Yet that initial spike in prices was in spring 2021 - two full years ago - so why haven’t car rental companies bought more vehicles, thereby allowing prices to moderate? The reason might be simple: They’re making too much money. Since then, demand has continued to grow, but the pace is not as radical as what we saw.” “There was no way to grow the supply fast enough to meet demand. “The surge in demand is what created that crunch,” Mangahas says. Microchip shortages and other supply chain issues throttled supply and drove the cost of cars higher. However, as the pandemic waned and demand picked back up, these companies couldn’t quickly restore their fleets. The Avis Budget Group sold 250,000 vehicles in 2021 alone. Unlike airlines and hotels, which can’t immediately sell their aircraft and properties during a downturn, rental car companies offloaded a huge portion of their fleet. The early stages of the pandemic decimated the rental car industry, as it did for the travel industry more broadly.
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