How much does it cost to hire a car on holiday?

Car Hire rental costs

We looked at a week’s car hire in Alicante, ideal for Benidorm holidaymakers and costs started at 223 euros for a small car (Ford Fiesta) up to 314 euros for a typical family saloon. This just shows how Car rental prices shot up during the pandemic.

As global travel slowed dramatically, giant companies sold off large parts of their fleets and cancelled orders for new cars. With signs of recovery, at least in some parts of the world, acquiring vehicles fresh from the production line is difficult because of supply chain issues.

The Covid-19 pandemic caused massive disruption for the car rental industry, as it has for airlines, hotels and travel agents. Demand is now outstripping supply, with predictable price rises and shortages – with rental firms understandably wanting to recover some of their huge losses incurred during the Covid crisis.

Add in the pre-pandemic trends, in particular the distortions that resulted from by price-comparison sites intervening between the traveller and their wheels, and car rental has never had more pitfalls.

This guide can help you avoid them, and get good value for your next road trip abroad. Where do I start?

To secure the car you want at a price you like, plan ahead. As with everything in travel, car rental rates and availability vary dramatically depending on supply and demand; in the short run, supply is fixed, while demand is highly volatile.

Look for:

  • All inclusive cover without excess
  • You do not need to leave a deposit
  • Full-Full tank
  • With express check-in
  • Additional driver

For example, a Canary Islands supplier – has a Fiat 500 at for rent at Tenerife South airport this week for €294 (£250) – while booking five months ahead would have found you a rate of €213 (£182) – less than £23 per day for a vehicle worth £15,000. But I don’t want to commit in advance …

The option to cancel without penalty is expensive – and “pay on collection” rates are higher than pre-paid rates.

For example, Hertz will offer me that Fiat 500 for a week beginning 15 August at Pisa airport in Italy for £537 if I commit and pay two weeks in advance. Alternatively, though, I can book the car to pay on arrival for £770 – 43 per cent higher.

Don’t forget other costs…Second driver, age, tolls, gps, car seat, accident damage, fuel and more. Prices can rocket.

But you can regard a pay on arrival booking as insurance against a shortage of cars while you shop around. What’s the best strategy for shopping around?

To get an idea of price levels, enter your requirements at a broker such as Rentalcars.Com (part of Booking.Com), Carrentals.Com (part of Expedia) or a price-comparison website, such as Skyscanner or Travelsupermarket.

Ensure you compare like with like. Be aware that the lowest quotes may have some or all of these disadvantages: a very high excess on damage. a fuel policy that isn’t the straightforward “out full, back full” deal.

Having established the prevailing price level, don’t simply click through from initial site. While it may take you straight to the supplier, there’s a good chance it could lead to a broker (another middleman).

Also: should a problem occur, the more intermediaries there are, the trickier it will be to solve.

After decades of renting cars abroad, and being clobbered for unexpected extras on several occasions, I have concluded that I would rather pay a few pounds extra for the chance to talk to an expert about the options and costs.

Call, or check the websites of, two or three of the big multinational car-rental firms, such as Hertz, Avis and Enterprise, and any local companies that have been recommended to you.

In addition, if you belong to an airline or hotel loyalty scheme, see if there are discounts or special deals, such as a second driver free – this works well with Virgin Atlantic Flying Club and its car rental partners.

Alternatively, book a car as part of a fly-drive trip, or as an addition to a package holiday.

On trips booked through firms such as Trailfinders and British Airways Holidays, I have secured excellent value – not least because the price you pay includes everything you could reasonably want in terms of insurance and a second driver. What are the pitfalls?

Many. The price should include elements such as the airport surcharge, taxes and basic insurance. But you also need to be aware of:

Fuel policy: The traditional plan is out full/back full. Many internet deals, though, insist on out full/back empty. You pay an inflated amount for the tank of fuel, and are cheerfully told to bring it back empty – which, of course, is an impossibility. Every drop of fuel that you leave represents profit for the provider. Personally, if it’s not an “out full/back full” policy, I will politely decline.

Damage excess: How much might you have to pay in the event of a scrape? If you choose to take out separate insurance for that excess, or have it free as part of a credit-card deal, will the firm accept the policy? And can you guarantee that I won’t be asked for a deposit?

Excessive repair charges for everyday marks that should come under the definition of “normal wear and tear” seem part of the business plan among some rental providers.

Second driver: Most reputable companies will allow you to add a second driver for free. If not, how much will it cost?

Tolls: In locations such as Portugal and Florida, there are sometimes-complex toll systems in place. I usually ask: can I pay tolls manually? If I can, I do. If not, I ask if I can enrol online for a scheme rather than take a more expensive option.

GPS: Car-rental firms will be delighted to rent you this option, but it will prove extremely expensive – typically £10 per day – compared with using your smartphone (if you have free or very low-cost roaming) or that old fallback, a road map.

One-way rental drop-off fee: The car rental equivalent of an “open-jaw” flight is often a valuable option, allowing you (for example) to fly into San Francisco and out of Los Angeles, or from Barcelona to Malaga without needing to retrace your steps.

Drop-off fees for intra-state rentals in the US are often zero, and some firms are happy for you to leave the car in the same European country. But once you start crossing borders the fee can soar. Anything else to think about?

Plenty, starting with your arrival time. If you are due to arrive late at night, don’t choose a cheap provider which closes an hour after your plane is due to land and just hope for the best. There is often a significant financial penalty if you miss normal office hours.

Picking up the car: In many cases, car rental staff are incentivised on the extras they can persuade you to take when you pick up the car. My rule is politely to decline everything. They are mostly absurdly overpriced insurance options; Roadside Assistance Plus, for example, is not necessary. If their car breaks down while you are driving it, that’s their problem, not yours. They need to sort it out. Decline the chance to pay for this benefit.

