How much does it cost to rent a car?

This is one of the most common questions people have when it comes to car rentals. Unfortunately, it is also one of the hardest to answer.

Different car hire companies have different rates, but even if we focus on a single company in a single city, the answer is still “It depends.” And it depends on a lot of factors.

When you book

The earlier you reserve a car, the cheaper the rate will be. Booking a vehicle you need to use tomorrow is going to be a lot more expensive than reserving a car several weeks in advance.

Type of vehicle

In general, the bigger or fancier the rental vehicle is, the higher the rate is. An economy car, for example, will be significantly cheaper to rent than a sports car or a minivan.

How long you rent

The longer the rental period is, the cheaper the rate per day becomes. For example, renting the vehicle for 3 days may cost you $70 per day but renting it for an entire week may cost you only $350 ($50/day).

When you pick up the car

In many small cities, rental firms make money mostly on weekdays, when business travelers go around the area, so renting a car for weekend use tends to be cheaper. For touristy destinations, however, car rentals might be more expensive during the weekends due to the influx of tourists.

In addition, expect higher rates during holidays, such as Christmas or Thanksgiving.

Where you pick up

Picking up the vehicle from a convenient location such as an airport or a train station will cost you more. To save money, it is better to rent from a location downtown or in the nearby suburbs.

Where you return the car

Some rental companies charge extra if you collect the vehicle at one location then return it at another location.

Who will drive

Many car rental agencies charge extra if the driver is below 25 years old or is a senior (above 65 or 70 years old, depending on the company policy).

Moreover, some companies charge additional if more than one person will be driving the car.

The add-ons you get

Renting additional equipment will cost you extra. These include things such as GPS, roof racks, and baby or child seats.

The excess insurance

When you’re on the rental desk, the rental agent will likely pressure you to also buy excess waiver insurance from them.

Without such insurance, you are liable to pay a huge amount of money (called the “excess”) if the rental vehicle suffers any damage or is stolen while in your custody; the insurance brings down the amount to zero or close to zero.

However, buying car rental excess waiver coverage from an independent 3rd party is always cheaper than buying it from the car hire firm. Not only will you save hundreds of dollars, the coverage will likely be the same or even better. So don’t buy the ‘extra’ insurance offered by the rental company; get a third-party policy before your trip instead.

Whether or not you refuel

For rental agreements that include a “full-to-full” fuel policy, you need to fill up the tank before returning the car; otherwise, you will be charged a premium price per gallon for the gas needed, and maybe an admin fee as well.

A “full-to-empty” policy, meanwhile, lets you pay for the fuel in advance, so you can return the car even with an empty tank.

Taxes

Aside from all the expenses mentioned above, you will also be paying taxes when you rent a car, such as local and state sales taxes or value-added tax (VAT).

Other fees

There may also be other miscellaneous fees appearing on your bill, such as:

  • Late return fee – if you return the vehicle after the deadline stated in the agreement
  • Early return fee – if you return the car a day or more early
  • Mileage fee – a fee per mile or kilometer exceeding the mileage limit
  • License fee – an extra charge allowing the rental company to recover their costs of licensing their vehicles
  • Frequent flier fee – if you request frequent flier miles for the rental
  • International travel fee/cross border fee (if you’re traveling to outside the country, e.g. going from an EU country to a non-EU country)
  • Rental insurance admin/processing fee – in case of accident or collision

Bottom Line

As you see, a lot of variables affect how much you’ll pay when renting a car. Knowing about these factors will give you a better understanding of how much it really costs to rent a vehicle. It will also help you make informed comparisons when shopping around for the rental option that suits your needs and your budget.

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