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Hoping to rent a car this summer? Good luck

Hoping to rent a car this summer?  Good luck

Taylor Raggers and her partner, Will Perry, were looking forward to their honeymoon in Newfoundland this summer before realizing they couldn’t explore the county.

The couple, who live in Port Hope, Ontario, tried to book a car in February for a trip they planned to take at the end of June, but were unlucky.

“I probably called five or six places and then everything I could find online, and they… [all had] nothing available,” Raggers said.

The lack of car rentals means Raggers won’t be able to explore Perry’s home province and meet relatives who live there. Instead, the couple sets off in their own vehicle to a closer destination: Nova Scotia.

“Will really wanted to show me where his family came from. And I really wanted to see Newfoundland. It’s high on my bucket list,” she said.

Taylor Raggers, right, and her partner, Will Perry, left, pictured with their daughter Delilah Perry, were planning to travel to Newfoundland in June for their honeymoon, but couldn’t find a rental car in the county. So they decided to drive their own car to Nova Scotia instead. (Hope Dawn Photography)

History is repeating itself as last summer’s “carpocalypse” returns. With travel growing in popularity and more Canadians planning to get away this summer as the pandemic eases, rental car companies are trying to secure more vehicles, said Craig Hirota, vice president of government relations and member services for the Associated Canadian Car Rental Operators.

“Our best estimates show we’re probably still 15 to 20 percent lower than pre-pandemic numbers,” Hirota said.

Where is my chip?

Earlier this month, Statistics Canada released the first in a series of reports on the car rental industry, with initial focus on British Columbia

The report found that the size of rental car fleets in the province fell by more than 30 percent in 2020. And while fleets started to recover in 2021, they came nowhere near pre-pandemic levels as companies struggled to find vehicles.

A major cause of the car rental shortage is the slow pace of new vehicle production. Automakers have fallen behind in production as they continue to face shortages of semiconductor chips, a component necessary for digital technology.

“That was compounded by the fact that our industry had to downsize our fleet… when demand fell in March 2020,” Hirota said at the start of the COVID-19 pandemic.

Montreal-based car rental company AutoPlateau is experiencing exactly this challenge. Gabriel Raymond, who works for the family-owned company, said it had to downsize its fleet when the pandemic hit. Now that it’s trying to expand, Raymond said it’s hard to find cars.

“The car makers have run out of chips for the cars. So car dealers are running out of cars. So car rental companies can’t renew their fleet,” he said.

Gabriel Raymond, right, pictured with his grandfather, Rodrigue Desrosiers, the owner of AutoPlateau, says the car rental company has helped customers struggling to find a rental car elsewhere. (CBC)

But Raymond said the company has been able to make up for the shortfall because it keeps vehicles running longer and chooses to refurbish them rather than replace them.

Despite not having a marketing budget, he said AutoPlateau has attracted customers who are not lucky enough to rent a car elsewhere.

“To be [stressful] because we have a lot of demand everywhere that we wouldn’t have otherwise because we’re a small business,” Raymond said, adding that the company relies on word of mouth to attract customers.

The shortage of rental housing has significantly increased the cost of renting a vehicle. According to Statistics Canada, rental car prices rose 30 percent in 2021, while headline inflation stood at 3.4 percent.

Hirota said the higher cost of renting a car is partly because demand is outpacing supply and inflation is driving up the cost of cars and repairs.

Travel planning this summer

With summer in sight and most of the COVID-19 restrictions lifted across the country, tourism is expected to pick up again. The World Trade and Tourism Council predicts that the Canadian travel and tourism sector’s contribution to GDP could recover to $157 billion (Cdn) by 2023, just 0.8 percent below pre-pandemic levels.

That means more travelers, like Taylor Raggers, will be looking for a rental car.

Raymond advises travelers planning to rent a car this summer to plan as soon as possible and be aware of companies that overbook.

“Bank transfer, especially in [a] period of high demand means they will put more customers on the same car,” he said.

Some travelers also opt for a less conventional transport option: car sharing.

Similar to Airbnb, car-sharing services allow people to rent out their vehicles to others. US car-sharing company Turo says its services are helping customers secure vehicles amid the rental shortage.

“What we’re seeing is our Turo hosts stepping in to fill the void,” said Cedric Mathieu, the vice president and head of Canada at Turo.

Mathieu said the peer-to-peer model of carsharing is more flexible than a fleet model, which faces challenges when it comes to increasing or decreasing the number of vehicles available for rental.

Cedric Mathieu is the vice president and head of Canada at Turo, a US-based car-sharing company. Turo currently has more than 50,000 vehicles available in more than 350 cities across Canada. (CBC)

“As demand started to pick up again, we’ll be able to acquire and convince more hosts to join,” he said.

Turo currently has more than 50,000 vehicles available in more than 350 cities across the country. Most recently, the company has expanded to Newfoundland and Labrador, New Brunswick and Prince Edward Island.

As for when a recovery for the car rental industry can be expected, Hirota of the Associated Canadian Car Rental Operators said it’s hard to predict given how quickly things can change. But as automakers continue to ramp up production, he said the challenges are likely to persist in the coming years.

“I think it will continue to be a challenge to get vehicles through the coming year and possibly the next year after that,” he said.