incur an extra rental fee is you are under age 25
Varies depending on the host, location and brand of vehicle and miles driven
Avail An Allstate company
Guaranteed reservations
Full coverage auto insurance included in daily rate
No hidden fees and upfront pricing in the app
No fees for drivers under 25
Add a second driver for free
Currently limited to 15 major airports in 12 states
Must pick up from the airport shuttle lots
Daily rental rates start at $25 per day, but vary depending on type of vehicle and location
Getaround Peer-to-peer car-sharing
Offers hourly car rental rates
Available in 20 states plus Washington, D.C.
Includes full coverage in its insurance program
Installation fee required
200 mile daily limit
Must pay for your own gas
Hourly rates typically start at $5 to $10, but increase depending on location and vehicle
Zipcar Owned by Avis car rental
Available in a large number of major metro cities and college campuses
Rates cover covers gas, insurance options, parking and maintenance fees
Can book hourly or daily
Membership fees are required
No delivery available, must return and pickup from select locations
Hefty fees if you are late returning or do not use the gascard to refuel
Membership is $7 per month or $70 per year, plus driving rates start at $10

Uber and Lyft are yet another alternative to traditional car rental companies and car-sharing options. With these rideshare options, the best course of action during the holiday season is to schedule ahead of time when possible or pre-book to lock in the lower prices, before the increase in holiday pricing. The further ahead you can lock in your vehicle needs for the holidays, the better chance you have of making sure you have transportation for your travels.

One point to consider when booking a car-sharing service is to make sure you read the fine print of any agreement. There may be more to sharing a vehicle than you might expect. Thoroughly reading the agreement can help reduce any surprises. Each company has slightly different rules, especially with what is included in the per-mile cost. Be sure to ask about gas costs, insurance coverage, where pickup and dropoff take place and if the rate is available per minute, hourly, daily or weekly. The more information you have up front, the more likely you can comfortably manage the costs associated with car-sharing.

Before booking a car-sharing service, it’s a great time to review your coverage with your auto insurance policy. You may have additional insurance coverage through your policy or you could select the supplemental insurance package offered when booking the car-sharing service.

Winter driving safety guide

Winter driving requires extra attention when out on the road. Not only do you have to be more careful of the treacherous conditions, but you need to be fully prepared in case of an emergency. Before hitting the road in a rental car, a personal vehicle or one you are sharing, make sure your tires are properly inflated. You may also want to keep these safety items and others in your vehicle while traveling:

  • Fix-a-flat, or other tire and air sealant
  • Quality ice scraper
  • Wool blanket and towels, for both warmth or other emergency situations
  • Jumper cables
  • Tool kit with screwdriver and bolts, knife and other items
  • First-aid kit stocked with bandages, gauze and other supplies

The likelihood of securing a rental car this holiday season may be a bit more difficult compared to previous years, but this doesn’t have to impact your opportunity to spend time with friends and family in other cities. You may find that rental prices have increased, so it’s best to plan as far in advance as possible.

Another alternative is a rideshare service, such as Uber and Lyft, or car-sharing services, like Turo and Zipcar. Car-sharing services offer a convenient alternative to renting and may even end up costing less than a traditional rental car service.

Written by
Sara Coleman
Insurance Contributor
Sara Coleman has three years of experience in writing for insurance domains such as Bankrate, The Simple Dollar, Reviews.com, Coverage.com and numerous other personal finance sites. She writes about insurance products such as auto, homeowners, renters and disability.
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Insurance Editor