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Rental car shortage shows economic recovery will not be smooth
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How the pandemic led to a rental car crisis just as Americans are ready to bust loose David J. Lynch, Yeganeh Torbati © Joe Raedle/Getty Images People wait in line at the Dollar car-rental agency at Miami International Airport on April 12. Customers are finding that agencies have limited or no vehicles available as people begin traveling again. Avis Budget Group’s stock price closed at an all-time high on Friday, a sign that rental car companies’ fleet-shrinking strategies are paying off financially even as they leave consumers fuming.
Popular Searches Major rental car operators last year sold off more than 770,000 cars as the pandemic crushed demand and kept Americans home, according to Jefferies Group, an investment bank. More than 1 of every 3 rental cars that were in service before the pandemic are no longer available.
The price for used pickups is going up, up, up. Pickup trucks are in strong demand. (David Paul Morris/Bloomberg via Getty Images)
According to used automobile wholesaler Manheim, the average wholesale price for a pickup hit $30,093 in mid-April, which is up from #28,121 a month earlier and $17,201 last April when the industry was oversupplied during the worst part of the coronavirus lockdowns.
Manheim chief economist Jonathan Smoke said the increase should be reflected in retail prices within six to eight weeks. This is fundamentally the most extreme demand and supply imbalance that you can envision happening, he said.
Along with the reopening of the economy and improving customer sentiment, stimulus payments and tax refunds are creating a perfect storm that’s driving demand.
Supplies Tight for Costly Vehicles; Econoboxes Linger on Lots “It’s going to be a great year for auto dealers,” says Jonathan Smoke, Cox Automotive’s chief economist.
Automakers and their dealers are in for a solid 2021, Cox Automotive economists predict during a quarterly report on auto sales.
“It’s going to be a great year for auto dealers,” says Jonathan Smoke, the company’s chief economist, citing not only brisk vehicle sales but also more service work.
Regarding the latter, many vehicle owners delayed routinely servicing their vehicles in 2020 because of COVID fears. This year, more people will “catch up on their vehicle maintenance” as the virus becomes less threatening because of vaccination programs, he says.
Auto Sales Improving But Curb Your Enthusiasm
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