Driving away from a rental car agency in a shiny new vehicle feels like the start of an adventure.
With non-essential travel paused because of the pandemic, many of those adventures will have to wait. But for those still in need of a temporary vehicle — or planning a future vacation — it pays to know how rental car costs work.
Rental car agencies impose all types of charges. Some you can avoid, and others you simply must pay. Many of them won’t be included in online quotes, the Federal Trade Commission warns. Special features and perks may make driving more enjoyable or manageable, but they can also take a chunk out of your wallet.
That’s why finding a great car rental deal involves more than finding an affordable day rate. You need to know the ins and outs of rental car shopping, understand the fine print of a rental car contract, and avoid common mistakes that can jack up the final price.
Factors That Affect Car Rental Rates
- Vehicle size: Rental car agencies often price vehicles according to size or make. They use terms such as “large sedan” or “small SUV” to help you easily choose the size automobile you need. A selection may also include verbiage such as “five-passenger SUV” or “extra capacity large SUV” to indicate how many passengers or the amount of cargo you can transport.
- Make, model, and special features: A vehicle’s brand can impact its rental cost. Luxury automobiles, four-wheel-drive vehicles, and convertibles usually rent for higher rates. For instance, renting a Cadillac XTS typically costs more than a Chevrolet Malibu, even though they are about the same size.
- Location: Base rates can vary by location, even when renting the same make and model of the vehicle from the same national agency. Fees and tax rates also vary by city and state.
- Fees: Car rental agencies charge a variety of fees. For example, an agency may charge a concession recovery fee, which offsets the company’s expenses for operating in an airport or hotel. Other common charges include airport security, customer transportation, and security fees. Many rental agencies provide definitions of charges on their websites.
- Taxes: Rental car transactions are subject to local and state sales taxes. But in some locations, you must also pay a highway use tax or tourism tax levied by local or state laws.
- Insurance: During the online reservation process or at the rental office, the agency will offer you various insurance options similar to a standard auto insurance policy. Some coverages cover the vehicle, while others provide medical expense and liability protection. The coverages, which you can choose to purchase or decline, are charged at a daily rate.
- Driver’s age: Many rental car companies don’t rent to drivers under 20. However, some follow minimum rental ages established by state laws and rent to drivers as young as 18. Some rental car companies levy a surcharge for drivers ages 21 to 24. An agency may also impose restrictions on the type of vehicle drivers aged 21 to 24 can rent.
- Additional drivers: If you want to add an additional driver to your rental contract, like a partner, spouse, or travel companion, the rental agency may impose a fee, usually charged per day. Additional driver fees, if any, vary by company and state.
- Extras: Agencies offer a wide range of optional features for your rental car, which may include a child safety seat, fuel refill waiver, mobile GPS, roadside assistance, a road toll plan, or satellite radio.
Pro Tip
Book early or last minute, depending on when you’re traveling. You can find better deals if you book early for peak season travel dates and last minute for off-peak times.
Average Cost Examples
On February 22, 2021, the prices below were quoted for rental dates of March 3 through March 8, 2021. We searched for each company’s lowest-priced vehicle for a large sedan or full-size car.
New York City (pickup and drop off at John F. Kennedy Airport)
| Car Rental Company | Hertz | Enterprise | Budget |
|---|---|---|---|
| Base cost for five-day rental | $362.15* | $364.20 | $320.99* |
| Airport concession recovery fee | $42.26 | $40.46 | $35.66 |
| Concession recovery fee surcharge | $2.50 | $2.50 | $2.50 |
| Transportation fee | $12.50 | N/A | $12.50 |
| Taxes | $85.47 | $85 | $77.58 |
| Total costs | $494.90 | $492.16 | $449.23 |
| *The Pay Now base rate for this vehicle was $271.60, a savings of $90.55. | *Budget gave us the option to pay when making the reservation for a base rate of $283.99, a $37 savings. |
Chicago (pickup and drop off at Chicago Midway Airport)
| Car Rental Company | Hertz | Enterprise | Budget |
|---|---|---|---|
| Base cost for five-day rental | $399.17* | $326.47 (one week rate) | $314.99* |
| Airport concession recovery fee | $45.45 | $36.91 | $36.58 |
| Vehicle license recovery fee and customer facility charge: | $9.90 | $29.50 | $38 |
| Taxes | $119.20 | $80.27 | $79.57 |
| Total costs | $573.72 | $473.15 | 469.14 |
| *The Pay Now base rate for this vehicle was $284.50, a savings of $114.67. | *The agency offered us an even better base rate of $251.99, a $63 savings if we paid online when making the reservation. |
Los Angeles (pickup and drop off at Los Angeles International Airport)
| Car Rental Company | Hertz | Enterprise | Budget |
|---|---|---|---|
| Base cost for five-day rental | $306.24* | $375 | $271.99 |
| Airport concession recovery fee | $34.78 | $42.57 | $31.16 |
| Vehicle license recovery fee and customer facility charge: | $51.85 | $53.15 | $53.50 |
| State tourism assessment | $10.72 | $13.13 | $9.51 |
| Taxes | $33.04 | $39.67 | $29.61 |
| Total costs | $436.63 | $523.52 | $395.77 |
| *The quoted Pay Now price for this vehicle reduced the base rate by more than $16 per day, which would reduce the cost of a five-day rental by $80. |
How to Get the Best Deal on Your Car Rental
Shop around
As the above comparison shows, prices can vary sharply by rental agency. Likewise, your preferred rental car company may not always offer the best prices in every location.
