What is the future of holiday car hire?

For many people, the summer of 2022 will be remembered as the great car rental rip-off. The car hire companies sold off their fleets during the Covid pandemic and hadn’t replaced them in time for the resurgence in demand for the 2022 season. That led to some outlandish prices being charged, with €2,000 for a week’s rental in Ireland not uncommon.

“In Ireland we heard reports of people cancelling their holidays because of the car hire costs,” says Irish Travel Agents Association (ITAA) president Paul Hackett.

Other travellers resorted to extreme solutions. In one case it was reported that a group of American tourists found it cheaper to hire a bus and a driver to transport them around Ireland during their trip than to rent a minivan which they would have had to drive themselves.

In another, a tourist from England bought a second-hand car here and insured it with his own insurance company. He sold it at the end of his holiday and was pleasantly surprised to make a small profit on the deal.

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Supply and solutions

The story wasn’t much different in mainland Europe, where tourists were charged some quite eye-watering prices for the pleasure of driving around in a Fiat 500 which had clearly seen better days.

The good news is that these experiences should now be a thing of the past. “The outrageous pricing of car hire we saw in the summer of 2022 has more or less gone,” says Hackett. “It was chiefly a supply issue. The car rental companies simply didn’t have the stock to meet demand from customers. One car hire company in Dublin Airport was down to one-third capacity last summer. Car hire rates are pretty much back to normal now.”

But normal can still be pretty expensive for many people on tight budgets who are already contending with rising costs for their holidays. The solution there is to avoid the necessity of hiring a car.

“The rail and public transport systems within cities and between cities in Europe tend to be very good,” Hackett notes. “Even in America, metro systems in cities like Los Angeles have improved greatly. It used to be impossible to visit LA without hiring a car but that’s no longer the case. There are lots of places where you no longer need car hire. You just don’t need it.”

And even if it is required, you can minimise the cost by planning ahead. Do you need a car for your entire holiday or just for a day or two? If so, you can rent a car in countries such as Spain and Portugal for about €50 a day, including all insurances and covering additional drivers. Very affordable if you just need it for a one-day excursion.