Atlantic Canada car rental market hot, but could cool soon: experts

If you’re planning to rent a vehicle in Atlantic Canada, you may want to get on it fast. The rental car market may cool off later in the fall but for now experts say the prices are still high and the demand is higher.

“Rental cars continue to be more expensive than we are traditionally used to. It’s not as bad as it was at the peak during COVID, but it is still higher,” said Julia Kent with CAA Atlantic.

Tourism Nova Scotia says despite not having all the visitation statistics for 2024, they have received feedback from visitors about the challenges tourists have faced finding rental cars, especially during the busiest summer months.

“Many rental car companies downsized their inventory during the pandemic to stay afloat, then faced supply chain issues as they tried to rebuild inventory and we hope that the rental car marketplace continues to expand its fleets to better meet the growing demand,” said Amelia Jarvis with Tourism Nova Scotia.

Vim Manuel, a traveller from Calgary, experienced this struggle firsthand when moving with her daughter into Dalhousie University this fall. She couldn’t believe the price she was quoted for a rental SUV.

"It's really insane. This year we spent $2,900 on a vehicle for 15 days,” said Manuel.

Experts say a key reason for the high prices is the supply can’t keep up with the demand.

“I really do think it's because of inventory. There is just not enough cars as there are people looking for rental cars,” said Kent.

Although tourists say the prices are already quite high, if they get stuck booking last minute, the trip doesn’t seem worth the price. A couple travelling from Ontario said they rent vehicles frequently with work and if they don’t book ahead, the prices get out of control.

“We’ve traveled lots of places where we haven’t booked a rental vehicle ahead of time and we went to book and I was in tears. I can’t pay that much for a rental car,” explained Terry Daly, a tourist visiting from Ontario.

Supply issues

Despite all rental car companies battling the supply issues, smaller local companies are struggling the most. One local company in the Halifax area, Seyara Car Rental, says they are running out of cars.

“The problem is real. People are facing big, big problems finding car rentals,” said Said Charafeddine, Seyara Car Rental owner.

Charafeddine said this was his shop’s second summer in Halifax and despite the high cost to run his business, the high demand keeps them afloat. He said with their location close to the harbourfront, the cruise ship travellers increase their customer base.

“The demand is higher. We have a major thing in Halifax that’s different. We got the port that’s receiving 180 cruise ships last year and this year its receiving 204, the cruise ships create a lot of demand because suddenly you have thousands of people and most of them or at lest some of them want to rent a car,” Charafeddine said.

Halifax is one of the more expensive cities in Canada to purchase rental cars.

"A $100 car in, let’s say Montreal, would be $130 here in Halifax,” said Charafeddine.

One traveller from the United States, Ron Rose, said he feels the buses hold the monopoly in Halifax. He emphasized how hard it is to tour Nova Scotia without a rental car.

"There's no accessible rental cars. So if you wanna go out, you're kinda forced to use the buses,” he said.

He noted if rental cars were more accessible, it would greatly benefit tourists. Charafeddine agreed, saying they are 100 per cent booked and if he had 30 or 40 per cent more cars in the fleet, they would be booked as well.

"I honestly get tons of messages from people saying they’re cancelling their trip because there are no car rentals,” Charafeddine said.

He expressed something needs to be done to fix this issue to prevent car rental struggles from impacting tourism to Nova Scotia.