How to Save Money on Rental Cars: Avoid Overpaying with These Tips

Rental car prices have dropped nearly 20% since 2021, but you could still be overpaying. Many auto policies and credit cards offer rental coverage, so verify before purchasing extra insurance.

Rental car prices have dropped nearly 20 percent from their peak in 2021, according to NerdWallet, but you might still be overpaying.

Rental companies often push costly insurance coverage, sometimes exceeding $30 a day. However, many personal auto policies in the U.S. include liability, collision, and comprehensive coverage for rental cars, as noted by the Insurance Information Institute. Additionally, many credit cards offer collision protection for rentals paid with their card. Before declining coverage, confirm with your auto insurance provider or credit card issuer that your rental is covered. Note that some cards won’t cover rentals in countries like Ireland, Israel, Italy, and Jamaica.

For peace of mind, paying for the rental company’s damage coverage can mean avoiding filing claims with your insurer, paying a deductible, or risking a premium increase. Here are additional factors to consider when renting a car.

Low-rate rentals often come with conditions. Rental companies and third-party sites like Priceline may offer significant savings for paying in advance or choosing a «mystery car.» For example, you could save nearly $300 on a weeklong rental at Hertz in Los Angeles by selecting the mystery car option. However, these deals might not include free cancellation, so if your plans change, you could lose your payment. You might also end up with an electric vehicle, requiring you to find time and places to charge it.

Third-party vendors like AAA, Costco, and Priceline might offer the lowest rates, but changes to your booking usually need to be made through their websites, which can be more complicated than dealing directly with the rental company.

Electric vehicles can be the least expensive rental option. However, charging takes longer than refueling. A DC fast charger typically adds about 150 miles in 30 minutes, while Level 2 chargers add only 10 to 20 miles in the same time. Many hotels offer EV charging, but if yours doesn’t, you can locate charging stations using Google Maps or apps like ChargeHub or PlugShare.

«If you rent an EV, your best bet is probably a Tesla, which has the biggest, easiest-to-use network of fast chargers,» says Alex Knizek, associate director of auto test development for Consumer Reports and an EV expert. To save time, consider paying the fee for the rental company to charge the battery before drop-off (e.g., $35 at Hertz).

Short-term rental companies like Zipcar allow hourly rentals starting around $11, with cars available throughout many cities. This can be cheaper if you need a car for only part of a day. Zipcar membership costs $9 a month or $90 a year, plus a $25 application fee, with discounts for AARP members.

Peer-to-peer car rental services like Turo let you rent cars directly from owners. They can offer low prices and make it easy to rent classic or exotic cars. However, if you prefer the latest safety features, check the model year to avoid older vehicles that may lack them.