Even then, in the US, in particular, I’ve been one of the many unwitting fools who don’t spot that they’ve been upgraded and are paying a small fortune for something they didn’t ask for. To avoid that danger, discreetly record the conversation with the rental agent on a mobile phone and say, loud and clear: “To confirm, I don’t want any extras or upgrades.”

Check for damage: scratches and dinks that most of us might regard as normal wear and tear can, in the eyes of some less-reputable car rental firms, constitute damage that needs repairing at some outlandishly inflated sum. So check the car carefully before you drop it off, and photograph any significant damage.

If you happen to be returning the vehicle out of hours, so that it does not get officially checked in, film the exterior and even the fuel gauge in case of any subsequent dispute. Where are rates highest?

The Republic of Ireland, car rental prices are at unprecedented levels. At Dublin airport, the cheapest one-week pay-on-arrival hire at Avis for early August is £1,574 for a family-sized Seat Leon estate. That is £225 per day.

The firm also has a Tesla electric vehicle available – at £2,288, or almost £1 per hour. Before the pandemic, rates for small cars were as low as £15 per week. The cheapest quote I can see in the US for a “sub-compact”. How tiny is it?

Quite large. “Sub-compact“ or ”economy“ car in American terms is a perfectly respectable size for a European family. So politely ignore the salesperson’s assessment of your pre-booked vehicle as being thoroughly unsuitable for the journey you plan (“You’re not seriously thinking of all sharing that car, are you?”).

If you decide to trade up, the costs swiftly increase; the upgrade fee is itself upgraded by a range of additional charges, including state tax and airport fees. Is picking up at an airport a mistake?

Often. Airports recognise the value of car rental to passengers and know they can extract a premium. This is passed on to the customer — with lots of other people trying to get a slice.

When I tested an Enterprise rental in San Francisco, the rate for a week’s small car was more than twice as high at the airport (£512) than from the firm’s office in the city centre (£252). The discrepancy was made up of a whole range of fees, including a $16 flat fee per rental for “Airport Transportation” and an 11.11 per cent “concession recovery fee” that the airport charges the rental company. There was also a 3.5 per cent “tourism fee” (heading for the California Travel and Tourism Commission), a 2.5 per cent San Mateo County Business Licence fee and sales tax of 9.375 per cent on the basic rental plus extras.

Downtown, sales tax was one per cent cheaper – though there was still a cheeky “vehicle license recovery charge” of almost £1 per day, to recompense the rental firm for having to licence its cars. Which you might imagine should be built into the initial cost.

As airport charges can add hundreds of pounds, dollars or euros, avoid them by hopping on the train or bus from the airport and hiring in the city centre. In any event, it is best not to drive immediately after a very long flight through multiple time zones.

Note that there is no airport penalty, with a one-way rental, in picking up at low cost at a city centre and returning to an airport. How can I keep prices down?

Always book the cheapest model of car that you and your travelling companions can feasibly fit into.

Experience suggests you stand a good chance of a bigger vehicle than you ordered anyway. On about half the occasions I hire in the US, there is not a single ”economy“ or ”sub-compact“ car in the rental lot, and I get a vehicle the size of a small house without paying a penny more.

Also, at the risk of sound too obvious, consider whether you actually need to rent a car. Public transport is generally improving around the world, even in the US, and services such as Uber and Lyft provide reasonably economical ways to fill any gaps.

In many parts of Europe, resort areas have decent trains and buses. This certainly applies to much of Italy as well as Spain’s Costa Blanca and Costa del Sol, plus the Portugues Algarve.

You could also plan to hire for a short time from a cheap and cheerful local provider (eg on a Greek or Italian island) – or avail of one of the many city car-club schemes whereby you can rent for a few hours, with fuel included. My US package holiday includes “free basic car rental”. Is it free, and how basic will it be?

Many Florida and California packages include the offer of a car. But the business model of the supplier of the vehicle is that they will extract a reasonable amount of money from the person who rents it by charging for a range of options. By steadfastly refusing all offers of options, you can make it genuinely free. I’m booking a budget flight. The airline says it has a deal with a car-rental firm that guarantees the lowest rates. Should I take it?

If you have straightforward requirements (eg one driver only) and you are satisfied it is the best price, then do. Bear in mind that you might be paying a fee to two intermediaries – the airline and a broker such as Cartrawler, used by easyJet – along the way.

On arrival, be fast off the plane: if you have taken up the deal, the chances are that plenty of other people have, too. It’s worth the named driver going straight through to the desk, while the rest of the group wait for the luggage. I have a driving conviction. Does that make a difference?

It depends on the seriousness of the offence(s). Three points for “leaving a vehicle in a dangerous position” is probably neither here nor there – unless, when combined with speeding fines, it leads to disqualification.

Convictions for drunk driving and dangerous driving could lead to rental firms refusing to hire to you. Am I too young or too old?

Possibly. Because of the high accident rates among young (especially male) drivers, it is very rare to find any company prepared to rent to someone under 21. Surcharges are often payable for under-25s – and, especially for upmarket cars, drivers under 30 may pay more or simply be declined.

The upper age limit varies from 70 to 99.

Author Profile

Mark Boardman
Mark Boardman
Mark Boardman is an established showbiz journalist and freelance copywriter whose work has been published in Business Insider, Daily Mail, Bloomberg, MTV, Buzzfeed and The New York Post amongst other press. Often spotted on the red carpet at celebrity events and film screenings, Mark is a regular guest on BBC Radio London and in-demand for his opinions for media outlets including Newsweek. His TV credits include This Morning, The One Show and T4. Email

Leave a Reply