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‘New normal’ drives up car-rental costs

LIHU‘E — The price of rental cars on island has fallen from last summer’s peak but remains higher than pre-pandemic levels, as rental-car companies deal with a shortage of vehicles, supply-chain issues and labor costs.

At the height of the pandemic, a lack of tourists led to many larger companies shipping their cars to the mainland to avoid daily parking costs, leading to a shortage of available vehicles when the island opened back up.

Adele and Clayton Robbertze, who purchased the no-frills, affordable-rental company Rent-a-Wreck in 2019 shortly before the onset of the pandemic, witnessed the fluctuation of prices, which they estimated to have about doubled from pre-pandemic levels.

“Initially the high prices were a result of the shortage,” said Adele Robbertze. “But here’s the thing. Because all the costs have gone up for staff, that’s kept the prices higher. Prices have stabilized to the new normal.”

Nearly a year ago, The Garden Island reported that rental-car companies were offering vehicles at $150 to $300 per day. A review of the travel website Expedia now shows most rentals in the $100-to-$150 range.

Rent-a-Wreck did not ship any inventory off-island during the pandemic, but has found it tough to replace inventory lost due to general wear and tear as a result of the vehicle shortage.

“You do lose cars, but you couldn’t buy more,” said Adele Robbertze. “In a car business you need that rotation, and we didn’t have that rotation.”

A global shortage of computer chips has made manufacturing new cars more expensive, which has driven up prices on vehicles. According to consumer reports, auto manufacturers built 1.7 million fewer vehicles in 2021 than in 2019. And Kelley Blue Book reports that the average price of a new vehicle is up a whopping $5,353 in May this year compared to April 2021.

“There’s still a shortage of cars,” Clayton Robbertze said. “That’s why, if you bought a car two years ago, you can actually ask more for it now.”

Sue Kanoho, executive director of the Kaua‘i Visitors Bureau, estimated that prices have dropped about 50% from last summer’s peak, but still are about 30% more than pre-pandemic rates.

“We are still running a tight inventory from the traditional rent-a-car agencies,” Kanoho said.

Recently, this lack of inventory has been partially filled by peer-to-peer car-rental apps like TURO, which has been a major factor in driving prices down from last summer’s highs.

Apps like this allow private-vehicle owners to easily rent their own cars and can be quite lucrative, with TURO reporting that owners can earn more than $10,000 per year per vehicle. Prices for TURO rentals tend to start around $100/day, a review of their app shows.

TUROs have also caused problems, with some owners operating on public land or private land without permission, and filling up airport parking lots. In April, the state Department of Transportation began ticketing TURO vehicles that were operating at airports.

“We have asked that people be mindful and not conduct commercial activity on private property…without their prior written permission,” Kanoho said. “Lihu‘e Airport parking lot does not allow commercial activity without a paid permit from the (Department of Transportation).”

The owners of Rent-a-Wreck don’t see rental-car prices returning to pre-pandemic levels.

“Dynamics have changed,” Clayton Robbertze said. “And I don’t believe that the prices of the vehicles are necessarily going to go down.”

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Guthrie Scrimgeour, reporter, can be reached at 647-0329 or gscrimgeour@thegardenisland.com.
Source: The Garden Island

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