The ultimate guide to stretching your dollar when renting a car

AT THE RENTAL COUNTER (Or while booking in advance)


#8 Waive the insurance

Buying insurance that you don’t need from the rental car company directly is a huge waste of money and one of the most common mistakes people make.Check to make sure, but the odds are that between your existing auto policy and the coverage provided by your credit card, you already have rental car coverage.  If not, consider getting a credit card that offers it for free, or calling your auto insurance company and getting this option added.To really drive this point home, the cost of company insurance is embarrassingly high.  Here is a recent example for a Seattle economy car rental.  The daily rate for the car is $15.19, but the insurance rates are:

  • Loss Damage Waiver –   $26.99 PER DAY
  • Personal Accident Insurance – $3.00 PER DAY
  • Personal Effects Protection – $1.95 PER DAY
  • Additional Liability Insurance – $11.69 PER DAY

Rental companies may try to lure you in with a $0 deductible through their loss damage waiver.  You’ll need to decide your odds for getting in an accident and compare that to your auto deductible and the state of your emergency fund.  My deductible is $500, and at $26.99/day, I’ll have spent that in about 18 days of car rentals.  I would prefer to self-insurance and put that money into a savings account, earn interest on it, and only spend the money if I actually have an accident where I am at fault.


#9 – Don’t pay for fuel options, fill it up yourself

Call it a pet peeve, but we hate clearly over paying for something because we are simply lazy.  Rental companies typically provide 3 gas options.  The first option you fill it up yourself, second you can pre-pay for an entire tank of gas and third they fill it up and charge you for the gas plus a convenience fee.  The first is generally the best and having them fill it for you is almost always a very bad deal.


  • Option #1 – Fill it up yourself
    For the frugal traveler, filling the gas up your self is almost always the better deal.  There is usually a gas station within a mile or two of the rental car facility and taking an extra 10 minutes can literally save you hundreds of dollars (see Option #3 in a few paragraphs).  When you fill it up yourself you only pay for the gas you actually used, you get a better or comparable price per gallon, and you don’t pay convenience fees.  You may even get rewards from your cash back credit card, some of which offer bonuses for gas purchases.

  • Frugal Fail Option #2 – Fuel Option / Pre-Paying
    Pre-paying for a full tank is a gamble, but just like in Vegas, you will probably lose in the long run.  The hook the rental company uses is an offer of a discounted rate per gallon.  On a recent trip to Hawaii, this was a $0.20/gallon savings.  But that is before the taxes are applied to your rental.  When taxes are added, it is basically a wash to a very small discount.For the sake of argument, let us assume the gas is post-tax and you are saving $0.20 a gallon.  If you misjudge and bring back the car with even 1 gallon left in the tank, you wipe out the savings (14 gallons x .20 = $1.40.  The additional gallon you overpaid for was $4.27, so you’re still out $2.87).  It gets a lot worse though, if you bring the car back with more gas in it.  The average mid-size car has a fuel tank of approximately 15 gallons.  If you bring the car back with 5 gallons in it, you wasted at least $21 on convenient gas.  We are all for saving time, but $21 for 10 minutes of convenience is an effective rate of $105 an hour – which to us doesn’t cross our “lazy” threshold.

  • Frugal Fail Option #3 – Let’ them fill it up for you when you return
    Depending on how your gamble of pre-paying for a full tank plays out…the worse possible option is to let them fill it up for you when you get back.  The fees for this vary, but are universally offensive.  On our recent Hawaii trip the fee was $6.50 a gallon, or $2.03 over the cost of gas.  If they fill the entire tank for you, this convenience will cost you an additional $30 plus any gas card cash back / points you would have earned.  Some rental companies charge much more (I have seen as high as $6 over the price of fuel) and others have a minimum (3+ gallons) for example… so depending on where you rent this could cost you much more than Option #1 and far more than filling it up on your own.

    USA Today recently did a survey of 13 major airports
    and found that rental car companies frequently charged as much as $9.29 per gallon to fill up the car for you when you return the vehicle empty.  In an extreme example of a Ford Club Wagon, a full 35-gallon tank would cost you $325.15 vs. approximately $150 to fill it up yourself.


#10 – Be wary of add-ons

Just like insurance, add-on services are a big cash cow for rental companies, and that generally means they are a bad deal for you.  Car seats, satellite radio, GPS, etc. can really cost you.  In almost every case of a weekly rental, it is a better deal to buy your own or do without.

