State Investigates Hawaii Car Rentals Price Gouging

The state is poised to become involved in the current mess around Hawaii car rentals. Stephen Levins, who leads the Department of Commerce and Consumer Affairs for Hawaii, was quoted as saying yesterday that the issue “Certainly deserves our attention. We are going to be investigating the underlying basis for charging such great amounts to rent a vehicle.”

While data shows that there are just under 35,000 rental cars in Hawaii right now compared to 45,000 two years ago, can that alone really account for prices being as much as $200 per day or more? Two years ago, we were still getting Hawaii car rentals from just 15% of that cost.

We first learned about this from you when you looked for discounts on Hawaii car rentals and found the highest prices ever seen. We’ve checked too and were blown away.

See all of our just updated tips and strategies for getting the best deal on your 2021 Hawaii vacation and 25 suggestions below.

Car rental prices have dramatically increased.

Even in the off-season, Hawaii car rentals start at close to $100 per day from any of the major rental companies on the neighboring islands, and they up from there! You will find the same rates at Maui, Kauai, and on the Big Island. Honolulu prices ranged from somewhat lower to the same. And, off-airport rates were largely no longer available.

What happened to Hawaii car rentals?

1. Industry consolidation. Three companies manage about 90+% of all Hawaii car rentals. Those companies are Hertz (Hertz, Dollar, and Thrifty), Avis (Avis and Budget), and Enterprise (Enterprise, National, and Alamo).

Beat of Hawaii: We wonder if this isn’t the biggest part of the problem. Let’s see what the state finds in investigating the behavior of these car rental companies.

2. Demand for Hawaii car rentals often exceeds capacity at peak periods. That is a result of increases in Hawaii’s visitor count, without additional rental fleet vehicles.

Beat of Hawaii: Peak demand has always been a problem in Hawaii. The fleets were never adequate for the holidays and mid-summer.

3. Exorbitant 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%.

4. During the peak of COVID, car rental agencies starting selling their Hawaii-based fleets. We recall seeing sales from Hertz, for example, on everything from compacts to full-size trucks. Since then, the inventory has apparently not been restocked.

Beat of Hawaii: We know this to be true as we saw the vehicles for sale at highly discounted prices just about one year ago. The word on the coconut wire is that the agencies shipped cars back to the mainland as well.

Car rental prices are based on demand and not on size?

Especially now, you could be renting a car that isn’t your first choice, when you can even find one. Larger cars or trucks are often cheaper than more coveted compact ones. Read more ideas below.

Plan your Hawaii car rental just like you do for flights to Hawaii and accommodations.

Case in point, most car rentals will either be sold out or priced sky-high for the Christmas holidays and around July 4/summer travel periods. And for now, other periods will be problematic too. 

Car rentals remain the third largest expense for most Hawaii vacations, and they are fast becoming the second largest expense.  The first is accommodations, and the second has been airfare to Hawaii. Are you still on the fence about a Hawaii vacation for 2021? If so, remember that it will be an unprecedented next year for cheap flights to Hawaii. Airlines are determined to get you back in the air heading to the islands, and new routes are creating even more deals. With CDC’s guidance stating today that those vaccinated can travel without further testing or quarantine, that opens the Hawaii floodgate.

While many others have written about money-saving tricks for car rentals, the following are our suggestions, from a local Hawaii perspective:

25 Tips to Get a Discount Hawaii Car Rental in 2021

Alternative car rental sources and discounts.

• 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 of from our readers) is an excellent resource we have frequently used ourselves. At peak times, we’ve found their rates can save at least $20 per day compared with competitors.
• Have you tried Turo? That’s a peer-to-peer car rental service that is similar to Airbnb for cars. If you decide to try it (we have not), let us know your thoughts. Keep in mind that Turo has been experiencing unprecedented demand as well, and we hear it is difficult to find availability.
• Check AutoSlash. Reader Lee from MI wrote: “I’ve been going to Kauai yearly for 12 years now and never spent more than $600 for 2 weeks on a convertible. Today all the sites were over $1400, more than double then what I spent last year. Then WOW!! I never heard of AutoSlash before reading this blog…AutoSlash beat them by $600 with Avis.”
• Look at discounts available through AAA, AARP, and Costco.
• For periods when there are no car rentals available, some visitors have tried Craigslist. We cannot recommend that route as we have heard of way too many problems, including insurance protection and breakdowns. We would, however, suggest checking multiple car rental sources frequently for sold-out dates that could subsequently become available.
• A company new to us showed up with some of the lowest prices. That company is Economy Rent-A-Car. We’d never heard of them before frankly and found them on Kayak. On Trust Pilot, the company is rated 1*, while on Yelp for Honolulu, they get a 1.5* rating. On Kayak, they had a rating of 5*, while the major car rental companies all appeared to have ratings in the 7*-8* range. Do you have anything you can share from your own experience with them?

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. Colleen, our good friend and Beat of Hawaii reader takes 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 going to be 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. Otherwise, it will become tough to dispute any surprise charges.

Airline frequent flyer points may increase your rate.

• It’s always good to ask about having them included in your rental. But do find out if there’s a daily charge for the accrual, what you’ll get, and how much it will cost.

Timing is everything.

• Make your car reservation far in advance for travel during high seasons, and at least for now, for all seasons.
• Once you make a reservation, be sure to check back several times to see if better deals arise before your trip. The price is a moving target. This 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 it is not always). Not long ago, we rented a car from Hertz, 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).
• 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.
• Check Priceline. While we have never used them for flights, for car rentals, it usually doesn’t matter to us which “major agency” provides the car, and a loyalty program credit isn’t as important, so I use them occasionally.”

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 accessed 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.
• 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 you the best rate.
• Pre-paying gas generally comes with a much higher price per gallon. Check that before you drive off.

Join the rental company’s frequent renter program.

• If it doesn’t save you money (such as credits towards a future free day), it will most likely save you considerable time when picking up your car. After a long flight to Hawaii, that will seem as good as cash.

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. 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. Most car rental quotes don’t at first show taxes and other fees. That can add up to perhaps 40% or so of the total cost, so click on through to see what the total bill will be first. And prepare for a bit of sticker shock.

Do you have any other tips? Please sound off in the comments below. Mahalo.

Updated 4/2/21.