Rental Car Savings: Nine Tips

Car rental counter

This content is provided courtesy of USAA.The struggling economy has grounded many travelers over the last two years, so you might expect rental car companies to be doling out sweet deals. Not so, according to Neil Abrams, president of Purchase, N.Y.-based Abrams Consulting Group, a leading researcher of the car rental industry.

"Last year we saw historically high rental rates, and as demand rebounds, rates should remain strong," says Abrams. Rental companies have significantly downsized their fleets and undergone other cost-cutting measures in order to keep their rates healthy, he says.

That may be disheartening news for travelers looking to get away on the cheap. But the higher costs also provide motivation to shop harder and smarter.

Here are nine tips to help you get the best deal possible on a rental car, and avoid the traps that can cost you dearly.

1. Plan ahead.

Taking your chances on a walk-up rental is risky business. Chances are you'll pay more and have to choose from a limited selection of vehicles. When big conventions come to town, some rental locations sell out completely. That's even more likely now that the agencies are keeping fewer cars on hand, says Abrams.

2. Scour the Web.

Start searching for good deals early, and leave no stone unturned. Popular travel websites like Expedia, Travelocity, and Orbitz allow you to compare offers from multiple companies at once, and show you all taxes and fees upfront. But don't rule out booking directly through the rental companies themselves, including lesser known local agencies, where you might find exclusive deals. Adventurous souls might also try sites such as Hotwire and Priceline that promise deep discounts if you can commit to booking without knowing all the details in advance.

3. Look for discounts.

Don't miss out on deals through affiliated providers you already use. For example, if you are a USAA member, you can save up to 25 percent with Avis and Hertz and 20 percent with Budget, plus get extra perks such as free enrollment in priority programs, unlimited mileage and the ability to earn points toward cruises. Your airline loyalty program might also offer special deals on rental cars. Also, many large businesses negotiate discounted car rental rates for their employees.

4. Book, re-book.

Rental rates can fluctuate by the hour, often taking dramatic swings from week to week. So it might pay to keep an eye on rental prices even after you've made a reservation. If you find a better deal, there's usually no charge to cancel your existing reservation and book the cheaper option.

5. Go to town.

Many cities have taken to funding public projects by taxing visitors from out of town. That strategy extends to rental cars. But the fees, taxes and the rental rates themselves are often much less at non-airport rental locations, according to Abrams. If a little less convenience won't wreck your travel plans, you could save big by taking public transit into town and then renting. Some rental companies will even bring the car to you at your hotel. However, be aware that these off-airport locations may have limited selections and restricted hours.

6. Make it right.

To avoid hassles caused by overbooking, confirm your reservation and vehicle type a few days before your trip. If the car you reserved is unavailable when you arrive, demand an upgrade, or request that the company get the vehicle you need from another location or another agency. In a worst case scenario where no agency has any cars available, ask that the rental company reimburse you for taxi expenses.

7. Extra, extra.

Add-ons are now critical revenue generators for the car rental industry, and can increase your bill by 20 percent or more. Even though you reserved a certain type of car, the agent at the counter might ask if you'd like to upgrade for a few dollars more per day. Gadgets and equipment -- from GPS units and satellite radio to ski racks and baby seats -- are also big moneymakers. If you're pinching pennies, avoid the temptation or bring your own gear.

8. Play by the rules.

Be sure you understand the terms of the rental contract. Most rental companies require drivers to be at least 25 years old, though this restriction can be waived if booking through USAA. And, they often charge extra if more than one person will drive the car. Other restrictions may prohibit you from crossing state or country borders. Be careful -- if you sneak around these rules, it could result in extra charges and void your insurance protection. Finally, return the car at the time you promised, or risk a late fee.

9. Fill the tank.

It's usually cheaper to refuel the car yourself rather than buying the prepaid fuel option. But there could be circumstances where paying extra for the convenience is worth it, such as having to hunt down a gas station in a strange neighborhood, or missing your flight home. If at all possible, don't decline the prepaid fuel and return the car empty. That could cost you a bundle -- as much as $6 per gallon.

Car Rental Insurance -- Yes or No?

It's a classic conundrum. The car rental agent asks if you want to purchase the extra insurance, and like many people, you're just not sure. Here's what you need to know for next time.

  • Your regular auto insurance policy typically covers you for the same coverage while driving a rental car (with some limitations, such as leaving the country and loss of use).
  • Your homeowners or renters insurance policy may cover your personal property if it's stolen from the rental vehicle (with some limitations such as total dollar amount).
  • Your credit card benefits might include collision and theft protection that will pay for damages not covered by insurance. But you usually have to pay for the rental using that card. And the coverage may not apply to all types of rental vehicles.

Bottom line: The circumstances of your trip and the terms of your policy may vary, so call your insurance provider and/or credit card company to get the facts straight before you go.

Tip: Make sure you bring a copy of your insurance ID card with you on your trip.

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