Why is car rental in Europe so expensive?

Holidaymakers face soaring car hire costs as shortages drive up prices. The cost of renting a car in European holiday destinations has almost doubled in the past three years, and experts predict prices will remain high as global shortages mean car hire firms are paying more for new vehicles.



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The cheapest country to rent a car is Poland, where car rental prices start from 3.97 EUR per day or 27.82 EUR per week.

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Car rental rates in Europe vary greatly based on your pick-up city and the time of year your are booking. Travelers can find rates for compact vehicles in Ireland as low as $5 a day or $12 a day in Italy. Full size vehicles and SUVs could cost as much as $20-25 a day in some cities.

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Car hire prices soared in 2022 after companies sold off stock during the pandemic as demand collapsed. When business returned after restrictions were lifted, companies found it hard to replace the vehicles owing to a global shortage of semiconductors.

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Out of all the popular cities in Europe, Lisbon is the cheapest city to rent a car in at just $3/day.

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Car rental rates were very high in Italy when I checked in August for September. $1875 for a compact in Italy vs $825 in France for similar car. Most credit cards also do not cover rental car insurance in Italy. Drop off fees may be less than the increased costs of renting in Italy.

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Renting in Germany is usually cheaper - but if you drop it in a different country - there is usually a drop-off charge - which may be significant. (Shop around before you organize your rental). Also - Alsace is in France and Geneva is in Switzerland. As nytraveler says, Germany is usually the cheapest option.

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By contrast, the cheapest place to rent a car is Montenegro, where it is only $59.40 per week, followed by Serbia where it is $82.39, Croatia at $107.47, Bosnia and Herzegovina at $113.32 and Guatemala at $157.03. Australia ranks at number 74 with a week's worth of car hire costing $715.94.

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Can I take my rental into another country? In Europe, car hire companies typically allow renters to drive their vehicles across international borders into neighbouring countries. However, you may have to pay a cross border fee in order to drive the car abroad.

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Having a car provides a lot of freedom and convenience when traveling through Europe. You can travel at your own pace, stop frequently to take in the view, and get to some places that are difficult to reach with public transportation.

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