“I usually will shop around,” says Emily Laubach, a corporate event planner in the San Francisco Bay Area. Laubach rents cars regularly for her business trips and also arranges rentals for conference and convention guests. “I’ll go straight to the car rental agency, then I’ll go to a website with a name-your-price tool, like Priceline. You may end up with the same Hertz rental car, but you might save $20 a day by shopping around on different sites.”
Association members (like AARP), people who have credit cards, folks enrolled in frequent flyer programs, and warehouse club members (like Costco) can often find great deals by shopping for rental cars on the AutoSlash website. We requested an AutoSlash quote for a five-day Los Angeles trip and received better rates on Enterprise and Budget car rentals. AutoSlash’s quotes also include local agencies, which may offer even lower rates than national companies like Hertz, Budget, and Enterprise.
Skip the extras
Extra creature comforts make driving more enjoyable, but they can add up. For example, in Los Angeles, Hertz charges $35.93 per week for optional SiriusXM service and $84.95 for mobile GPS. Most rental cars are relatively new. If the vehicle’s sound system is equipped with bluetooth, you can stream music, news programs, or podcasts from your Android smartphone or iPhone instead. Apps such as Waze provide detailed maps and audible, turn-by-turn driving instructions using your phone’s built-in GPS.
If you really need an add-on, arrange it in advance. “If you need a car seat or something like that, always reserve that ahead of time because they don’t have them at all car rental agencies,” says Laubach. “They might have them at another office in the area, but not in all locations.” If you don’t reserve the equipment you need, you may have to buy it at your destination, adding costs to your trip.
Decline certain insurance coverages (but understand the risks)
Declining coverage at the car rental office can save money. But “there are big risks,” says Elaine Morton, vice president of Morton Insurance Agency in Bartlett, Tennessee.
Sometimes collision and comprehensive coverage is transferable from your personal car insurance to your rental, yet you would still have to pay a deductible in the event of a claim. And without purchasing additional coverage from the rental agency, you could be required to pay for their loss of use, says Morton. Loss of use is the dollar amount the rental agency will lose by not renting out the vehicle while it is getting repaired.
Bottom line, you can save on costs here, but at your own risk.
Rental agencies also offer a collision/loss damage waiver, an agreement that prohibits them from suing you for damages or loss while you’re using the car. “If you purchase the collision damage waiver from the rental car company, it includes collision and comprehensive, with no deductible,” says Morton. Many credit cards feature rental collision waiver benefits for their cardholders. To take advantage, you’ll need to charge the rental to that card, decline the waiver at the rental counter, and make sure to check with your credit card issuer first before choosing this option, as certain conditions will apply.
For more information on car rental insurance, this guide will break it all down for you.
Book early—or last minute
When to book can be tricky. “If you know you need a rental car in four months, book it now because sometimes they’ll give you a better deal,” says Laubach. “Sometimes, if there are only a few cars left, they’ll jack up the price. ‘
The price can also depend on whether you’re traveling on peak or off-peak. If you plan to travel during peak season, it’s best to reserve a car as far in advance as you can. But if it’s off-peak, you can sometimes get bargains at the last minute, says Laubach.
Avoid unnecessary fees
When you make a rental car reservation, read the fine print in the confirmation email and the agency’s FAQs on its website. If you arrive early to pick up your rental or return it after the scheduled time, the agency could impose an early arrival or late return fee. Many companies apply a late fee when returning a car less than 30 minutes overdue.
Look for rentals that include unlimited mileage to avoid mileage fees. If you plan to drive the vehicle across state lines, ask the agency if you will incur out-of-state charges. Typically, rental car agencies require you to refill the fuel tank before returning the vehicle. Otherwise, you’ll pay fuel charges. Some agencies offer an optional fuel plan, which allows you to return the car unfilled, but you can usually get a better fuel price at the pump.
Pay upfront, not at the counter
Some rental companies will charge you a lesser rate if you pay at reservation, either online or over the phone, instead of paying when you pick up the car.
