There was an article in yesterday's UK Observer (30th August 09) by Harriet Meyer entitled "Keeping a cool head as cutbacks turn up the heat on holiday car hire" saying that there will be a shortage of hire cars in European hotspots and steep price rises may cause problems for travellers into September.

This appears to be very much the pattern of the summer so far, as we have been highlighting on the www.insurance4carrental.com site and our car hire excess insurance blog site. Back in July we reported the story of two people who are regular visitors to the south of France who could not rent a car at Nice. In the end through a friend of a friend they rented a car body work repair shop's courtesy car.

In August we highlighted the situation in southern Europe, particularly Spain and Portugal and on both occasions advised travellers to book their car hire vehicles early. The Observer's article was giving the same advice.

There is a shortage of car hire vehicles this year and as we said earlier this month that the credit crunch and recession have seen companies buying fewer replacement cars - their fleets are typically 30% smaller than last year.

According to Stuart Nassos, Managing Director of Holiday Autos, the largest broker of hire cars in Britain. We are Holiday Autos agents and on our self catering holiday homes travel sites have been stating clearly "Book Early".

We recently asked a car hire company in northern Europe on how they had got around the problem of not having enough cars, they replied that they had put up prices and this had solved the problem.

A lot of people have left their holiday arrangements to the last minute this year, due to the credit crunch and related problems. One of the main reasons that people then decided to arrange vacations late was the bad weather in northern Europe late in July.

After the heat wave earlier in that month, the weather went downhill and the schools broke up and there was a rush on bookings. An agent for self catering rentals in the Algarve in Portugal told us that she was rushed off her feet and could not satisfy the demand for last minute villa bookings.

Harriet Meyer's article also followed along the lines we have been suggesting this summer, if prices go up, book early and try and save costs. Do you really need a roof rack or baby seat? Purchase your car hire excess insurance in advance.

It is most important to watch out for the extra you pay to reduce your liability in the case of an accident, known as collision damage waiver or super collision damage waiver (CDW).

CDW and theft protection insurance is normally included in quotes, but the "excess" you must pay can vary widely - you could pay for the first £700 of repair costs for any damage caused while you are in possession of the car, more than the cost of hiring the car in the first place.

This damage can include damage to tyres, undercarriage and windows. The term - CDW is rather complicated and we have recently added a more detailed explanation on the insurance4carrental site. We have also suggested on the blog that if the car is full of fuel when you collect it from the car hire company, (as most are), make sure you return it full if that is your responsibility under the rental agreement. If you don't, they will make an administration fees.

Final costs that can be saved are don't get caught speeding, buying tickets for overhead tolls like the M50 near Dublin, or the London Congestion Charge and not buying parking tickets. In the car hire contract you will be responsible for paying them and what is more, the car rental company retains the details of your credit card, so these charges can be deducted after you are back home.

It is available to get the car signed off by the car hire return check in staff when you return the vehicle. Don't throw the report away or the original contract because you got be charged for a speeding, parking or toll fine a couple of months later and in fact you were never in that area. There are times were the wrong car registration details are recorded and the registration is very similar to that of the car you rented, but not the same.

As the main holiday season draws to an end in September 09, hopefully the shortage of vehicles problem will decline. It will be interesting to know what the car hire companies will do in 2010. Will they increase their fleet sizes again? Will they retain older cars from 2009, or will they see how world economies are improving and take appropriate steps then?

© Philip Suter of jml Property Services August 2009