If you're leaving your own car in the driveway for summer vacation, expect your rental car to take a bigger bite of out of your vacation budget.
Just a few months ago, rental car companies were offering low prices after a sharp drop in travel left excess cars idling on their lots. Those companies have since slashed their fleets in line with declining demand. Avis Budget Group Inc., for one, said its fleet was 22 percent smaller at the end of the first quarter than a year ago.
With fewer cars available, rental car companies have been able to boost their prices to pre-recession levels.
Clem Bason, president of Expedia Inc.'s Hotwire Group, says a year ago the average retail price for a rental car was $35 a day. Today, it's $44 a day, and that's expected to rise even further this summer.
Bason says rates are particularly high in parts of California and Las Vegas -- areas that were hit hard by the economic downturn and drop in travel spending.
With fewer rental cars available, it may be more difficult to get the car you want. Customers may also encounter longer lines or pressure to accept a different car than the one they reserved, so get to the counter as early in the day as possible.
So how can you get the rental car you want at the best possible price this summer? Travel experts say the key is to book early then shop around for a better deal. There is rarely any penalty for canceling a reservation.
Also, last-minute discounts are sometimes available on unreserved cars, says Becky Alseth, senior vice president of marketing for Avis.
Bason notes that "opaque" travel Web sites like Hotwire.com and Priceline.com -- so-called because they hide the identity of their suppliers until a deal has been booked -- are offering deeply discounted vehicles that rental car companies are not able to book at higher retail prices.
Travelers with firm vacation plans may want to consider paying up front for a cheaper rate. Avis' Budget brand, for example, is offering a discount of up to 40 percent to customers who pay for their rental cars in advance.
The strength of travel demand will help determine how high rental car prices will go this summer.
Alseth expects demand to be solid. "People still want to take a vacation," she says. "They just may take a more modest vacation."
Bason, however, is more cautious: "I don't think anyone knows how the consumer is going to travel this summer."
