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."


So desperate is the situation that Zero Davey, a boutique apartment hotel on the Hobart waterfront, has acquired a Toyota Yaris for use by its corporate guests, some of whom have been resorting to taking taxis for trips between Hobart and Launceston.

Tom Darke, general manager of Zero Davey, said the hotel once had three such vehicles for guests but they were rarely if ever used. Since Zero Davey felt compelled to reintroduce one car for guests during the rental shortage it's been in strong demand.

Even if a hire car can be found by prospective tourists for a holiday in Tasmania through the conventional channels, the cost can prove prohibitive for some, even outside school holidays.

Until fleet sizes are restored, visitors to popular tourism markets such as Tasmania next month can expect to pay as much as $2823.99 for a week-long rental of a Mitsubishi Pajero four-wheel drive through one major provider. Even a lowest tier "compact" vehicle, such as a Kia Rio, will cost $1755.60 for the same period.

However, customers of brands such as Avis in Tasmania can secure cheaper rates by accepting a "pay now" option (pay when you book the car rather than when you collect it). At Uluru in the Northern Territory - another destination likely to be popular with those securing half-price air tickets - customers are unable book Avis vehicles directly online next month. They must do so on an "on request" only basis by phone.

Matt Cameron-Smith, chief executive of Voyages, operators of the Ayers Rock Resort, said that as an alternative to rental cars, guests can access free return airport transfers from Ayers Rock (Connellan) Airport.

"Many great touring options are available for guests allowing them to enjoy a holiday at Uluru without the need for car hire. "If guests do want to self-drive to other attractions such as Kata Tjuta, we understand there is sufficient inventory with the car hire companies."

He encouraged visitors to book well in advance. "It is now high season and with Easter and the upcoming school holidays we are looking forward to a busy domestic tourism period."

Travellers to Tasmania could alternatively opt to take their own vehicle on board the Spirit of Tasmania ferry from Melbourne. Thanks to a federal government rebate, cars and motorcycles can ride for free until the end of June, a saving of about $240.

See also: 52 Weekends Away: Tasmania's best weekend getaways for 2020

See also: How to get a half-price price domestic flight: What you need to know