If you haven’t rented a vehicle in a while, it’s worth reviewing the rules of the road so you don’t waste money.
It’s possible to double the daily or weekly rate of your rental car with such add-ons as insurance, a second driver, toll road pass, car seat or bike rack.
These smart spending tips to avoid rental car pitfalls will help save money, even legal grief, if you are renting a vehicle during this peak summer travel season – or anytime.
The largest optional daily cost most likely is insurance, which can add up to $40 a day for collision and liability coverage.
Whether you need to sign up for optional Loss Damage Waiver (LDW) and Collision Damage Waiver (CDW) insurance depends on many things. There is no one-size-fits-all answer.
It depends on what your own auto insurance policy and homeowner’s policy cover, and the policy of the credit card you use to rent the vehicle.
It also depends on where you will be driving and for how long.
Your Own Auto Insurance Policy May Include Rentals
In most cases, your own auto insurance policy extends coverage of bodily injury, personal property, vehicle damage and loss to a rental car.
Check your policy, or ask your insurance agent before renting to avoid buying duplicate coverage.
However, consider buying the rental company’s coverage when it costs less than the deductible on your owner’s policy. That way, you won’t have to make a claim for a ding or cracked windshield, and your own insurance claims record stays clean.
ecoXplorer smart spending tip –
- If you travel and rent often, consider adding an annual rider to your auto or homeowners insurance policy, or a separate umbrella liability policy.
Your Credit Card Might Provide Rental Insurance
Most credit cards offer built-in coverage, which increases with premium level cards, such as gold, platinum and sapphire.
However, that can be false security, especially if you do not own a vehicle and do not have your own vehicle insurance, since even the most premium credit cards are not likely to cover liability.
Read credit card rental insurance carefully for gaps in coverage.
They generally cover collision damage, but not liability.
A phrase such as “this product provides secondary coverage and does not include liability coverage” could wipe out your nest egg if you are in an accident with injuries.
Look for the phrase “loss of use”, which means you could be liable for the time the vehicle is in the shop and unavailable for rental.
You also could be held liable for administrative fees, for the paperwork the rental company must do with its own insurance company.
ecoXplorer smart spending tip –
- Be sure your credit card insurance covers rental RVs, campers and trucks.
- According to the credit card comparison website creditcards.com, none of the so-called “big five” (Amex, MasterCard, Visa, Discover, Diners Club) cover rental trucks, RVs or exotic sportscars.
What Else?
Maximize Your Memberships
Get discounts with memberships in AAA, AARP or Costco.
Get priority rentals and fee-free upgrades by being a member of the top auto rental companies, including Hertz, Avis, Budget, Enterprise.
Document the Rental Before and After
Look for damage, including minor dings, scrapes or upholstery tears, before you accept the vehicle, with mobile phone photos or videos.
Do the same thing when you return the vehicle – including a photo of the gas gauge to prove you gassed up before returning it.
The photos and/or video will help document a claim against you.
Also document your reservation confirmation to dispute any unauthorized fees. Recently, longtime friends of mine celebrating a milestone anniversary were charged $647 for a $267 confirmation. They are disputing it.
Most Rental Company Insurance Plans are Capped at 30 Days
If you need a vehicle for longer than a month, break the rental into shorter periods to stay under the 30-day limit. Or, consider a short-term lease.
Include the names of all drivers on the rental contract, since insurance coverage is normally invalidated by a “non exsistent” driver.
ecoXplorer smart spending tip –
- Join a rental car company’s customer loyalty program to avoid fees for younger drivers and qualify for automatic upgrades.
- Car rental fees for younger drivers currently are around $25 additional per day.
- Sixt offers a 10% discount for students with a valid ID from a college or university.
Where You Rent and Drive is Important
Before you go, check whether your driver’s license is enough to rent or drive in the country you are visiting.
Credit card insurance does not cover you in some foreign countries including Australia, New Zealand, Ireland, Israel, Jamaica or Mexico, and your own auto insurance policy likely won’t either.
So, it is most important to buy insurance in the country where you are renting, and ask about the rules for insurance coverage if you will be crossing borders, such as between Germany and France.
Even if your state-issued driver’s license is accepted in the foreign country you are visiting, it is, it is well worth the $20 fee to get an International Drivers Permit (IDP). Consider it another form of car rental insurance.
Your IDP is valid identification in 150+ countries worldwide and contains your name, photo and driver information.
Plus, it translates your identification information into 10 languages — so it speaks the local language even if you don’t.
ecoXplorer smart spending tip –
- Get an IDP directly from the AAA, and avoid paying service fees to companies that will apply for you.
- It makes no sense to use a third party, since you have to send the service company the same documents you could send directly to the AAA.
- Besides saving money, applying directly to the AAA saves time.
What’s your best and worst experience with a rental car? Add a comment below.
This article was published originally in 2018 and is updated annually, including for the peak 2025 summer travel season.
ecoXplorer Evelyn Kanter is a journalist with 20+ years of experience as a newspaper and magazine writer, radio & TV news producer & reporter, and guidebook and smartphone app author – all focusing on travel, automotive, the environment and your rights as a consumer.
ecoXplorer Evelyn Kanter currently serves as President Emeritus of the International Motor Press Association (IMPA).
ecoxplorer Evelyn Kanter also is a member of the North American Travel Journalists Assn. (NATJA) and the North American Snowsports Journalists Assn. (NASJA)
Contact me at evelyn@ecoxplorer.com.
Very Informative for those who rent a car frequently, very good post keep it up.
Such an informative and helpful post, keep up the good work.
Nice post keep it up and make posts like this. Thanks once again!