Holidaymakers could save hundreds of pounds by canceling and rebooking their hire car, after prices suddenly plummeted in popular holiday destinations. Car rental prices jumped earlier this year on a rush of travelers booking trips, coupled with a lack of supply as rental companies sold many of their vehicles during the pandemic.
In some places, car rental costs have more than doubled since 2019, according to iCarhireinsurance.com, a provider of car rental excess insurance.
However, prices are starting to drop in countries like Spain, Italy and the United States as car rental companies receive deliveries of new cars, boosting supply. Flight cancellations and the cost of living crisis have also dampened demand, leading some rental companies to lower prices.
Cut costs: Hannah Linder and her family, inset, saved £316
Broker Clarify Car Hire says if you had booked a Hyundai i10 in June for a week’s holiday in Alicante later this month you would have paid £262. But if you booked the same car now, you’d only pay £86.
A family collecting a Citroën C1 in Catania for a week in Sicily at the end of this month is said to have prepaid £866 in June. They could cancel and rebook now for £510, a saving of 41%.
Meanwhile, someone renting a Mustang convertible in San Francisco could save 48% by canceling a reservation made in March and booking at today’s price. Fees have also dropped for fall getaways. Sara and Glenn Burns, from Marlow in Buckinghamshire, saved £458 by canceling and booking their car hire for a two-week trip to Seville in October. In June they shelled out £1,005 for a hybrid Toyota C-HR, but the price they re-let was £547. Sara, a 61-year-old finance manager for a charity, says: ‘I would urge anyone who has booked a holiday car rental to check out if they can save money by canceling and changing their booking.’
Most companies, including Europcar, Budget and Avis, allow free cancellation up to 48 hours before pick-up. At Enterprise you’ll need to cancel at least three days in advance to get a full refund, otherwise you’ll be charged a £40 fee.
It’s usually easy to cancel online, with the refund being made to the debit or credit card used for the booking. Some providers refund customers within days, while others can take up to 20 business days. If you paid in another currency, pay attention to any exchange fees charged by your bank. But depending on how much you’d save by booking at a lower price, bank charges or car rental cancellation fees might be worth paying.
Mark Bower, Managing Director of Clarify Car Hire, says: “We have never seen these extremes in car hire prices before.
“In January, when Omicron took over Europe, some prices were offered at discounted rates. Then demand surged, and by May car rental companies were pricing sky-high, unsure whether they would receive a new fleet of cars to secure their term reservations. This was due to a shortage of automotive semiconductor chips, which delayed car production. The market is now stabilizing and common ground is being found. But prices have not gone down everywhere.
Car hire costs for next month in places such as Dublin, Lyon in France, Faro in Portugal and Almeria in Spain have increased since the spring, according to Clarify Car Hire. This could be due to increased demand and delays in new car deliveries. Vacationers may also struggle to get a cheaper deal if they hire a seven- or nine-seater.
Bower recommends customers compare prices regularly — including with other rental companies — as they approach their trip to see if they can get a better price. Hannah Linder, from north London, is traveling to Perugia, Italy, for a family holiday at the end of this month and has saved €375 (£316) after canceling and re-renting her hire car twice.
She originally paid €1,169 (£985) for a Fiat 500L for the nine-day trip, with comparison site DoYouItaly.com in June. Hannah checked prices earlier this month and noticed the same car was available for £909, so she took advantage of the free cancellation policy and rebooked at the lower price. A few days later the price dropped to €794, so the mother of two canceled and booked a second time.
Hannah considers starting the process all over again, because each time she looks, the price has dropped again. Alternatively, it could upgrade to an SUV, which now costs the same as the smaller Fiat 500L. “The only extra charge I paid was the exchange fee from my credit card provider, but it was around €11, so canceling and rebooking was well worth it,” she says .
Ernesto Suarez, managing director of iCarhireinsurance.com, says it’s crucial that travelers don’t cancel their car rental reservation until they’ve secured one at a better price. “Inventory can still be tight with some suppliers in some destinations, and the last thing you want to do is find yourself without a car.”
Bower of Clarify Car Hire adds: “If you’re planning on hiring a car, book as soon as possible and then come back to see if you can improve the price.” Longer term, you can book a week’s car hire next June in Faro for just £145, Malaga from £154 and Chania Greece from £224.
Some links in this article may be affiliate links. If you click on it, we may earn a small commission. This helps us fund This Is Money and keep it free to use. We do not write articles to promote products. We do not allow any business relationship to affect our editorial independence.