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Why is car hire so expensive in Tasmania?

What does the hire car shortage mean for your trip to Tasmania?

Jessica Pilon-Summons

If you are considering a post lockdown holiday, you are not alone. Australia is experiencing a domestic travel boom with unprecedented demand for hire cars and local accommodation.

Why is there a shortage of hire cars in Tasmania?

After months of lockdowns and border restrictions, Aussies are ready to embrace travel. With international travel still largely uncertain many are opting for local and interstate trips. This is creating an increased demand for local hire cars.

Tasmania has been particularly impacted by the hire car shortage.

Public transport is limited in many parts of Tasmania, creating more demand from tourists and locals alike to use cars to get around.

As reported by ABC News, Tasmanian hire car companies sold off around half their fleet during the state's border closure in 2020.

Since borders have reopened, hire car companies have struggled to rebuild their fleets as a shortage of manufacturing materials has made it more expensive to manufacture and purchase cars. This shortage has had a flow on effect to the tourism industry, with many visitors cancelling their trips due to a lack of hire car availability.

The Tasmanian Government stepped in, offering a $1,000 Hire and Drive Reimbursement grant to encourage Tassie locals to consider sharing their cars. Car Next Door was one of two credited car share programs to be included in the grant, allowing Tasmanian Car Next Door sharers to be eligible to apply.

Are rental car prices still high?

If domestic travel is on your to-do list this silly season, you may be wondering if you will still face the high costs associated with the national hire car shortage.

The answer: it depends!

If you look at traditional hire car options, it’s more likely that you’ll encounter the higher prices associated with the hire car shortage. However, if you look at non-traditional car share options like Car Next Door, you are more likely to find some more affordable options as well as a larger range.

Borrowing from a local also means having cars available to you in a range of locations. Car Next Door has cars available across Tasmania, including in Devonport, Sandy Bay, Hobart, Moonah and Launceston.

We looked at a popular road trip scenario to compare.

Hobart to ​​Launceston

For this trip we’ve looked at:

  • 7 days away, commencing 27 Dec 2021
  • 450 kilometres (Hobart to Launceston and back, plus some extra driving around)
  • Premium cover as it’s a longer trip
  • Medium-sized car (like a Toyota Corolla)

Availability: 10 hire cars were available on vroomvroomvroom.com.au in this period. 13 hire cars were available on Car Next Door.

Rental car Car Next Door
Time $2476.12 ($353.73/day) $1120 ($160/day)
Fuel/distance* $63.00 $202.50
Booking fee $0.00 $6.99
Basic cover (mandatory) $0.00 $112.00
Excess reduction $152.06 $126.00
Total $2691.18 $1567.49

Savings of $1,123.69

Fuel costs were calculated based on 45c/km with Car Next Door, and 14c/km in a rental car, assuming $1.40/L for fuel and consumption of 10L/100km. We have calculated the cost for a rental car at $353.73/day (the average daily price of a Toyota Corolla Hatch in the week of 27 Dec 2021 to 3 January 2022 as advertised on vroomvroomvroom.com.au on 22 Nov 2021) and an equivalent Car Next Door Toyota Corolla at $160/day.

Note re excess reduction: the hire car’s premium cover reimburse you for up to $10,000 for fees paid to the rental provider if your vehicle is damaged or stolen. Car Next Door’s premium cover reduces your excess to $500 and provides basic roadside assist.

Are there any rental cars for my holiday?

The good news is that there is no need to cancel your road trip just yet! While Australia is still very much in the grips of a hire car shortage and maybe for some time. Car share alternatives like Car Next Door mean that you can rely on your national neighbourhood of sharers to have access to a range of cars at affordable prices.  

Planning a trip to Tasmania? Check out your car share options.

Hero image by Matt Palmer on Unsplash


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