A rental car drought in Manhattan could leave many New Yorkers stranded in the city or forced to rely on mass transit to travel to the Hamptons and the New Jersey shore this summer.
With car-less New Yorkers relying on rentals for weekend escapes in record numbers, demand for rental cars in Manhattan is expected to reach an all-time high this summer, industry insiders said.
That demand, coupled with a static supply of vehicles, is driving up the cost of renting a car. Prices are up more than 10% versus last summer and are expected to rise higher.
"Car fleets are not growing relative to demand," an auto rental consultant, Neil Abrams, said in an interview. "There aren't enough cars in Manhattan to accommodate all of the rental customers for summer weekends." Rates could climb higher between Memorial Day and Labor Day, he said, when cars are at a premium and fleet sizes small.
The high cost of Manhattan real estate coupled with the more expensive prices automobile manufacturers are charging for vehicles leaves rental car companies little incentive to add to their available fleets, Mr. Abrams said. The result: customers being turned away, car-less.
Industry experts say the cost of buying a new car for a rental company is about 40% higher than it was three years ago. The increased cost is creating a de facto cap on the number of available cars, and trickling down into the bills customers pay when they plunk down their credit cards at parking garages.
Some sedans in Manhattan cost $255 a day to rent on weekends. That includes a hefty 13% tax levied on rental cars in New York. For drivers under the age of 25, who are charged extra to rent, rates can jump to almost $320 a day for some vehicles. Dropping a car off in a different city can add another $50 to the price tag.
The Hertz Corp., one of the largest rental car companies in America, has seen most of its recent growth at its city depots from leisure customers, rather than at airport hubs from business clientele, a spokeswoman said.
Growth in leisure rentals is a positive sign for the business that in the past has thrived or dived with the ups and downs of the airline industry.
Most Manhattan rental car outlets sold out of cars for July 4 weeks ago, leaving thrifty, car-less New Yorkers desperate to see the open road wondering what to do.
For drivers willing to compromise on the quality of the cars they rent, bargains in Manhattan are still available.
Behind the Port Authority Bus Terminal, a Ford Taurus from CC Rental can be had for $79 a day, with no price hikes on weekends or holidays.
"Sometimes someone has been really badly carsick right before you get it," a regular customer, Nancy Diehl, an instructor at New York University, said. "But it's always open, and if you plead, they'll find a car for you."
Wrecks are also available throughout the city at discount rates from small, independent car rental companies. BSTB Rental, based in Williamsburg, is a family-run business that rents two worn-out Ford Escorts for $50 a day.
At rental lots in New Jersey, cars also rent for about half of Manhattan rates. The Kia Rio, for instance, which rents for $130 at the Thompson Street Enterprise Garage in SoHo goes for $80 a day at the Enterprise outlet in Hoboken, N.J.
Another option growing in popularity is Zipcar: Members who pay a $50 annual membership fee can rent a car for $10 an hour, or $69 a day.
"Unlike a car rental, it's an actual commitment," the regional vice president of Zipcar, Julian Espiritu, said. To compete with Zipcar, Hertz also recently launched a program offering hourly rentals for $12 an hour from two of its locations in Midtown Manhattan.