How much does it cost to rent a car?

Whether you’re going on a vacation or road trip and want the freedom and convenience of wheels while exploring or need a car before deciding which one to buy, chances are you will rent a car at some point.

The cost of renting a vehicle varies depending on the type of vehicle, the rental company and where you rent the car. But on average, you can spend anywhere from under $50 a day to upwards of $100. Understanding how each factor affects the price will help you to budget for the expense.

Car rental costs by need

Renting a vehicle for a vacation versus a business venture carries different levels of excitement and cost. Considering where these differences fall is especially important as rates of inflation have made travel — for leisure or your day job — more expensive.

If you are embarking on a family trip you might have to spend more for a larger vehicle, whereas when renting a car for work you will likely just need room for yourself and your luggage. Along with this, higher trafficked areas may cost more due to booming tourism attractions. Keep these in mind when budgeting for rental costs.

Factors that impact rental car costs

The expected cost to rent a vehicle depends on factors such as location, car type and rental company. But the average cost in mid-May 2024 was about $42 per day for a four-day rental, according to travel website Hopper. To calculate your expected cost, reach out to Hertz, Enterprise, Avis or other rental companies you’re considering to best prepare.

Car type

When choosing a rental car, the first question most renters ask is how much space they will need. Car rental companies classify their vehicles according to size.

• Economy cars are usually the least expensive and smallest rental companies offer. These vehicles have room for one or two people, along with their luggage.
• Intermediate or compact cars offer more space than economy cars, usually through extra room in the trunk. They can typically accommodate up to four people and a minimal amount of luggage.
• Standard vehicles with full-size back seats have room for four adults. They also offer plenty of trunk space, making them a good choice for families that have a considerable amount of luggage to bring along.
• Luxury vehicles are premium vehicles that range from sporty convertibles to full-size SUVs and vans.

In most cases, the daily rental fee increases with the size and category of the car or truck. However, sometimes rental companies offer specials on vehicles in certain categories, especially if they have plenty in stock.

For example, if the company has a limited number of economy cars available to rent for a certain weekend, they may offer a discount on standard vehicles.

Here are the lowest daily rates in Los Angeles for different types of vehicles, according to Kayak:

Location

As with other goods and services, prices fluctuate according to supply and demand. Many people find better car rental deals near the center of the city instead of the airport.

Rental fees also vary in different regions of the country. Highly trafficked tourist areas may have lower rental fees than other locations because of the increased competition. But they may also have higher fees during popular seasons when demand is high.

Hopper Q2 2024 Consumer Travel Index

Age of driver

The renter’s age greatly influences the cost. The younger the driver, the higher the price. This is because young drivers are seen as a higher risk by rental companies. Many rental companies do not even rent to those under 20 years old. Eight of the main vehicle rental companies enforce a minimum age requirement of 21 years old.

Rental companies may charge additional fees for young renters. Depending on the state, these fees can range from $15 to $65 per day. Consider these higher prices when determining the driver for your rental.

Some states allow fees for drivers in certain age ranges. For example, renting from Enterprise in Michigan comes with an additional $36.50 per day fee for drivers 18 to 20 years old and $15.75 per day for drivers between 21 and 24. Young renters between the ages of 18 and 20 in New York can expect to pay an additional $64.75 due to their age.

But not every rental company charges these fees. Consider both the daily cost and additional fees when choosing where to rent from.

How to get the best deal on your rental car

Although a rental car’s price is based on a range of factors, you can still take a few steps to drive away with some extra cash in your pocket.

Comparison shop

Shopping around can save you money on your next car rental. Prices often vary by rental agency, so a little legwork could land you a much better deal. Comparison sites like Priceline, Expedia, AutoSlash and Kayak make it easier to compare rental car quotes.

Visit multiple rental agencies’ websites to ensure you’re getting the best price available on the vehicle.

Fill up the tank

Always stop to top up the gas tank before returning your rental car to the agency. You’ll avoid additional fees for refueling.

Book early

Booking your rental car ahead of time allows you to get the right vehicle, avoid long lines and potentially save money. This is especially important if you intend to travel around a major holiday.

Skip add-ons

Before receiving the keys to your rental, you will likely be offered several add-ons. Options may include a GPS, toll plan, access to XM radio or even car seats. Skip these options if you can to save money.

Rental car insurance is another costly add-on often presented when you reserve or pick up the vehicle. It can add $15 to $30 per day to the bill but could save you thousands if you’re involved in an accident or the car is stolen.

• The four types of common rental car insurance are:

  • Loss-and-damage waiver (LDW) or collision damage waiver (CDW): provides coverage if the car is damaged or stolen
  • Supplemental liability protection: protects you from liability if you damage property or other vehicles
  • Personal accident protection: pays for medical expenses for yourself and passengers (if applicable) in the event you get into an accident
  • Personal effects coverage: covers the cost of belongings stolen from the rental car

These protections may already be available through your credit card or current auto or homeowners insurance policy. Some have limitations, though, so be sure to confirm how they work with your credit card issuer or insurance providers.

Hidden fees and additional costs

Car rental companies also charge hidden fees that affect the cost of the rental. Some of these fees are built into the cost of the rental, and others may appear on statements several months after the rental period.

• Renting at the airport: Renting a car at the airport costs more than renting at an off-site facility. This is because the airport charges fees like an airport concession fee and a customer facility charge that the rental car company passes on to the consumer.
• Credit card holds: Some companies place an authorization hold on the customer’s debit or credit card. This charge, which ranges from $150 to $500, gives the rental car company some protection if the renter damages or fails to return the vehicle. The company releases the funds within a few days after receiving the rental car back in acceptable condition.
• Cancellation fees: Many companies charge a cancellation fee to renters who cancel their reservations less than 24 hours before the rental. If the renter paid in advance, the company would refund the payment minus the cancellation fee.
• Vehicle damage: Renters who damage the interior or exterior of the vehicle must pay for the repairs. Unwary renters may end up paying for damage caused by previous drivers. Thoroughly inspect the vehicle before driving it off the lot, take pictures of visible damage and alert an employee.
• Adding drivers: Most rental agencies charge a daily fee to add drivers to the rental contract. The cost is determined by the state and rental agency.
• Amending terms: Changing the terms of the rental agreement by modifying or extending it may also come at an added cost. The amount you’re charged will vary, and you may pay a higher daily rate.

Although knowing about these hidden fees helps renters understand why the total rental fees cost more than the advertised rental price, there is usually little that can be done to avoid them.

The bottom line

Rental car costs vary by rental agency, car type, location and driver age. You’ll also find that some markets are far more expensive than others. However, there are ways to lower your costs. Just as you would when comparing auto loans, shop around, don’t put off your booking and skip additional add-ons. Finally, be sure to read the rental agreement’s fine print to avoid incurring any unexpected costs.