Some analysts estimate that prices will not fall until auto production normalizes later this year.
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The demand for a rental car is hotter than ever this summer, reports the NY Post.
The average daily rental cost of a vehicle hit a record high of $ 63.75 last month, up 50% in some areas, according to data from Jefferies, a New York investment firm.
As the economy picks up again, consumers are trapped in the midst of strong demand and tight supply.
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Auto demand has been shifting into high gear for months due to a shortage of microchips and a sharp rise in copper demand, reports Fox Business Network. However, supply has shrunk as rental car companies reduced their fleets during the pandemic to cut costs.
But the recent spike in rental rates has never happened before, says Jefferies analyst Hamzah Mazari, who has been tracking rental rates for Avis, Hertz, and Enterprise since 2015.
The median daily price at Avis rose to $ 68.07 in May, 50% above the median price the company charged between 2015 and 2019.
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The median price of Avis then rose from $ 81.59 to $ 94.51 between June and July, hovering at $ 103.40 in August.
Hertz and Enterprise are also seeing similar leaps.
Mazari estimates that prices won't start falling until next year, when new car production normalizes and rental companies can add more cars to their fleets.
Meanwhile, Mazari says, "You can see that consumers are turning to public transport."
Some consumers are already doing just that.
Gordon Price of Brooklyn, NY, says he used Uber for his entire Puerto Rico vacation because every rental car was fully booked. He found a KIA Sorrento for $ 400 a day.
"I wasn't amused," said Price. "I didn't pay for it either."
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