In answer to the OP - In my experience hire car prices have remained higher than they were, say six months ago.
We hired a Fiat Panda (cheap skate that I am) for 21 days in
October 2021 @14 euros per day inclusive of insurances etc.
A spur of the moment visit in late
November, due to super-cheap
EasyJet flights and we couldn't even hire a car from our usual provider (Payless) at all ... not a single car of any type was available due to the company needing to sell some of their stock just to stay afloat.
Cheapest deal that I could find was with Hertz was around 500 euros for 10 days for a mini-type car!
In the end, we arranged a transfer from the airport to El Cotillo for 60 euros each way and didn't really miss a car, shopping and eating out locally.
Just booked a 14 day visit in March /
April and our usual car hire company now has availability of its usual range from Fiat Panda to Mercedes cabriolet.
Of course I have opted for the Panda (cheap skate that I am) and the total cost is 245 Euros (18 Euros per day), so nearly 30% more than it was in
October of last year.
I've just checked Hertz, out of curiosity, and a small car e.g. Fiat 500 is priced at £587 for 14 days ... so it certainly pays to shop around for car hire.