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Eager travelers are facing a major roadblock this summer with rental car prices exceeding the cost of an airplane ticket—if they can even secure a car to rent. 

The pandemic saw many car rental companies selling their inventory to try to offset their losses. Now, these same companies are seeing an influx in demand, and they don’t have the supply to meet it. 

With business travel bouncing back, we wanted to see how car rental spend was affected.

Car rental costs are inching back into business budgets

Using transaction data from Divvy cards over the last two years, we calculated car rental spend as a percentage of total business spend. We weren’t surprised to see that April 2020 took the biggest hit when it came to car rental spend. 

Since December of last year, however, car rental purchases have steadily resumed their place in business budgets as travelers have increased their confidence—both in the safety of travel and in the cash flow of their companies.

DATA: Car rental spend over time (as a percentage of overall business spend)

Car rental spend over time (as a percentage of overall business spend)
January 2019 0.36%
February 2019 0.33%
March 2019 0.39%
April 2019 0.42%
May 2019 0.51%
June 2019 0.64%
July 2019 0.69%
August 2019 0.80%
September 2019 0.68%
October 2019 0.62%
November 2019 0.62%
December 2019 0.44%
January 2020 0.54%
February 2020 0.55%
March 2020 0.39%
April 2020 0.23%
May 2020 0.25%
June 2020 0.34%
July 2020 0.36%
August 2020 0.43%
September 2020 0.41%
October 2020 0.46%
November 2020 0.37%
December 2020 0.31%
January 2021 0.34%
February 2021 0.41%
March 2021 0.44%
April 2021 0.47%
May 2021 0.53%
June 2021 0.59%

*Based on Divvy spend data

Car rental prices are climbing for business travelers

When we looked at the average cost per transaction for car rentals, April 2020 also stood out. While the number of transactions that month was the lowest by far, transaction costs were the highest. This could be because air travel was effectively paused at the start of the pandemic, and automotive travel was recommended by the CDC as the safer travel method.

Since June 2020, the average cost per car rental purchase has only gone up. For business travelers, we’re seeing averages climbing towards $600/purchase. (Some tourists are reporting prices as high as $700/day in high demand areas).

DATA: Average spend per transaction for business car rentals

Average spend per transaction for business car rentals
January 2019 $297.40
February 2019 $239.53
March 2019 $263.47
April 2019 $255.23
May 2019 $297.39
June 2019 $339.41
July 2019 $386.31
August 2019 $354.00
September 2019 $330.35
October 2019 $276.59
November 2019 $307.31
December 2019 $269.15
January 2020 $303.51
February 2020 $270.78
March 2020 $273.38
April 2020 $694.11
May 2020 $445.88
June 2020 $368.24
July 2020 $391.81
August 2020 $434.00
September 2020 $389.70
October 2020 $389.99
November 2020 $406.56
December 2020 $399.11
January 2021 $387.12
February 2021 $412.47
March 2021 $433.97
April 2021 $436.51
May 2021 $443.92
June 2021 $511.90

*Based on Divvy spend data

Enterprise is the king of business car rentals

While car rental companies definitely took a hit in 2020, we were curious which vendors came out on top. 

When we took a look at the most expensed car rental services for business travelers, Enterprise Rent-A-Car was king. Enterprise had the most transactions of any car rental company for business travelers with 32% of all rental car spend. 

This is most likely because Enterprise has the most locations in the U.S.; Enterprise’s website boasts more than 7,600 locations worldwide, while National Car Rental and Hertz (the 2nd and 3rd most popular, respectively), claim 1,500+ locations each. 

DATA: Most popular car rental services for business (as percentage of all car rentals)

Most popular car rental services for business (as percentage of all car rentals)
Enterprise Rent-A-Car 32.61%
National Car Rental 18.44%
Hertz 16.80%
Avis Rent-A-Car 13.86%
Budget Rent-A-Car 7.92%
Alamo Rent-A-Car 3.59%
Thrifty Car Rental 1.97%
Dollar Rent-A-Car 1.64%
Sixt Car Rental 1.44%
Payless Car Rental 0.74%
Other 1%

*Based on Divvy spend data

So what does this mean for business travelers?

The good news for car rental companies is that businesses are traveling again—and these travelers are known for paying top dollar. 

For business travelers, this might be bad news; you’re not going to be able to hop off a plane, head to the car rental service, and expect a vehicle to be available. Instead, you’ll need to plan car rentals in advance—if your business can even afford them.

Stay on top of your travel budget with spend limits for every traveler and flexibility where you need it. Get started with Divvy’s free spend management solution.

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