Save hundreds on your holiday… by cancelling car hire and booking again

Holidaymakers could save hundreds of pounds by cancelling and rebooking their rental car, after prices in popular holiday destinations suddenly plummeted. Car hire prices surged earlier this year due to a rush of travellers booking trips, coupled with a lack of supply because rental firms sold off many of their vehicles during the pandemic. 

In some locations, car rental costs had more than doubled since 2019, according to iCarhireinsurance.com, a provider of car hire excess insurance. 

However, prices are starting to fall in countries such as Spain, Italy and the US as car hire companies receive new car deliveries, boosting supply. Flight cancellations and the cost-of-living crisis have also dampened demand, leading some rental companies to cut prices. 

Driving down costs: Hannah Linder and family, inset, saved £316

Broker Clarify Car Hire says that if you had booked a Hyundai i10 in June for a week’s holiday in Alicante later this month, you would have paid £262. But if you booked the same car now, you would pay just £86. 

A family picking up a Citroen C1 from Catania for a week in Sicily at the end of this month would have prepaid £866 in June. They could cancel and rebook it now for £510, a 41 per cent saving. 

Meanwhile, someone hiring a Mustang Convertible in San Francisco could save 48 per cent by cancelling a reservation made in March and rebooking at today’s price. Charges have also fallen for autumn getaways. Sara and Glenn Burns, from Marlow in Buckinghamshire, saved £458 by cancelling and rebooking their car hire for a two-week trip to Seville in October. In June, they forked out £1,005 for a Toyota C-HR Hybrid, but the price they rebooked at was £547. Sara, a 61-year-old finance manager for a charity, says: ‘I’d urge anyone who has booked a holiday car hire to check whether they can save money by cancelling and rebooking.’ 

Most companies – including Europcar, Budget and Avis – allow free cancellation up to 48 hours before pick-up. At Enterprise, you’ll need to cancel at least three days beforehand to get a full refund, otherwise there’s a £40 fee. 

It’s usually easy to cancel online, with the refund paid on to the debit or credit card used for the booking. Some suppliers refund customers within a couple of days, while others can take up to 20 working days. If you paid in a different currency, watch out for any foreign exchange fees levied by your bank. But depending on the saving you would make by rebooking at a cheaper price, any bank fees or car hire cancellation charges could be worth paying. 

Mark Bower, managing director of Clarify Car Hire, says: ‘We have never seen these extremes in car hire pricing before. 

‘In January, when Omicron gripped Europe, some prices were being offered at bargain-basement rates. Then, demand rushed back and, by May, car hire companies were setting prices at sky-high levels, unsure whether they were going to receive a new fleet of cars to service their forward bookings. This was due to a shortage of semiconductor car chips, which delayed car production. The market is now settling down, and a middle ground is being found.’ But prices have not fallen everywhere. 

Car rental costs for next month in locations such as Dublin, Lyon in France, Faro in Portugal and Almeria in Spain have risen since the spring, according to Clarify Car Hire. This could be due to increased demand and delays in new car deliveries. Holidaymakers may also struggle to get a cheaper deal if hiring a seven or nine-seater. 

Bower recommends that customers regularly compare prices – including with other rental firms – as their trip approaches to see if they can get a better price. Hannah Linder, from North London, is travelling to Perugia, Italy, for a family holiday at the end of this month and has saved €375 (£316) after cancelling and rebooking her rental car twice. 

She initially paid €1,169 (£985) for a Fiat 500L for the nine-day trip, with comparison website DoYouItaly.com in June. Hannah checked prices earlier this month and noticed the same car was available for €909, so took advantage of the free cancellation policy and rebooked at the lower price. Just days later, the price dropped to €794, so the mother-of-two cancelled and rebooked for a second time.

Hannah is considering going through the process again, as every time she looks, the price has tumbled further. Alternatively, she could upgrade to an SUV, which now costs the same as the smaller Fiat 500L. ‘The only additional fees I paid were the currency charges by my credit card provider, but these were about €11, so cancelling and rebooking was really worth it,’ she says. 

Ernesto Suarez, chief executive of iCarhireinsurance.com, says it’s crucial travellers don’t cancel their car hire booking before securing one at a better price. ‘Inventory may still be tight with some suppliers in certain destinations, and the last thing you want to do is be left without a car.’ 

Clarify Car Hire’s Bower adds: ‘If you have plans to rent a car, book as soon as you can, and then check back to see if you can better the price. Looking further ahead, you can book a week’s car hire next June in Faro for as little as £145, Malaga from £154 and Chania in Greece from £224.’