Hiring a car for a week in the summer of 2023 on average will cost you £200 more than it would have four years ago, according to a study from iCarhireinsurance.com.
The study found that while prices have dipped marginally compared to last summer, a family could still wind up paying almost £1,000 for the combined cost of car hire, petrol and extra insurance and equipment.
The study, carried out over 12 different countries, compared the cost of basic car hire for a compact family car in the week from the 29th of July to the 5th of August 2023 – prime holiday time for many families – to the same weeks in 2019 and 2022.
The average cost of car hire this summer was calculated as £520, compared to just £310 in 2019 – a 68% increase. On the other hand, car hire in the summer of 2022 reached a startling £652 on average as many car hire companies had sold off large numbers of their vehicles during the pandemic when people were unable to travel.
The research was carried out across major tourist locations in 12 different countries – Australia, Croatia, France, Germany, Greece, Italy, Portugal, Spain, Switzerland, Turkey, UK and the USA – and looked at prices offered by six different rental companies – Sixt, Hertz, Avis, Budget, Enterprise and Europcar.
Of the countries surveyed, the cheapest for car hire was Germany, where renting a car for a week cost £365 on average – over £150 below the international average. The USA was found to be the second cheapest – renting a car for a week in Florida would set you back about £406.
Conversely, the most expensive country by far for car rental was Switzerland, where hiring a car for a week cost £711 on average – almost double the average in Germany. Italy was the second most expensive overall, but £61 cheaper, at £650 on average for a week’s car hire. The average cost for each of the remaining eight countries ranged from £421 to £599 a week.
Comparing these prices to previous years, the biggest increases from 2019 were recorded in the UK (215%), Australia (140%) and Switzerland (101%). The smallest shifts occurred in Portugal and Greece, with increases of 21% and 22% respectively.
|Average Car Rental Price in 2023||Average Car Rental Price in 2019||Increase on 2019 Price|
It goes without saying that prices within each country also vary considerably, however. For starters, the specific locations looked at in each country were generally tourist destinations and capital cities (such as London and Geneva). The data analysed by iCarHireInsurance.com also revealed differences of over £200 between different providers – in Switzerland, Sixt charged £585 for the week’s hire, compared to Enterprise’s £814, while in France, Sixt charged £498 compared to Avis’ £740.
The figures keep climbing when you factor in extras you might be sold at the rental desk. Insurance add-ons such as car hire excess insurance (also known as a super collision damage waiver), tyre and windshield cover and an extra driver contributed an extra £276 overall. It may sound shocking to learn that this is over six times the amount you might pay if you bought these policies from a specialist provider ahead of time, but it’s all too common for car dealerships and rental desks to push these extras onto customers, while charging significantly higher rates than anywhere else.
Throwing in a sat-nav (£83) and child’s seat (£66) from the rental desk amounted to another £149, two more items that you can find cheaper elsewhere (you may not need a sat-nav at all if you have a smartphone).
Petrol costs also varied dramatically, with the cheapest prices found in the USA and Turkey at £32 for a full tank (40 litres) – that’s over £30 cheaper than in France and Greece, which boasted the most expensive prices at £65 and £64 respectively. However, the average price came to £54 overall which, when combined with average hire costs and the add-ons we’ve already mentioned, would cost you a total of £999 in one week just on car rental expenses.
Ernesto Suarez, founder and CEO of iCarhireinsurance.com, said: “We saw record high prices for rental cars in 2022, mainly because rental companies reduced stocks drastically during the pandemic and then hadn’t been able to replace them quickly enough in all destinations when travel resumed. This combined with high demand at the peak summer periods led to some eye-wateringly high prices.
“As we go into next year, we’re expecting to see a more normal travel picture resume, as fleets become more in line with seasonal demand.
“We might never see some of the rock-bottom prices that we saw before the pandemic, but hiring a car is still an excellent way to experience a destination and good deals can be found if you shop around. Most rental companies offer free cancellation 48 hours before collection, so it’s worth checking prices closer to your holiday, to see if you can grab yourself a bargain.”
How can I avoid paying too much for car hire?
There’s no avoiding the fact that the price of car hire has gone up, but there are still ways of easing the cost and making sure that you don’t blow your holiday budget.
For starters, always try to book your rental car in advance, as doing so on the spot will be much more expensive.
It’s absolutely worth the extra bit of research looking at different providers and car models to see if you can make savings that way. The study shows differences of over £200 between different providers in the same location, so it really pays to compare, and if you’re only staying a week, you probably don’t need the flashiest or best car – just one big enough to get your group from A to B.
As mentioned, the study also focused mainly on popular tourist cities, so it could pay to weigh up your options. For example, would it work out cheaper to hire a car from a different town and drive it to where you’re staying?
We’ve also seen how extortionate insurance add-ons and equipment can be if you buy straight from the rental desk. Rental cars typically come with basic cover in place, but your provider may well try and convince you you need much more comprehensive cover when you come to pick your vehicle up. Remember that there’s no obligation to get a policy from your rental car provider, and the best way to avoid paying for unnecessary add-ons is to decide what extras you need in advance, sort these out ahead of time with a standalone specialist provider, and refuse any add-ons when you collect the car.
For example, car hire excess insurance usually will be really costly if you buy straight from the car hire company, but they may also try to convince you that it’s vital you have it. An excess is the amount you pay if you need to make an insurance claim, and this tends to be particularly steep in a hired car. Having excess insurance means that this will be covered for you in the event of a claim, so it can be a good way of avoiding an unpleasant bill if you end up having a car accident on holiday. However, it is neither a necessity to buy if you think you don’t need it, nor do you need to buy it from the rental desk if you think you do. Read more about the best way to get cheap excess insurance in our article Your guide to buying car hire excess insurance.
You can read about the other kinds of car insurance add-ons out there in our article What are the best car insurance extras and add-ons to have? Remember that none of these are legal necessities outside of basic cover and again, if you do want them, you don’t need to opt for the rental car company’s policy. Be sure to search around and find the best deal you can.
Remember to always read the small print on your policy really carefully when you hire a car to avoid being hit by any unnecessary charges. For example, you may be required to fill up on fuel before returning the car, and if you fail to do so, you could be charged an inflated cost for the missing amount. Or, there might be a limit on the number of miles you can drive your rented vehicle, with additional charges imposed if you exceed it.
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