the average daily rental cost of a vehicle hit a record high of $ 63.75 last month, a 50% increase in some areas, according to data collected by Jefferies, a New York-based investment firm.

As the economic recovery accelerates, consumers are caught in the midst of high demand and limited supply.

Related: Ford Bronco returns to market after 25 years of retirement

Demand for cars has been ramping up for months due to a shortage of electronic chips and soaring demand for copper, Fox Business Network reports. Still, supply has shrunk as car rental companies downsized their fleets during the pandemic to cut costs.

But the latest rental price spike is something never seen before, says Jefferies analyst Hamzah Mazari, who has been tracking Avis, Hertz and Enterprise rental prices since 2015.

The median daily price at Avis jumped to $ 68.07 in May, which is 50% more than the median price charged by the company between 2015 and 2019.

Related: Auto industry continues to face the heat, vehicle retailing drops to 70.69% from May 2019

Avis’ median price then fell from $ 81.59 to $ 94.51 between June and July and hovers at $ 103.40 for August.

Hertz and Enterprise are also seeing similar jumps.

Mazari believes prices won’t go down until next year, when new car production normalizes and rental companies can add more cars to their fleets.

In the meantime, says Mazari, “you can see consumers using public transport.”

Some consumers are already doing this.

Brooklyn, NY resident Gordon Price says he used Uber on his entire vacation in Puerto Rico because all of the car rental companies were booked. He found a KIA Sorrento for $ 400 a day.

“I was not amused,” Price said. “I wasn’t paying him either.”

Related: Here’s a chance to invest in the future of engine technology

Copyright 2021 Entrepreneur.com Inc., All rights reserved

This article originally appeared on entrepreneur.com


About The Author

Related Posts

Leave a Reply

Your email address will not be published.