If most things get cheaper in real terms in times of recession, why is car hire an exception? The precise explanations given vary, but all agree that it is part of the financial structure of the sector. For years, many companies, especially the large ones, have been making very nice money (much more than out of the actual car hire business) from reselling their vehicles nearly new, no more than six months old. Easy credit was part of that model, the pillar which has disappeared, so rental companies are on one hand being obliged on sell off parts of their fleets to avoid being drowned in debt, and on the other are denied facilities to buy new vehicles. The result is a supply contraction - there are far fewer cars available for hire.

As demand is the same as or greater than it has been in recent years, the consequence of reduced supply can be dramatic. According to the Diario de Ibiza, for example, it was impossible to hire a car in the second fortnight of June.

I know this pattern is being repeated throughout the Balearics and the Costa del Sol. And I imagine it must be the same in all the more touristic parts of Spain and Portugal - Valencia, Canary Islands, the Algarve. I lack hard evidence, however, so I would especially appreciate your comments. If you are a habitual car hirer in Spain or Portugal, so much the better, but all your experiences would be helpful.

More:
NY Times: The Soaring Cost of Car Rentals
Diario Sur: Los 'rent a car' reducen marcha ante el frenazo financiero