Holiday Car Rentals See Significant Price Drop Across Popular Destinations

Travelers planning autumn holidays in 2025 are set to benefit from notably lower car rental prices compared to the previous year. Recent industry data reveals that rental vehicles have become more affordable in several major holiday destinations across Europe and North America, although prices can still vary considerably depending on the country and specific location.

For instance, on the Spanish island of Mallorca, the average cost of renting a small car for one week in October stands at approximately 229 euros. This marks a reduction of nearly 100 euros from prices recorded during the same period last year. The trend is even more pronounced on Ibiza, where weekly rental rates have dropped from around 300 euros in 2024 to just 163 euros this year.

Greece also offers more budget-friendly options for those seeking rental vehicles. In Athens, a standard one-week car hire now averages 159 euros, down by roughly 25 euros year-on-year. On the island of Mykonos, rental prices have fallen from 255 euros to an average of 197 euros per week, enabling travelers to make substantial savings.

Portugal currently stands out as one of the most cost-effective destinations for car rentals. Renting a vehicle from Lisbon for a week in the autumn costs about 148 euros, which is a significant decrease from the 228 euros charged in the prior year. This downward trend is not limited to Europe, as travelers in the United States can also find modest savings. For example, a week-long road trip in California, starting and ending in Los Angeles, now costs around 322 euros for a rental vehicle, compared to 340 euros the previous year.

This reduction in car rental prices follows a period of elevated costs experienced after the COVID-19 pandemic. During the height of travel restrictions, rental companies experienced a sharp decline in demand, prompting many providers to reduce the size of their vehicle fleets. As global travel resumed, the industry faced additional challenges due to a shortage of semiconductors, which impacted automotive production and limited the availability of new cars for rental companies. The resulting scarcity led to a surge in rental prices as supply struggled to meet the renewed demand.

Since 2023, however, the car rental market has witnessed a gradual normalization. Rental providers have replenished their fleets, and the increased supply of vehicles has contributed to more competitive pricing. This trend contrasts with the broader travel industry, where the cost of flights and hotel accommodations continues to rise year over year.

Despite the overall decline in rental prices, travelers are advised to compare rates across different regions and booking platforms, as significant differences can still exist not only between countries but also within individual destinations. Factors such as local demand, vehicle type, and rental duration can all influence the final price.

In summary, those planning to hire a car for their upcoming holidays are likely to benefit from lower costs in many of the most sought-after travel destinations. The current market environment reflects a positive shift for consumers, offering greater affordability and a wider range of options for holiday transportation.