Car rental demand surges ahead of Hari Raya, leaving some unable to secure vehicles

SINGAPORE: Demand for car rentals has picked up ahead of the Hari Raya festive weekend, but not everyone has been able to secure a vehicle.

Some operators say they have had to turn away customers, with bookings coming in earlier than usual and demand rising by up to 20 per cent.

Industry players believe the surge could have stemmed from more vehicles being locked into longer-term rentals, leaving fewer options for short-term festive demand.

FAMILIES SHARE RIDES AMID TIGHTER SUPPLY

At car rental firm Ride Now, vehicles are already fully booked, with reservations made as early as two months in advance – mostly by regular customers.

With limited availability and higher fuel prices, some could be sharing vehicles among family members, noted Mr Travis Seah, the firm’s manager.

“We do see vehicles that have more than one driver a lot more. So they might be sharing, but they are not letting us know,” he said.

“But if there are vehicles that have two or three named drivers within the family, it could be them car-sharing during this rental period.”

Mr Seah added that enquiries from first-time renters have jumped by about 50 per cent, although many were unable to secure a car in time.

LONGER-TERM RENTALS SQUEEZE FESTIVE SUPPLY

The shift towards longer leases reflects broader trends in Singapore’s car rental market. 

High vehicle ownership costs – driven by elevated Certificate of Entitlement (COE) prices – are pushing more people towards flexible rental options instead of buying cars, said observers.

With more vehicles tied up in longer-term rentals, companies say it is harder to quickly adjust their fleet to meet spikes in demand.

“It would give us a shorter time to think about how many cars we can actually buy,” Mr Seah said.

“So we need to decide fast to purchase cars to add to our fleet, so that we can cater for both the long-term and the short-term.”

The strain on fleets comes amid broader turbulence in the leasing sector, as financing pressures and a series of high-profile firm failures exposed unsustainable business models.

More than 220 car-leasing firms shut down in 2025, tightening the overall pool of vehicles available for rent.

CUSTOMERS TURN ONLINE FOR ALTERNATIVES

With traditional car rental options limited, some customers are turning to online platforms to secure vehicles, with one firm reporting a 20 to 30 per cent increase in enquiries.

Besides lower prices, customers are also looking at reviews when renting cars on platforms such as Carousell, as they consider a wider range of smaller providers. 

“Going to a larger firm might not guarantee that their deposit is secure, their contracts are honoured … because people (have) come to realise that not only big firms are reliable,” said Mr Lawrence Tan, director at car dealership Zion Auto.

“There are other firms, which are not that big, but they are equally reliable.”

DEMAND STAYS RESILIENT DESPITE RISING COSTS

Even as fuel prices rise – driven by recent spikes in global oil prices amid tensions in the Middle East – demand for rentals has remained resilient.

Some customers are opting for hybrid vehicles to manage petrol costs as convenience remains a priority during the festive period, according to operators. 

With demand expected to stay firm, early bookings will be key to securing vehicles during major festivals, they added.