  • Example #1– Car seats
    An infant car seat will typically cost $13 to $16 per day of the rental.  For a 5 day rental, this is an extra charge of approximately $75 dollars.  It gets worse though, because you may have to pay all taxes and fees on the add-ons as well, this means an extra $7 to $10 taxes, so that 5 day car seat rental could set you back as much as $85.  For that price you can literally buy your own very decent and very safe infant car seat, with travel bag, for less money.  Buying and bringing your own can be a slight inconvenience, but you get to keep the car seat (we use our cheap “travel seat” in our second car), as a bonus the car seat you bring will more than likely be newer, cleaner, less smelly and probably all around nicer than the one you will rent.   The rental seats are no gem (see picture).

    Quick Tip: Some companies like National and Alamo have a $49.95 per rental max on infant car seats.  Even at that price, we still feel it better to buy and bring your own.

  • Example #2 – GPS
    A GPS rental will set you back $10 to $16 each day of the rental, add-on the taxes and this is another ~$85 out of your pocket for a 5 day rental.  For that amount (or about $40 more), you can buy a unit that is just as good or better than the probably 2-year old unit you will rent and at the end of the rental you get to keep it.  GPS units are small, so they are very easy to pack, which means there is little excuse to not bring one.  Before you go out and buy one, consider you may already own one – if you have a smart phone you probably already have an excellent GPS on your phone.   Apple iPhones and all Android-based phones have excellent GPS software in them already.  A car-mount and car charger, if you don’t have them already, can be had for under $40, and you can use them anytime.  Be sure to have a car charger as GPS units in phones drain the batteries quickly.

  • Example #3 – Green House Offset Fee
    The fee ranges a $1 per rental to a dollar or so per day.  This option lets you can “offset” the carbon you put off by renting a car via a donation to some charitable or carbon credit organization.  Our advice is to save the money and actually do something significant and meaningful to save the environment like upgrading your homes insulation, by a hybrid or clean diesel car, recycle more, turn down your thermostat, drive a little slower, or even renting a smaller more fuel-efficient car!


#11 – Be Wary of the up-sell

Many car companies will try to up-sell you to a higher car class at the time of rental (another reason to stick with a loyalty program – you don’t have to hear the pitch if you bypass the rental counter).   This is usually put in very tempting terms; after all, what’s another $3/day to move up a level?  Well, it’s $21 over a week, plus tax, that you didn’t think you needed to spend before.  Sure, at reservation time the rate might have been $5 or $10 a day, so you are saving $2 to $7/day, right?  Wrong.  You are spending $21 for something that you decided earlier you didn’t need.  These kinds of upgrades throughout any trip can really eat into your budget in a hurry.  Remind yourself that spending 5% – 10% more than you intended on your trip (especially if that money winds up on your credit card) will cost you a lot in terms of stress and lost savings in the long run.  Stick to the class you wanted in the first place.

Quick Tip: Reserving early and avoiding the counter all together can save you the hassle of dealing with the up-sells at the counter.


#12 – Don’t let them ‘upgrade you’ unless you want it

Upgrades are not always a good thing.  I have rented 100’s of cars and on more than one occasion they have tried to “upgrade me” to a larger SUV or similar car.  The problem is, I had intentionally booked a smaller car because I was going to be doing a lot of driving and wasn’t interested in paying high gas prices.  This may seem like penny pinching, but pennies add up.  For example the small to mid-size car you booked may have gotten 35MPG highway, while the SUV “upgrade” only gets 19MPG.  Assuming $4.25 for regular, on a 500 mile trip, this “upgrade” could cost you $130 in extra gas.


#13 – Inspect the car before you drive off

This can save you problems and a lot of headaches later on.  Before we drive off the lot, we always check the following things:

  • Is there any damage to the car? Walk around the entire car and look for any damage.  If there is damage, report it and get it recorded on your rental contract or get a new car.
    Once we had a broken passenger side mirror, if we had not caught this before we drove off the lot, they could have claimed we did the damage and we or our insurance would have had to pay for it.
  • Is the gas tank full? All cars are supposed to come with a full tank of gas.  This usually means the needle is comfortably over the F line.  Double check to make sure, it is not uncommon for the needle to be just below the F line by a hair.  If this is the case, you may be missing 1 or more gallons of free gas.
  • Are the tires in good condition?  Do headlights and blinkers work? Safety is important and if you get pulled over for a busted headlight, you will pay not the rental company.  Just take a quick look and make sure you feel safe driving this car around, especially considering what the weather conditions are going to be like.

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