Why car rentals in Canada are so expensive in 2022

October 15, 2022

If you’ve been looking at renting a car for a vacation this summer in Canada or even abroad, you may have noticed that prices skyrocketed… And while knowing why won’t help you find a rental car right away, having the background information will provide some helpful tips for your trips. 

Rental car shortage in Canada

In short, there is a lack of inventory all around — new cars, used cars, and therefore rental cars. Rental cars are fully sold out for most of this summer and if you miraculously find one, you will see a hefty price tag, often starting at $100 per day or even $150 per day, when in the “before times” it was reasonable to find a car for $20 or $50 a day if you were booking it for a week, for example. 

Supply chain delays affecting new car production

You’ve probably heard of the infamous “supply chain delays” affecting everything from IKEA kitchens to new fridges, and yes, cars. 

For technology specifically, the global microchip shortage is to blame — it is stalling production and automotive factories still can’t get back to pre-covid levels of mass manufacturing. Reduced production at the beginning of the pandemic rerouted semiconductor production to other applications and when the demand spiked, the factories could not cope, resulting in sky-high prices for the chips that are available.

New and used cars skyrocketing in prices, affecting car rental market

The automakers did not expect the demand to skyrocket as much as it did in 2021 and 2022, with offices calling employees back, people buying new cars, and resuming travel. The new car inventory quickly got depleted without being able to be replenished as fast. Simply speaking, after new cars ran out and increased prices, folks turned to used cars, also driving up prices and demand. 

Now, the car rental companies have less inventory coming to them from new and used car dealerships and they are buying one or two units at a time at local dealerships and the flow of new cars coming to them is not the same as it was before. 

Expensive car rental prices in 2022

The rental car shortage is even more dire thanks to reduced inventory at the beginning of the pandemic — with everyone at home, car rental companies dropped much of their fleet to keep costs low in the downturn times. But consumer demand soared in the summer of 2021 with renewed road trips around the country and car rental companies simply could not get much of their inventory back in time. 

To get a rental car for your summer or fall trip, make sure to look as far in advance as possible to give yourself plenty of time to secure a vehicle. And, budget your adventure so you can shell out more bucks if you need to. It’s probably worth it if you are heading into remote parts where you need a rental car! If not, stick to the train or the plane and then take public transport at your destination or walk.