How To Save Money On Car Rental

A Hawaii car rental war is brewing between the big (3) car rental companies and Turo (peer-to-peer rentals). There's a lot of money at stake and you can be sure that the car rental companies intend to win. The question is where Hawaii visitors stand in all this mess.

It will be interesting to see how it plays out as cars are starting to arrive in bulk from the mainland. For example, over 400 cars for the rental companies will arrive on Kauai this weekend.

What's next in the Hawaii car rental war.

The big car rental companies are very aware that Turo is hurting their business big-time. They are in the process of re-fleeting as quickly as possible, and likely paying a premium to do so. Their plan is to get into a better position to control prices and put a squeeze on Turo and its car owners.

Hawaii retains dubious honor of some of the highest-priced car rentals in the US.

Kayak said that the cost of car rentals on Kauai is the second-highest in the US. From what you're about to see below, unfortunately, the other islands still aren't doing any better at the moment. What's interesting to note in the prices we pulled below, sometimes Turo is more expensive which means that comparison shopping is a must for the best deal.

Hawaii car rental shortage is unabated.

There is an ongoing shortage of computer chips we continue to hear about that makes it hard for individuals and car rental companies to buy new cars. As a result of that and the fact that Hawaii car rental companies sold off much of their fleets, traditional car rentals remain in short supply and costly, as demand in Hawaii has skyrocketed.

Turo's Hawaii car rental niche.

It starts with this. As JD Power said, "It's not very pleasant for the renter looking forward to vacation and cooped up for a year to find out they have to pay $300 a day for a Kia." This as the Hawaii travel economy is fast rebounding with record visitor numbers ahead.

Hawaii vehicle owners become Turo hosts and offer their cars for rent. Turo can provide a cost-effective option during the car rental crisis. But not always. Have a look at upcoming Hawaii car rental prices below to get an idea of whether it may work for you.

With Turo, in theory, the car owner and Turo make money and the renter saves money. One big plus is that Turo offers insurance from Liberty Mutual both for the owner and the renter, providing some level of available comfort for all. You should check, however, with your insurance company regarding Turo rentals. Jeff did recently and was told that his insurance covered a Turo rental but not, for example, a Craigslist rental.

Turo is big and growing in unusual ways.

Turo is by far the largest peer-to-peer car rental company, much like Airbnb is for vacation rentals. It has a fleet of 1/2 million vehicles and is a fast-growing multi-billion dollar company. Turo makes money by getting a share from car rental hosts and renters. Turo says hosts earn from 60-90% of bookings, depending on the insurance options they select.

It is interesting to note that Turo, however, is no longer just about individuals renting their one extra car. It has become a way for individuals to build Hawaii car rental businesses of their own. And Turo says that such fleet owners can net over $10,000 per year per car.

Enters the state of Hawaii.

This past summer, the tax people in Hawaii decided to increase monitoring of Turo. The issue here is that Hawaii requires that taxes and rental car surcharges be collected on every vehicle rented in the state. Hawaii tax said it is "along the lines of vacation rentals and everything. Everybody's trying to make a little extra money. The state says it wants to be "really, really fair with any commercial car rental operation."

One issue is that car rental companies in Hawaii have been able to pay only 0.5% tax on new cars, while we consumers have to pay more than 4% tax when we buy the same car. Turo says that is unfair and called it "a front-end sales-tax loophole."

New Hawaii car rental fleets parked on the street.

Another issue that Turo is facing is that with the lack and expense of rental cars in Hawaii, some residents have acquired virtual fleets of Turo rentals. The problem is, where are these "commercial" cars being parked when they aren't in use. Parking them on public streets may not be legal and the state and counties are receiving many complaints. Turo says that they "want hosts to be good community members and citizens." But that doesn't answer the question of where these cars can be parked.

Turo is in the process of obtaining parking permits at airports. We aren't aware of any such contracts yet with Hawaii airports.

What are the upcoming rates for car rental companies and for Turo?

Late-November to mid-December. Honolulu starts from $380 (previously $206); Turo from $203. Maui starts from $418/week (previously $458); Turo from $364. Big Island starts from $862/week (previously $354); Turo $665. Kauai starts from $487/week (previously $592); Turo $632.

