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Hire Car Inflation

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Holidaymakers in parts of the UK and Europe are facing bigger bills for hire cars - or risk not getting one at all - due to a shortage of vehicles.

Hire firms have not replaced fleets due to forecasts of fewer tourists, as well as difficulty accessing finance, industry figures say.

A last-minute holiday bookings surge is adding to the pressure.

Industry sources say that Spain is the worst affected, with those who can get a car having to pay twice normal rates.

Production cuts

There are reports of bookings for holiday apartments and villas being cancelled because travellers have been unable to get a car, or have found the prices prohibitive

Car hire firm Hertz said that shortages were most prevalent in holiday locations in Spain, France and Italy - while there have also been reports of demand outstripping supplies in Scotland and the Lake District.

"There's a seasonal shortage of rental cars every summer, but it seems to be more acute this year because carmakers have cut production due to the uncertain economy," said president of Hertz Europe, Michel Taride.

"There has been a big increase in domestic and US inbound travel, and holidaymakers are deciding to go away at the last minute."

Booking early was the best guarantee of getting a vehicle at a competitive price, he added.

Finance problems

John Lewis, chairman of Lease Europe - the industry's umbrella body - said that firms were unable to get the finance needed to expand their fleets.

Various national government rules mean that companies cannot move vehicles across borders to meet demand, he added.

Prices on the Balearic islands are more than 100% what they usually are, said Bob Atkinson, business development manager at Travelsupermarket.com.

While in mainland Spain, prices are up to 70% higher at popular destinations such as Alicante, Malaga and Murcia.

"Small cars in particular are in very short supply, and its often cheaper to take a larger car rather than the small ones people go for because they presume they'll be cheaper," Mr Atkinson said.

Anecdotal evidence from car hire firms suggests that older vehicles are being hired out to try and cope with demand.

A weakness in demand for second hand cars means that companies are seeing little sense in selling older vehicles at a low in the market, and held onto such cars.

This meant many customers who did get cars, did not get the quality of vehicle that might be usually expected, with dents to bodywork and scratches more common with some companies.

Holiday firm woes

It is not just individual holiday makers who have had problems getting vehicles.

Direct Villa Holidays offers all customers a free hire car with their bookings - but have struggled to obtain the cars they have promised.

"It has been a very expensive and stressful affair," said co-owner Sara Jones.

"Booking hire cars never has never been a problem before, though prices flickered a bit.

"But this year has just been a nightmare, we couldn't get cars, or, when we could, they were five or 10 times more expensive."

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Laura posted here about a similar situation in Spain

Link to hpc thread

Link to original media article

The hire car market is currently facing up to a difficult paradox. Demand for hired vehicles is at present much higher than supply, yet companies cannot increase their vehicle fleets due to a lack of credit offered by banks during the economic crisis.

Cristina Pernía, employee of Record Go, a hire car company based in Málaga airport, said that her company has had to resort to their fleet of used cars, some of which have more than 200,000km under the bonnet. As such, prices have soared, trebling to 90-100 euros per day, a trend which looks set to continue through to September. Other businesses are advising customers to book now if they want a car for August, and others are booked up throughout summer already, especially where smaller, cheaper cars are concerned. Certain companies have even resorted to hiring out employees' own vehicles, in order not to lose trade.

The financial crisis has wreaked havoc for rent-a-car companies, according to Ana María García, president of the Hired Vehicle Business Owners' Association (Aesva). Last June, hire car businesses bought 18,656 new vehicles, whereas this year the figure has dropped by 89.5% to 1,947 registrations.

Companies are turning to loans direct from car manufacturers, and from outside the banking sector, in order to finance new fleets. The possibility of travelling outside Málaga to find cars has been ruled out since the situation is similar throughout Spain. Ana María García hints that the greatest shortfalls in supply lie with large tour operators, and that holidaymakers searching for hire cars should try small and medium-sized businesses instead.

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