The brakes have been put on summer road trips with Australians who decide to holiday at home facing rental car prices up to double pre-pandemic rates.
The worldwide car shortage that has hit new and used car retailers has also jacked up rental prices by hundreds of dollars a week.
A shortage of electronic chips means some new cars will take months to be delivered. That shortage has pushed up the prices of used cars, which are 36% higher in Australia than before the pandemic began.
Australia’s international borders have reopened, while some state borders are still in place. But with many Australians still reluctant to leave these shores – whether out of fear of Covid or because of the complications it brings – Tourism Australia is continuing its Holiday Here This Year campaign to support domestic tourism.
But those without wheels, and those wanting to fly and hire some, can expect to pay more than $1,000 a week.
Rentals are most expensive in Tasmania, where prices have reached $169 a day – that’s $1,183 a week, assuming no discounts. No state has an average price of less than $100 a day.
Kayak, the travel search engine, collected the data for car rental searches between 1 December this year and 31 January 2022.
The number of people searching for rental cars more than doubled in most states compared to last year, and as demand increased so did prices. In the Northern Territory, Queensland and Tasmania, prices have more than doubled since 2019.
Federal Chamber of Automotive Industries’ (FCAI) public affairs manager, Doug Wylie, said automotive shortages aren’t caused by the shipping logjam that has affected other products including building materials, or the pallet shortage that is slowing the distribution of groceries.
“It is primarily due to the global shortage of semiconductors and the flow-on impacts to vehicle manufacturing,” he said. “The issue with the semiconductor chips varies across car brands, and is a problem for the manufacturing sector in general. Carmakers are dealing with it, as are whitegoods manufacturers.”
Chip manufacturers slowed down production as lockdowns began, and were unprepared when demand for chips soared as people bought electronic goods to keep them entertained or to work from home.
A storm and a fire in separate manufacturing facilities compounded the problem.
It takes time and money to establish new factories, Wylie said, so there will be car shortages until next year.
“The rental market in many respects is a snapshot of the car market. You have luxury models, hatchbacks and family cars,” he said.
“The shortage varies across brands and models greatly.”
“[When buying a new car] there are some cars you can purchase off the lot today, some you’ll purchase and they’ll be delivered in a week, some can take months.”
FCAI’s data shows car rental companies are trying to make up for the shortfall. They have bought almost 891,000 cars so far this year, compared with just over 726,000 at the same time last year.
“Consumers in general need to be doing their research on what models are available here and now. They need to be prepared for possible wait times on some models, especially if they’re looking for particular specs, colours, and trims,” Wylie said.
“Despite the apparent shortage, we have about 86 brands operating in Australia. With this level of competition consumers can still get a good deal within reasonable timeframes.”
The Kayak data shows the last week in January is the cheapest in the holiday period to rent a car (the average price is $92 a day), while the week from 27 December to 2 January is the most expensive, with an average price of $157.
