Rental cars in Puerto Rico are expensive because of high taxes and fees, massive tourism demand that outpaces supply, and lack of competition and regulation allowing a handful of agencies to charge exorbitant rates.
Renting a car can be one of the most useful, yet frustrating parts of traveling. Few places demonstrate this better than Puerto Rico, where rental cars often end up costing an arm and a leg. As someone who just booked a one-week getaway to San Juan next month, believe me, I felt the sting firsthand trying to secure some wheels.
What gives with the crazy high rental car prices on the island? Well, after doing some digging between dips in the ocean and hikes through El Yunque, I uncovered the top 10 factors contributing to Puerto Rico’s premium pricing for visitors needing to rent vehicles.
Top 10 Reasons Why Are Rental Cars So Expensive In Puerto Rico
1. Taxes and Fees
Puerto Rico doesn’t go easy on taxes and surcharges for rental cars. Expect to pay over a dozen different taxes, concessions, and recovery fees that can quickly tack on over $30 extra per day to your base rental rate. That’s a hard pill to swallow on top of already elevated base pricing.
2. High Demand from Tourism
As an extremely popular Caribbean destination, over 5 million visitors flock to Puerto Rico each year, especially during the busy winter high season. With tourism continually expanding faster than the island’s rental car inventory, heavy demand allows agencies to charge top dollar for vehicles.
3. Lack of Competition
The rental car market essentially boils down to just a handful of major companies controlling most of the island’s inventory, mainly conglomerates like Avis, Hertz, Enterprise, Budget, and Thrifty.
Without healthy competition to keep prices in check, companies can set exorbitant rates to turn huge profits from travelers with few other transportation options.
4. Scarcity of Vehicles
Related to the high tourism demand, Puerto Rico’s rental agencies simply don’t have enough vehicles to satisfy all visitors requiring cars or jeeps, especially during the busy winter travel season. Agencies max out their fleets, allowing them to capitalize on the vehicle shortages with sky-high pricing.
5. High Operating Expenses
From the high taxes and fees trickling down to customers to elevated salaries, real estate, gasoline, and general operating costs, running a rental agency in Puerto Rico costs rental companies big bucks. They offset these expenses by inflating daily and weekly rental rates.
6. Vehicle Import Challenges
Getting new vehicles shipped to the islands poses logistical challenges which limits growth of rental fleets. Puerto Rico’s isolated geography coupled with laws favoring US-built vehicles makes quickly expanding rental inventories difficult, enabling agencies to overprice existing vehicles.
7. Damage Risk from Bad Roads
Years of economic hardship left Puerto Rico’s roads in awful shape, full of cracks, potholes, narrow lanes, blind curves, and hazardous mountain passages. Rental agencies rightly worry about damage, but unfairly take it out on tourists’ wallets via jacked-up rates rather than pressuring local governments to fix the crumbling infrastructure.
8. Insurance Requirements
As an attorney who vacations here often, I can tell you Puerto Rico’s car insurance requirements and risk realities are unlike any US state, resulting in pricier premium costs passed onto customers. Agencies also push expensive add-on policies to limit liability from damage or theft.
9. Weak Oversight
Government regulation of the island’s rental car industry remains relatively lax compared to the mainland US. Without strict consumer protections and pricing rules in place, agencies pretty much have free rein to charge whatever astronomical rates they want.
10. They Can!
When it comes down to it, rental car agencies overprice vehicles in Puerto Rico simply because desperate travelers will pay it. Vacationers have few alternative transportation options, while the high tourism demand and low vehicle inventories allow companies to essentially name their price with little consequence. It’s a frustrating paradigm for visitors getting gouged.
FAQS.
Are rental cars in Puerto Rico good?
Yes, the rental cars themselves are generally newer models in good mechanical shape, but agencies often don’t clearly disclose added fees that inflate daily costs far beyond base rates.
Are rental cars in Puerto Rico worth the price?
Not always – incredibly high demand coupled with limited supply means tourists often end up dramatically overpaying just to have wheels, especially in high season. Alternate transportation should be explored.
Where to buy rental cars in Puerto Rico?
The major agencies like Avis, Hertz, Enterprise, Budget and local outfits have offices across main airports, towns, and tourism centers, but also search aggregators like Expedia for full market rate comparisons before booking.