Aussie rental car price gouge: How much you’ll pay now

Aussie holiday makers are set to fork out thousands of dollars for a rental car – and that’s if they can get one. See what you’ll pay and how to save on car rentals.

Daksh Juneja pictured with his Tesla that he rents out on new car share app Turo. Picture: Sam Ruttyn

Soaring rental car prices for the holiday period are pushing cash-strapped travellers to try new ways to find a ride away from home.

New car supply shortages and increased demand for travel have placed enormous demands on car rental agencies. Thrifty has “no cars available” in Melbourne in the week surrounding Christmas. Hobart rentals are fully subscribed in the same period through Budget, Hertz, Thrifty and Sixt, with customers asked to pay more than $2000 to secure a week in a small hatchback through Avis or Europcar. A family four-wheel-drive in the same period, from December 23 to 30, costs about $4000.

New businesses are attempting to cash in on the high demand – and prices – of conventional car rentals. Toyota’s Kinto car-rental arm has taken thousands of bookings from people looking to undercut dealers, and American start-up Turo launches on Wednesday as a way for people to loan out their cars in a similar fashion to Airbnb.

US carshare giant Turo launches in Australia on Wednesday. Pictured is manager director Tim Rossanis. Picture: Supplied

Perth father Simon Mitchell turned to Kinto after he was put off by the near-$2000 cost of a car rental for a few days in Cairns.

“The Kinto booking, not factoring the included petrol and insurance, was about half the price of the equivalent Cairns-based hire car companies,” Mr Mitchell said.

Toyota’s rental arm invites people to book loans of vehicles using an app, and collect the car of their choice at the nearest Toyota dealership.

Kinto general manager Mark Ramsay said the service “is really building up”.

“We are seeing increased demand as we head toward the Christmas and new year period,” he said.

“There are still cars to be had, but people should plan ahead to avoid disappointment.”

While Kinto’s locations are less convenient than airport-based hire cars, it is usefully cheaper than the competition, and prices are the same across Australia. Avis rental customers looking for a Toyota Kluger family SUV will pay $1893 for a week in the Gold Coast, $2396 in Melbourne and $3613 in Tasmania for the same car across the same dates. Kinto charges $647.50 for the same car for seven days, plus 30 cents per kilometre travelled – driving 100 kilometres per day could leave customers more than $1000 better off than a conventional rental.

Daksh Juneja pictured with his Tesla that he rents out on new car share app Turo. Picture: Sam Ruttyn

Business analyst Daksh Juneja, 26, rented a car through peer-to-peer car sharing service Turo during a trip to Washington DC.

An electric car enthusiast, Mr Juneja was quick to list his Tesla Model 3 with Turo when the service announced plans to expand to Australia.

Similar in nature to Uber Carshare – formerly known as Car Next Door – Turo hopes to woo customers with lower prices than conventional rental groups, as well as a wider variety of vehicles.

“I’ve always wanted a Tesla. When I was looking for the car I was researching ways to help pay for the car,” Mr Juneja said.

“From a sustainability point of view it makes sense – you can only use a car when you need it. And if you have an electric car it’s better for the environment.”

Mr Juneja’s Tesla will be available to rent for $199 per day when Turo launches this week, undercutting Sixt by just $4 per day.

Turo Australia managing director Tim Rossanis. Picture: Supplied

Turo Australia managing director Tim Rossanis said customers can set their own prices, turning unused cars into a lucrative side hustle.

“The idea is that most Australians have a personal vehicle … an asset sitting in your driveway a lot of the time, depreciating,” he said.

“This is the ability to turn that vehicle into a business and earn extra cash.”

Turo data suggests the global average income for hosts who list their car for rental year-round is around $19,000.

Unlike rival services that have restrictive cost caps on cars available to rent, Turo hopes to attract owners of high-end machines happy to loan out their wheels for a weekend.

“We’re seeing a tendency for people with high value cars listing their cars,” Mr Rossanis said.

“We have plenty of Teslas, Mercedes, BMW and Audis. But at the same time we’re seeing a lot of regular cars as well.

“We’ll come in meaningfully cheaper than traditional car rental.”