Renting Hybrids: With Supplies Tight, Prices Are High

As fuel prices remain high, more renters are turning to hybrid rental cars in search of savings. But with supply still limited and demand so high, these green cars are commanding a substantial premium, The New York Times reports.

In a recent search for a weekend rental from San Francisco International Airport in August on the Avis.com site, the Nissan Altima hybrid was the most expensive vehicle—$207.98 for a two-day trip—more than even the sporty Ford Mustang, for $161.98, or the Pontiac Vibe, listed as an “intermediate S.U.V.,” for $149.98.

Also in San Francisco, Dollar Thrifty Automotive Group charges roughly 20 percent more for the Prius than for other economy or compact cars. Hertz charges about $5 a day extra for its Green Collection, which includes 3,400 Priuses. The company says the fee covers the cost involved in making certain these cars can be reserved by make and model.

The high markups are largely a result of supply and demand. Dollar and Thrifty have 215 Toyota Prius hybrids, most of which are in San Francisco. That’s less than 1 percent of the total United States fleet. Hertz has approximately 4,000 hybrids or about 1.5 percent of its North American fleet. Avis has about 2,500 hybrids out of roughly 375,000 vehicles in its 2008 model fleet.

Another issue: hybrid cars, which are also in short supply in the retail market, cost rental car companies more to buy than other vehicles. To recoup some of that cost, car rental companies charge more to customers who rent them.

A traveler might reason that, despite the higher base rate, renting a hybrid could still end up costing less overall when gas is factored in. But this didn’t prove to be the case in a recent comparison of Hertz hybrids with economy cars by Sarah Pascarella, an associate editor at SmarterTravel.com, a Web site that offers travel advice.

A two-day trip from San Francisco to Yosemite National Park was $55 cheaper with the Hyundai Accent economy car, costing $139 round trip, including gas based on the American Automobile Association’s online fuel cost calculator. The same trip with a Toyota Prius hybrid came to a total of $194. A trip from New York City to Cape May, N.J., cost about the same when comparing the Prius to the Accent, while the economy car was about $43 less for a trip from Seattle to Olympic National Park.

“I found choosing an economy car over a hybrid was often the more economical choice,” wrote Pascarella on SmarterTravel’s Tip of the Day.

In some cases, even renting an S.U.V. can be cheaper than renting a hybrid. Take the San Francisco weekend rental on Avis.com. When factoring in gas (at $4.19 a gallon) for a two-day trip from San Francisco to Reno, Nev., the total cost to rent the Nissan Altima hybrid came to an estimated $262. The same trip in the Pontiac Vibe was $207.

Nevertheless, travelers are reluctant to book S.U.V.’s or other large vehicles that consume a lot of gas. “It’s a sign of the times,” said Neil Abrams, president of Abrams Consulting Group, based in Purchase, N.Y., which tracks the rental car industry. “They’re having a hard time in off-peak periods even giving away these things.”

The offer of free upgrades is now backfiring on rental car companies. “It used to be that many customers would purposely book a smaller car knowing that they could likely get an upgrade at the counter for free when the car they reserved wasn’t available,” Chris Payne, a spokesman for Dollar Thrifty Automotive Group, wrote in an e-mail to the NYT.

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