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'20% increase in price compared to 2022': High demand for car rentals during CNY despite price hikes

'20% increase in price compared to 2022': High demand for car rentals during CNY despite price hikes
Some potential car buyers have put their plans on hold amid high COE and loan interest rates, and this may be a factor behind the rise in demand for car rentals.
PHOTO: The Straits Times

SINGAPORE – Car rental and car-sharing companies here are seeing brisk business during this Chinese New Year period, despite consumers having to pay more than in 2022.

Four companies The Straits Times spoke to said their services are in high demand, 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 the car-sharing company's fleet, which includes hybrid and electric vehicles, has been booked from Jan 21 to 24. The company has more than 2,000 cars in more than 1,300 locations islandwide.

"Our electric vehicles are so popular that they are completely booked up on Jan 22," he said.

Car rental company Ace Drive said 35 per cent of its 240-strong fleet is booked from Jan 18 to 27, with 33 per cent of the bookings for the company's seven-day rental package. The rest of the bookings are for the five-day package. Both packages begin between Jan 18 and 20.

The company's executive director April Koh attributed the demand to various factors. For example, many potential car buyers have put their plans on hold amid the current high certificate of entitlement (COE) and loan interest rates.

Thus, she said, "many turn to car rentals as an interim transport remedy in the hope that COEs trend downwards in the coming months". 

At car rental company Popular Rent a Car by Tribecar, demand has doubled for this Chinese New Year, compared with the same period in 2022.

"We believe that this is mainly due to the lifting of the Covid-19 measures – no visitation limits and the opening of the Malaysian border," said the company's assistant retail manager Annie Loh, adding that the current demand is similar to that of pre-Covid-19 times.

During the Chinese New Year period in February 2022, groups of up to only five people were allowed for social gatherings, and each household could have only up to five unique visitors a day. The measures, in place because of the pandemic and gradually tweaked over time, were fully lifted in October 2022.

Land borders between Singapore and Malaysia were fully reopened in April 2022.

Car rental and leasing company ComfortDelGro Rent-a-Car has observed a 50 per cent increase in car-rental demand ahead of this festive season, compared with the same period in 2022. It offers various cars such as five-seater sedan models and luxurious car brands like Mercedes-Benz and BMW.


ComfortDelGro's group chief corporate affairs officer Tammy Tan said the company began receiving inquiries as early as October 2022 for this festive period, mainly for the rental of the five-seater sedans.

"This is largely attributed to more Singaporeans returning home to celebrate this festive occasion after the lifting of border restrictions. As there are no group size limits for gatherings this year, most families are likely to carry on with visiting plans as per what they did before Covid-19," she said.

The company noted the high demand despite a slight increase in car rental prices due to inflationary pressures and high COE premiums, Ms Tan added.

For example, its seven-day Chinese New Year car rental package for a five-seater sedan costs about 10 per cent more than in 2022. It did not comment on the cost of the package this year.

Popular Rent a Car by Tribecar has also raised the pricing of its six-day car rental package to between $738 and $1,488 before goods and services tax (GST) from Jan 20 to 26. 

"It is a 20 per cent increase in price compared with the previous year, due to the increase in (COE)," said Ms Loh. 

Ace Drive's price for its seven-day car rental package from Jan 18 to 27 for vehicles registered in 2023 has also gone up. For example, a five-seater Honda Vezel registered in 2023 costs between $1,088 and $1,188 before GST. The package for a similar model registered in 2018 is from $988.

"The price difference is because the current peak in COE prices translates to much higher overall costs for newly registered vehicles and therefore higher rental rates," said Ms Koh.

This article was first published in The Straits Times. Permission required for reproduction.

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