Christmas/New Year. Honolulu starts from $673/week (previously $971); Turo $385. Maui starts from $1407/week (previously $1237); Turo $1253. Big Island starts from $1409/week (previously $1147); Turo unavailable. Kauai starts from $935/week (previously $1149); Turo is unavailable.

January 2022 and beyond. Honolulu starts from $584/week (previously $731); Turo $210. Maui starts from $647/week (previously $734); Turo $490. Big Island starts from $575/week (previously $758); Turo $434. Kauai starts from $585/week (was $550); Turo $644.

What is the new normal going to be now for Hawaii car rentals in 2022?

Based on our latest checking today, it appears that in most cases, we can continue to expect to pay just under $100 per day for car rentals for the foreseeable future. And at the holidays and in peak of summer, agencies are hoping to keep prices about double that. So it looks like car rentals will continue to cost significantly more than your Cheap Flights to Hawaii.

We have updated tips to reduce prices on car rentals below.

Plan for Hawaii car rental the same way and at the same time as flights to Hawaii and accommodations.

Car rentals have now become the second-largest expense for most Hawaii vacations. The first is accommodations, and the third is now airfare to Hawaii.

Following are our just updated suggestions, from a local Hawaii perspective. Also, read comments for great ideas from our visitors.

Three companies control the Hawaii car rental industry.

Hawaii car rental prices were already escalating even prior to inventory, chip, COVID, and other issues. Nearly 95% of the car rental market is controlled by just three companies, even though they market cars through multiple brands, giving the illusion of competition. Enterprise includes National and Alamo, Hertz includes Thrifty and Dollar, and Avis includes Budget.

Remember Hawaii car rental taxes and fees.

In addition to high base rates, there are the following additional mandatory fees and taxes. General excise tax (varies by island) up to 4.71%. State motor vehicle $5/day. Vehicle registration up to $1.45/day. Customer facility charge $4.50/day. Airport concession fee 11.1%.

Updated Tips to Get a Discount Hawaii Car Rental in through 2022.

Alternative car rental sources and discounts.

Plan to rebook your car rental, perhaps even multiple times, within the last 90 days before travel. That will be true for all but the most in-demand weeks. The current trend is for prices to be significantly higher until it within the final 90 days. As you can see, rentals for this fall are as low as $206 per week, but when you look out to another typically lower-priced season, after the holidays, the rate nearly triples.
Check several sources and compare rates and availability before booking. Look at both airport and city locations for pickup and drop-off. To get a feel for prices, you can try working with online travel agencies and other sites. Check the actual car rental company sites as well as those below.
Discount Hawaii Car Rental (our advertiser we learned from our readers) is an excellent resource we frequently used. We've found their rates can save significantly compared with competitors at peak times. We use them frequently ourselves for rentals. And they have great customer service. If you ask a question on this post for them, they may well comment.
Try Turo. Their rates are frequently the lowest we found. That's the giant peer-to-peer car rental service that is similar to Airbnb for cars. Jeff tried a Turo rental once, and it went largely without a hitch. It went so well that Rob now has one planned. We did have to figure out where to meet the person, but other than that, it was simple. Remember that Turo has been experiencing unprecedented demand, and clearly, as you see from our research, it isn't always easy to find availability. Nor is it always cheap. Check options, including premium insurance coverage.
Check AutoSlash, which our readers have also recommended. They too frequently comment here. Autoshash applies your loyalty programs to see if they can get a better deal. They also let you know when a price drop occurs.
Look at discounts available through AAA, AARP, and Costco, although those may be challenging at this time.
For periods when there are no car rentals, many visitors are turning to Craigslist. Unfortunately, we cannot recommend that route as we have heard of way too many problems, including insurance protection and breakdowns. However, we suggest checking multiple car rental sources frequently for sold-out dates that could subsequently become available.

Continue to protect yourself against damage, dirt, and other fees.

