The rental car business doesn’t change much from year to year—you get the same general types of car, you face the same fueling challenges, and rental companies’ collision waivers remain way overpriced so you find alternatives. This year, however, I see some real changes.
1. Changes in the fleet. Currently when you start to look at rentals, you see many SUV options in the mix, often at prices near the lowest. You see comparatively few “compact” and “economy” models, with intermediate and standard sizes priced at near the lowest rates available.
This isn’t surprising. Success of the rental car business depends on the resale value of cars rented for no more than a year or two, and today’s fleet buyers see their used SUVs as a good bet for high value in 2025 and 2026.
Overall, I think that’s a benefit to consumers. In general, SUVs provide a better option for families than a sedan, with their comparatively roomier rear seats and lots of cargo/baggage space. And a small SUV can provide relatively good fuel economy.
2. Electric uncertainty. What you don’t see in a rental car search right now is a range of electric vehicles. A busy airport might show 50 to 100 different model/company options for conventional gasoline and diesel engines and maybe 10 to a dozen electrics. Most of those are pure electrics, including Teslas, and you hardly see any hybrids. A small airport, such as my home field at Medford, Oregon, may show no electric options at all.
The electrics you do see are usually expensive. When I checked a bunch of airport rentals around the country, I found the least expensive electric rates are anywhere from $100 a week higher than rates for a small SUV to more than double.
I find that a bit puzzling, given the overall push to electric vehicles—some of it mandatory—and their general appeal. I guess the fleet buyers don’t want to be selling used full electrics in 2025 and 2026. In some ways, I get it: An electric car battery has a limited life, and replacing a worn-out battery pack is very expensive. Nobody yet knows how the resale values will hold up. But given that uncertainty, I really can’t see why the rental companies are ignoring the hybrid option, especially the plug-in hybrid, as a hedge against over reliance on electrics.
What I do get is that renting an electric vehicle requires a bit more planning and narrows your travel options. Basically, you get the car with a 70 percent to 95 percent full battery pack, and if you don’t return it at least that fully charged the rental company will hit you with a stiff recharging fee. If you’re moving around at all, you need to be able to locate appropriate charging stations wherever you are—and as far as I can tell, the typical hotel or motel hasn’t yet installed a bank of chargers in its parking lot. That means when you start to plan a trip, you need to decide which kind of electric car to rent first, because different cars have different systems and you want to know where to find appropriate charging stations with rapid charging for your car model before you plan hotels. Then, you need to find hotels with the right charging system onsite or nearby.
Maybe the net result—at least for a few years—will be that people buy more electric cars for personal use around their homes but rent gasoline models when they travel or for road trips. Right now, I’m glad I don’t have the responsibility of buying thousands of vehicles for resale in a couple of years. I wonder if rental company executives feel the same way.
3. Otherwise. Nothing else has changed much. You still need collision insurance, especially with an expensive electric model, and the best way to get it is through a credit card with primary coverage or a third-party insurer. And you still pay a premium at airport and rail station rental locations.
