Australian car rental prices: Cost soars due to car shortage caused by COVID-19

The truth Hertz but Thrifty Australian travellers who are about to compete for 800,000 half-price airfares are discovering that the simple task of hiring wheels in popular destinations such as the Apple Isle could be as elusive as snapping a Tassie tiger.

Tasmania and much of the rest of the country is suffering an acute hire-car shortage thanks to a direct, if perverse, product of the pandemic. And it couldn't come at a worse time, with the federal government next week launching its vaunted and controversial $1.2 billion cheap air tickets campaign.

Burdened by the sudden disappearance of international and domestic tourists after the pandemic was declared last year, a panicked Australian car rental industry sold off much of its fleet to willing local buyers who were ditching public transport because of health concerns.

Then, as domestic tourism began to rebound, the same rental car companies couldn't buy enough new replacement vehicles because global car-maker supply lines have also been badly disrupted during the pandemic.

When demand came to a screeching halt last year with rentals reaching "almost zero", Thrifty, ranked in the top three for market share, reduced its fleet by about 40 per cent, according to a spokesman for the NRMA, owner of the rental car company.

"When COVID-19 hit there was zero demand for car rentals," the spokesman said. "What no one foresaw was how quickly domestic tourism would return. While we're pleased to see the uptake of tourism, Australia is just not importing enough new cars for us to be able to rebuild the fleet.

"We actually used our [remaining] fleet during the worst of the lockdown period as a free transport service for emergency workers," he said. "We were giving them Thrifty cars to get to work, including doctors and nurses. But we are confident we can start to acquire vehicles in significant numbers later this year."

But it's not entirely the end of the road. Luke Martin, chief executive officer of the Tourism Industry Council of Tasmania, said that even if visitors to the island state can't secure a hire car for a holiday, there are other ways to travel around the island and coach and tour operators were helping to fill the gap.

"We're busting our backsides to get people back to the state," he said. "But we're dealing with what is a national challenge. The car rental shortage is a critical problem for the tourism industry but at the moment there's not much we can do about it."