While the Hawaii car rental war continues to stay to some degree between the big three car rental companies and Turo (peer-to-peer rentals), there’s more relatively good news here for Hawaii travelers. Car rental companies have started to recover from the shortage of vehicles that occurred after they sold off their fleets during Covid. Because of this, daily rates have declined from a high of up to $200 a day to in the average range of $75 a day, depending on location and season.
See our latest results after we checked rates of Hawaii car rentals in both low and high seasons this year, followed by our updated tips on how to score the best deal.
What comes next in the Hawaii car rental quagmire.
After COVID hit, there was a glut of cars in the islands that were either sold or sent back to the mainland. The big car rental companies saw Turo hurt their business big-time. They went into the mode of re-fleeting as quickly as possible, given the current overall car shortage. While re-fleeting was in the works, locals offered their cars on Turo. Now the car rental companies have been able to move into a position to better control prices and put a big squeeze on Turo and its car owners.
Turo owners and renters: heed the most recent changes.
There’s a lot of money at stake, and the car rental companies are now pulling ahead. The price difference and availability that benefited Turo has to a large degree vaporized. And, as a result, we are seeing a plethora of newer used cars that were in Turo fleets now being offered for sale in the islands. This development was inevitable.
Hawaii has and will retain some of the highest-priced car rentals in the US.
From what you’re about to see below, the islands still aren’t doing great at the moment with car rentals, although it is definitely better. What’s interesting to note in the prices we pulled below, sometimes Turo is just as expensive or more so, which means that comparison shopping is a must for the best deal.
What is the new normal going to be now for Hawaii car rentals for the rest of 2022?
Based on our latest checking today, it appears that in most cases, we can continue to expect to pay at least $60 per day or more for car rentals for the foreseeable future. And at the holidays and in the peak of summer, agencies are hoping to keep prices somewhat higher. So while prices for Hawaii car rentals have moderated, it still looks like car rentals will continue to cost significantly more than your flights to Hawaii.
Continue planning Hawaii car rentals early.
With car rentals now the second-largest expense for most Hawaii vacations, figure out the costs in advance and make reservations that can be changed or canceled without cost. By the way, the great expense in Hawaii travel is accommodations, and the third is now airfare to Hawaii.
Following are our best suggestions, from a local Hawaii perspective.
Also, get great ideas for more than 600 comments below from our visitors.
Three companies control the Hawaii car rental industry.
Hawaii car rental prices were already escalating even before 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 is 11.1%.
When will the Hawaii car rental shortage be over?
This is likely to go on for another year, from everything that we’ve heard. Why? There is an ongoing shortage of computer chips among other problems that result in it being 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, car rentals remain in relatively short supply and more costly than before Covid, as demand in Hawaii has already skyrocketed and will only continue to go higher.
Turo’s Hawaii car rental niche – at least in theory.
During Covid, Hawaii vehicle owners became Turo hosts and offer their cars for rent. Turo sometimes provides a cost-effective option, but not always. Have a look at upcoming Hawaii car rental prices below to get an idea of whether it may work for you. And please let us know your thoughts and plans.
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. As we pointed out, Jeff recently checked and was told that his insurance covered Turo rentals, but not, Craigslist car rentals.
Turo is big .
Turo is by far the largest peer-to-peer car rental company, much like Airbnb is for vacation rentals. It has a fleet of more than a half-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.
Much as happened with Airbnb, Turo, is no longer just about individuals renting their one extra car (or vacation rental in Airbnb’s case. 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. How long that will continue is unknown.
State of Hawaii tried to ban Turo.
Last 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.”
Problem with Hawaii car rental fleets parked on public streets.
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.
Updated Tips to Get Discount Hawaii Car Rentals through 2022.
Alternative car rental sources and discounts.
- Plan to re-check and if necessary re-book 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 higher until the final 90 days. That’s true in the low seasons but so in summer and at the holidays. Turo rentals may benefit most from this technique.
- Check multiple sources to compare rates and availability before booking. Look at both airport and city locations for pickup and drop-off options, especially for Honolulu rentals. To get a feel for prices, you can try checking 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. We’ve used them frequently ourselves for rentals. And they have great customer service. If you ask a question of them on this post, they may well comment.
- Try Turo. Their rates are frequently the lowest we have found. But not always. Turo is the giant peer-to-peer car rental service that is similar to Airbnb for cars. Jeff has now tried Turo rentals multiple times and they have been largely without a hitch. You do have to figure out where to meet the person, but other than that, it is simple. Turo is not always cheap. Check options, including premium insurance coverage, plus checking with your car insurance provider to see if they cover Turo rentals.
- 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. Jonathan from Autoslash follows Beat of Hawaii, and may also respond to questions.
- Look at discounts available through AAA, AARP, and Costco.
- For periods when there are limited car rentals, some visitors had been turning to Craigslist. Unfortunately, we still 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 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 financial 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 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 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 or get you an upgrade, 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.
We look forward to hearing how your Hawaii car rentals have been going!