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Mark Bower

Mark founded MoneyMaxim in 2008, with the aim of delivering an impartial and independent service. Mark is a regular money saving expert in the press and writes regular news and articles for the MoneyMaxim news pages sharing his views on banking, personal insurance and the utilities (gas, electricity, mobile and home phones, broadband and pay TV) market with customers.

Mark Bower is one of our Team of Experts

Our Forecast for Car Hire in 2023

Be prepared for your car hire next year with our look-ahead to 2023

Car keys being handed

It’s safe to say that 2022 has been another turbulent year for car hire and the travel industry as a whole. There has been some (understandable) remaining nervousness around COVID-19 which, particularly at the start of the year, led to lower numbers of people travelling as a whole.

On top of this, there is a continued shortage of cars from the ongoing car microchip issue. This meant that when demand for car hire began to rise around April this year, prices were extraordinarily high compared to pre-pandemic levels. This was dramatically offset as car hire companies received the vehicles they had on order and prices dropped significantly throughout July, August and September.

Whilst prices may have been low during the Summer, we are seeing them rise again slightly for the end of this year. Every year car hire firms purchase new cars for Summer and then defleet (sell these cars) when it comes to Autumn and their off peak seasons. 2022 is no different and firms have started decreasing their fleets, this is causing prices to nudge upwards as people are still looking to travel.

Robert Kiernan, a Travel Counsellor based in Hove, put it perfectly when he mentioned on LinkedIn that ‘The biggest issue is supply versus demand. Capacity is a long way off 2019 levels but there is still so much pent up demand’. Robert also mentioned that the time that you leave between booking your holiday and actually travelling is likely to make a huge difference to the cost of your break – that’s flights, accommodation and car hire. This is such an important one! All of us in the travel industry, regardless whether it is industry experts, bloggers, journalists or travel agents (such as Robert), can’t stress enough the importance of booking as early as you possibly can.

So what is the prognosis for the rest of 2022 and 2023?

Car hire firms are likely, given the current economic uncertainly, to keep fleet numbers lower than in 2019 and this has led us to anticipate that throughout 2023 demand will continue to outweigh supply. This does mean, sadly, that the higher prices we have seen in the car rental market this year are likely to continue into next year, although possibly not the same extent as last year.

We’re currently seeing customers booking their car hire for Summer and Autumn 2023 already with prices in key locations at key time already moving upwards. One of our team are off to Ireland over the late May Bank Holiday and Half Term next year and prices for an economy vehicle are already in the region of £600 for 10 days.

Our advice remains consistent from this year - book early. If the price of your hire drops closer to your departure date you can always cancel and rebook but by making sure you’ve got your vehicle reserved in advance you know the highest price that you’ll need to pay for it.

Remember with our sister website Clarify Car Hire you get free cancellation up to 48 hours prior to picking up your car so you don’t need to worry about not being able to cancel or being hit with cancellation fees! We would suggest even if you don’t go with Clarify Car Hire do make sure you book a vehicle on a free cancellation basis.

If you do have plans to travel please do not assume that the cost of living issues will drive down prices significantly. Airlines and car hire firms will both be looking to match capacity to likely demand – and that will maintain prices at higher levels than have historically been the case.

Although some will perhaps unable to afford the holiday they dream of next year many others are clearly making plans already.

It is unlikely that all the issues that put people off in 2022 will be repeated, Covid testing, Passport Office delays, staffing shortages at airports, flight cancellations – and that in itself will be a major driver for those who have yet to leave the country post pandemic.

Run a car hire quote here today to make sure you secure your vehicle for your next trip!

Image courtesy of: StockSnap from Pixabay