10 ways to cut the cost of car hire

There are lots of ways to trim your holiday car hire bill and pre-empt unpleasant surprises. Here's our checklist to save money and avoid common car rental pitfalls.

Airport car hire desk
Holiday car rentals can be expensive
(Image credit: © EyesWideOpen/Getty Images)

If you're dreaming of going abroad - maybe for one of the May bank holidays, or in the summer - chances are you might be thinking about hiring a car.

Renting a car on holiday can make seeing the sights and travelling around much easier, especially if there isn't much public transport at your destination.

But the costs can quickly add up, and there are several pitfalls to beware of. Customers are often pressured into buying extras at the car rental desk, and there can be penalties for returning a car late or dirty, or failing to return it with a full tank of petrol.

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Damaging a car can also be extremely costly. 

While you may have already sorted your travel money, and packed a travel debit or credit card, it pays to spend a bit of time making sure you get the best deal on your car hire too.

Ben Wooltorton, from iCarhireinsurance.com, comments: “To make your money go further, shop around for the best prices and don’t waste money on extras at the rental desk including items like sat navs and child car seats, that could have been brought from home, or bought in advance."

With this in mind, we've listed 10 ways to save money and avoid common car hire pitfalls.

1, Book early but keep an eye out for last-minute deals

It's a good idea to book early to get the hire car you want and at a good price, but make sure to use a company that offers free cancellation. 

As you get close to your departure date, start checking for better deals. If a cheaper one appears, book that and cancel the original deal. Some holidaymakers have managed to save hundreds of pounds by cancelling their car hire and booking a cheaper deal just before their trip.

It's worth shopping around using a price comparison service or car hire broker. For example, for a week’s summer hire from 27 July – 3 August 2024 in Crete, Europcar is quoting a £312 rental fee, while Avis and Budget are quoting more than £500.

2, Try to avoid hiring from the main airport or railway station

Hiring a vehicle a short distance away from main transport hubs, such as airports and railway stations, can often save you money, and could be worth the taxi fare to the car hire office. The queues to collect the car could also be shorter. 

You'll need to weigh up whether you're happy to get a taxi to another car hire office - it may not seem appealing after a long-haul flight, or if you have children and lots of luggage with you.

But the convenience of picking up your car at the airport will almost certainly come at a price, so if you're looking to cut costs it's worth checking what alternatives are nearby.

3, Shop around for excess protection cover

When you hire a car, it comes with third-party insurance, but the excess is usually astronomical – as high as £1,800. If the car is damaged or stolen, the hirer is responsible for the excess amount.

When you collect your car, you will often be given the hard sell to buy extra insurance to protect you from having to pay the excess. This could cost around £200.

You can avoid it completely by taking out your own excess policy before you go on holiday. A standalone provider, like iCar.hireinsurance.com or Carhireexcess.co.uk, is normally considerably cheaper and usually offers more comprehensive cover.

For example, a week’s summer hire (27 July to 3 August 2024) costs from £33.15 for a week's protection from iCarhireinsurance.com and includes damage, theft, and tyre and windscreen cover. This is more than five times cheaper than buying from the rental companies which charge, on average, £154 for excess protection cover and £23 for tyre and windscreen excess protection cover for a week - a total of £177. 

For those who use hire cars more than once a year, an annual policy from a car hire excess insurer can offer even better value, with prices from £42.

4, Avoid buying extras from the rental desk

As well as excess insurance, you may be encouraged to buy other extras at the car hire desk.

For example, sat navs are often offered (average cost £72), the option to add another driver (£56) and also child’s car seats (£67).

By saying "no" to these items you could save £195 on average.

If you need any of these items, such as a child's car seat, consider bringing one with you. Most airlines allow you to bring a bulky item such as car seat for free as part of a child's airfare ticket.

5, Use a credit card for booking and to cover the excess

Using a credit card means you will gain Section 75 protection under the Consumer Credit Act. This means the credit card provider will protect purchases over £100 (and less than £30,000) and you could get your money back if there is a problem with the car hire.

Also, if you buy excess protection insurance in advance from a specialist insurance provider, and not the rental company, a credit card will be required by the rental company to cover the excess amount during the rental as debit cards are not usually accepted. If a claim is made, this is paid initially by the hirer on the credit card and is then reimbursed by the insurance company.

6, Read the small print to avoid unpleasant surprises

You may be tired from travelling to another country, but make sure you always thoroughly read the car hire agreement document before driving off.

Things to look out for include making sure you are not agreeing to an upgrade or paying for the rental company’s excess protection cover if you don’t want it.  

7, Don’t fall foul of the car hire fuel policy

Then there’s the fuel policy. The best option is often to go for a full-to-full deal. This means you need to return the car with a full tank, or you’ll be charged an inflated price for the car hire firm to fill it back up.

If you need to return it with a full tank, make sure you do, as the penalties can be expensive. Keep the receipt from the petrol company as evidence.

8, Beware of unwanted hire car upgrades

Watch out for a bill for an upgrade you had no say in. During the pandemic car-hire firms sold much of their fleet and they have struggled to rebuild them owing to a global car shortage. So it is more likely than ever that you won’t get the car you booked. 

If you get a smaller car than you wanted, you should receive a refund to reflect the downgrade.

If you get a bigger car you shouldn’t have to pay any extra – it should be a free upgrade. Make sure this is agreed and on your paperwork before you accept a different car.

9, Make a thorough inspection of the car - and take photos of damage

When you collect your car (and when you return it) allow time to inspect the vehicle for damage. Take a video or several photos when you collect it and again when you return it. That way you have evidence of any pre-existing damage and the state of the car when you gave it back in case there is a dispute over repairs.

If it is dark when you collect the car, make a note to that effect on the paperwork and do a full inspection as soon as you can.

10, Arrive on time - and don't return a dirty car

Always stay in touch with the car hire company and ensure they are aware of your travel details, as car hire bookings can be cancelled if travellers are late.

And try to keep the car in as clean a state as possible and take away rubbish and excess dirt. According to icarhireinsurance, anecdotally there are increasing reports of car hirers being fined for returning dirty cars. 

Ruth Emery
Contributing editor

Ruth is an award-winning financial journalist with more than 15 years' experience of working on national newspapers, websites and specialist magazines.

She is passionate about helping people feel more confident about their finances. She was previously editor of Times Money Mentor, and prior to that was deputy Money editor at The Sunday Times. 

A multi-award winning journalist, Ruth started her career on a pensions magazine at the FT Group, and has also worked at Money Observer and Money Advice Service. 

Outside of work, she is a mum to two young children, while also serving as a magistrate and an NHS volunteer.