High Demand for Car Rentals During CNY Despite 20% Price Hike Compared to 2022

SINGAPORE – Car rental and car-sharing companies are experiencing strong demand this Chinese New Year, despite higher prices compared to 2022. Four companies interviewed by The Straits Times reported brisk business, with one fully booked on Jan 22, the first day of the festive season.

GetGo’s chief marketing officer and co-founder, Johnson Lim, said 90 per cent of their fleet, which includes hybrid and electric vehicles, has been reserved for Jan 21 to 24. The company operates over 2,000 cars across more than 1,300 locations. “Our electric vehicles are so popular that they are completely booked up on Jan 22,” Lim noted.

Ace Drive, a car rental company, reported 35 per cent of its 240-car fleet is reserved for the period from Jan 18 to 27, with most customers opting for the seven-day rental package. April Koh, executive director of Ace Drive, attributed the demand to prospective car buyers delaying their purchases due to high Certificate of Entitlement (COE) and loan interest rates. “Many turn to car rentals as an interim transport remedy in the hope that COE prices trend downwards in the coming months,” she said.

Popular Rent a Car by Tribecar saw demand double compared to the same period in 2022, with assistant retail manager Annie Loh attributing the surge to the lifting of Covid-19 restrictions and the reopening of the Singapore-Malaysia border. “Demand is now similar to what we saw before the pandemic,” Loh said. In February 2022, group gatherings were limited to five people due to Covid-19 measures, which were fully lifted by October 2022. Additionally, the Singapore-Malaysia land border reopened in April 2022, allowing more cross-border travel.

ComfortDelGro Rent-a-Car also noted a 50 per cent increase in demand compared to 2022. Group chief corporate affairs officer Tammy Tan mentioned that inquiries began as early as October 2022, with five-seater sedans being the most requested vehicles. “Many Singaporeans are returning home to celebrate after border restrictions were lifted, and with no group size limits, visiting plans have returned to pre-Covid-19 norms,” Tan added.

Despite the surge in demand, car rental prices have risen due to inflationary pressures and high COE premiums. ComfortDelGro noted a 10 per cent increase in the cost of its seven-day Chinese New Year rental package for a five-seater sedan. Popular Rent a Car by Tribecar raised prices for its six-day package to between $738 and $1,488 before GST, representing a 20 per cent increase from last year, attributed to rising COE costs.

Ace Drive also raised prices for its seven-day rental package for vehicles registered in 2023. For example, a 2023 Honda Vezel five-seater costs between $1,088 and $1,188 before GST, while a similar model from 2018 is priced from $988. “The price difference is due to higher overall costs for newly registered vehicles, driven by the current peak in COE prices,” explained Koh.

Despite the price hikes, car rental companies are seeing robust demand for the Chinese New Year period, as customers seek alternatives to purchasing vehicles amidst high COE and loan interest rates.