Damage Protection Tip: Consider using your cell phone to photograph the car before driving it off the lot. Our good friend and Beat of Hawaii reader, Colleen, take the photos with her husband standing next to the car holding that day's paper. It's also a good idea to do the same thing on return, such as when you drop the car before or after office hours. Dollar once accused us of not returning their car at Oakland Airport. When we got back to Hawaii, there was an urgent call from them. We had dropped the car off early that day before they opened, and it was sitting in their lot.
Hawaii Dirt Tip: Hawaii car rental agencies can charge a fee of $50-$100 or more for excess dirt. It is effortless in our environment to end up with mud inside or outside of the car. If this happens to you, get to a car wash before returning it to the agency. Consider having newspapers or other floor protection if you're hiking or when it is muddy.
Get a Final Receipt Before Leaving: We've learned this one too the hard way. Be sure the contract is closed out, and you have a complete and final receipt/accounting before leaving the car rental facility at the end of your trip.

Timing is everything.

Make your car reservation far in advance for travel not only during high seasons but year-round. For now, book car rentals in advance of other reservations. We'll let you know if that changes.
Once you make a reservation, be sure to check back several times to see if better deals arise before your trip. Turo rentals can be canceled up to 24 hours in advance. Even now, availability and the price are moving targets. This trick has saved us untold hundreds of dollars in car rental charges. Frequently (and more so all the time), prepaid can become the best deal (but not always). We rented a car from Hertz not long ago, where the total on first checking was $1,600. In the end, we paid $600 for the same rental by checking, canceling, and remaking the reservation, then finally asking the counter agent if they could do better (which they did). You've reported the same phenomenon in many comments.
Set a reminder to recheck car rental prices a day or two before you travel for any last-minute offers.

Know your insurance needs before you get to the car rental counter.

Additional coverage may or may not be necessary. Before your trip, check your own insurance policy and your credit card company to determine what coverage may be offered at no cost. Don't just blindly fork over an extra $10-$30/day when you show up unprepared at the rental counter. Agents may have a strong incentive to sell insurance and other upgrades.
Reader Oliver's advice:"Many credit cards offer secondary insurance, i.e., they will pay if you don't have any other insurance such as your own car insurance. But you may not want to use your car insurance, as a claim will likely drive the rates up. Some cards offer primary rental car insurance. Note that credit card car rental coverage is in a state of flux, resulting in frequently less or no coverage. Be sure to check and not assume.

Additional driver and underage fees add up and can be confusing.

Fees vary widely by company and rental location. If more than one driver is on the rental agreement, inquire when making the reservation. Costco rentals include a second driver. Many companies include spouses or business partners automatically. But work through this in advance to avoid a surprise of perhaps $10/day. We recently saw a couple with a 24-year-old driver assessed a $25/day fee for being under 25, so it pays to check and be prepared.

Car sizes, upgrades, and pre-payment options.

Car rental prices are based on demand, not size. Research different size rental cars to see what offers the best deal. Larger cars are often cheaper than smaller cars, especially now.
Many of us prefer somewhat smaller cars that are fuel-efficient, and equally important, are easy to maneuver in Hawaii. In Honolulu, a compact car will be far more nimble in tight parking lots and generally.
Do you really need GPS when you already have it on your phone?
Check into pre-payment options, but consider those carefully as 1) you will be locked in and 2) it doesn't guarantee the best rate.
Pre-paying gas generally comes with a much higher price per gallon. So check that before you drive off.

Join the rental company's frequent renter program.

It doesn't often save you money, but it will certainly save you considerable time when picking up your car. After a long flight to Hawaii, that will seem as good as cash. Many of you have reported that as well.

Determine the grace period of the contract.

Previously this was 59 minutes. So if the car was due back at noon and you had it in by 12:59, there was no charge. Now, however, some companies have no grace period whatsoever. So be careful with this one, as the excess rate on car rentals can be up to $15/hour plus taxes.

Is the price the total price?

Hawaii airport surcharges on car rentals have gone up. Often, car rental quotes don't at first show taxes and other fees. That can add up fast, so click on through to see the total bill first. And prepare for a bit of sticker shock.

Can you share your plans for Hawaii car rentals?

Updated 11/24/21.

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