Want to go see the Rockies or the sea this summer? It could be that renting the car alone is as expensive as plane tickets to get there and accommodation in a four-star hotel. Far from abating, the shortage of vehicles has not finished giving headaches, including to those who want to make a purchase.
Posted at 6:30 a.m.
While having fun looking at the prices of a getaway to Calgary in mid-July, we really have the impression of having the berlue. Plane tickets are offered at $410, while some cars cost about the same price…per day! And it’s not about Porsches or luxury convertibles.
A small Rio costs $3,376 for a week ($482 a day), on Expedia. The Rentalcars.com site offers a Corolla for $3,630 ($518 per day). The big reputable brands like Avis, Budget or Hertz have almost nothing available.
Curiously, larger models are likely to be more economical for escaping into the mountains, despite the price of gas. A Sonata will set you back around $1400. It almost seems like a bargain if you forget that three years ago you could get by for $25 a day.
It’s more advantageous to go to Vancouver, where most vehicles are a little cheaper than in Calgary. And for those who dream of a getaway to the Gaspé Peninsula, Montreal rental companies charge around $1,100 per week for their small vehicles. If you have kids and camping gear to haul, budget $1500 for an SUV or upwards of $2000 for a minivan.
These prices are absolutely nothing out of the ordinary.
“In my opinion, we are at historic highs,” said the president of the Regroupement des loueurs de vehicles du Québec (RLVQ), Annie Roy. After the price explosion in the summer of 2021, its members expected a return to normal in 2022.
This is not the case. Demand exceeds supply. And the prices are on par.
As travel resumes, vehicle rental companies are unable to rebuild their fleet (sold at the start of the pandemic) due to the shortage. Manufacturers supply their dealers first. There is also a lack of parts to repair broken vehicles, and those that have been targeted by thieves. Many catalysts are disappearing. In addition, the price of parts has jumped “from 25 to 45%”, and there is a shortage of staff.
“It’s not jojo for anyone”, summarizes Annie Roy. She suggests that Quebecers book as soon as possible for the coming summer. Otherwise, they risk ending up in the water.
The co-founder of the deals and advice site for travelers Flytrippers, Andrew D’Amours, can attest to this. Upon arriving at the Dallas airport, he found that no rental company had a vehicle available. In addition to booking “long in advance”, the globetrotter insists on the use of an online comparator. Because no sign is cheaper at all times and in all cities, whatever his brother-in-law may say.
Another tip: rent from a branch outside the airport site. Sometimes it’s half price. Worth taking a taxi to get there. You can also save big by refusing unnecessary insurance.
And why not choose a destination where the rental of a car will not be required, even if it means paying more for the plane and the accommodation?
Holidaymakers are not the only ones having to endure the disruptions in the automotive sector.
Desjardins has just published an analysis on the “deep imbalance” affecting this industry in Canada and putting pressure on prices. The document contains nothing to encourage consumers who plan to buy a vehicle this year.
One of the main sources of problems, the shortage of semiconductors, is currently accentuated by Vladimir Putin. Many materials and raw materials that go into making semiconductors and other parts come from Russia and Ukraine. This could slow factories even further, at a time when inventories are already low.
“The recovery in global semiconductor production is encouraging, but a return to normal cannot be expected before 2023. In this context, vehicle sales will remain limited in Canada in 2022 and prices will continue to climb,” writes Desjardins’s chief economist, Hélène Bégin.
We will therefore have to wait until next year for the overheating to subside.
Until then, motorists who want to get a new vehicle will have to put an end to the bargains and take their troubles patiently. The delivery time for electric models, for example, is 12 to 24 months. It’s shorter for gas-powered models, but foresight is in order if his lease comes to an end.
As if that were not enough, the low level of inventories “means that the interest rates offered by manufacturers are significantly higher than those offered before the start of the pandemic”, indicates Hélène Bégin. For highly sought-after models, the rate can exceed 6%.
In this unprecedented context, used vehicles continue to increase in value. In fact, in 2021, the average loan for the purchase of a used car has increased by almost 10% to reach $19,000. For popular light trucks, vans and SUVs, the jump is 23% (from $34,000 to $42,000), according to Desjardins.
The most recent data from Statistics Canada indicates that the average Quebecer spent $10,492 on transportation in 2019. It will be interesting to see what impact the pandemic has had on this important budget item when the 2020 statistics are released. and 2021.