UK car rental market booms in 2021 with peak to come over Christmas

The sector is up 144 percent compared with a 2020 blighted by Covid-19.

By: James Fossdyke

Dec 22, 2021 at 4:20am ET

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The UK car rental market has more than doubled in 2021 compared with 2020, according to a leading car finance organisation. Finance provider Volkswagen Financial Services says car rentals are already up by 144 percent this year, with the global new car supply shortage having an impact, as well as the coronavirus pandemic.

Volkswagen Financial Services says it has seen the meteoric rise across its rent-a-car bookings in November, when compared with the same period in 2020. Admittedly, last year was severely impacted by the coronavirus crisis, with the public asked to reduce mixing over the Christmas period, but the finance firm says it expects an even steeper rise during December.

That, the firm claims, is partly down to increased “festive demand” for larger vehicles as customers plan family trips, and an increase in van rentals to meet home delivery demands. The company also says the semi-conductor shortage is limiting the supply of new vehicles to the UK market, making many Brits turn to rental vehicles that are either larger or more reliable than their existing vehicles.

However, according to the firm’s data insights team, those who don’t own cars at all are most likely to make use of a rental vehicle over Christmas and New Year in order to visit family and friends who live further afield. That said, the company admits this surge in demand will depend on whether the government imposes any social distancing restrictions or even lockdown measures as the omicron variant of Covid-19 continues to surge across the country.

Also seeing a winter surge is the van rental market, which Volkswagen Financial Services attributes to people relying on online shopping to purchase Christmas gifts. The van market is also being impacted by the global chip shortage, and the company says rental vehicles are helping fleet operators grow their ranks to meet the swelling demand.

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Another trend marked out by Volkswagen Financial Services is the growth in online bookings, which were up by 220 percent in November compared with the same month last year. The company says that’s partly down to “positive changes” to its booking system and the growth in online ordering during the pandemic.

“This substantial growth in the rental market can be attributed to a number of factors around a shortage of new vehicles, increasing ease to book and for lots of people, a new way of travelling,” said Mark Forton, the director of mobility services at Volkswagen Financial Services UK. “People who perhaps have no vehicle or run smaller vehicles year-round are hiring larger, more reliable vehicles to fulfil their Christmas plans of visiting friends and family – which will hopefully be very different from last year’s muted festive season.”