How to save money on your holiday car hire

Booking holiday car hire can leave you out of pocket, but knowing what to look out for and how to get the best price will leave you with more spending money for your getaway

Family on holiday travelling in hire car
(Image credit: Getty images)

If you want to hire a car in Europe this summer, you’ll find prices have shot up a whopping 55% compared with pre-pandemic days. 

According to Ernesto Suarez, founder and CEO of (opens in new tab), this is because, “with fewer people wanting to take public transport, there’s an increased demand for rental cars, and a worldwide shortage of new cars, which is causing costs to rise for tourists”.

One week’s car hire now costs an average of £491, with costs increasing significantly in particular destinations. For example, hiring a car in Crete for a week can cost £658, while you’ll pay £620 in Faro, £584 in Dubrovnik and £530 in Nice.   

And adding ‘extras’ to your car hire package, such as adding a second driver, child seats or a sat nav, can bump up the bill by another £350. 

So, what can you do to ensure that hiring a car for your holiday doesn’t end up breaking the bank?

 Shop around for the best hire car price

Don’t book the hire car deal offered by your travel operator as these are often far more expensive. You can cut costs by shopping around using price comparison sites like Zest or Skyscanner (opens in new tab) which check deals across the big companies including Hertz (opens in new tab), Sixt (opens in new tab), Europcar (opens in new tab) and Alamo (opens in new tab).

You can also try a local broker, like Amigo Autos which covers Spain. Or if you only want a car for a couple of day trips, then it may be worth using a small local operator. It’s a good idea to speak to your resort ‒ they will often partner with local operators, and be able to help you find a good deal.

It’s important to check the cancellation details, in case your plans change. Some companies, including Avis and Zest, will allow free cancellation up to 48 hours before your rental is due to start.

Book 7 to 13 days in advance for the best price 

To get the best price, book at least seven to 13 days in advance, which could save you around 27% off the price you would pay if you just turn up on the day or book too far in advance. 

Holiday car hire will always suggest booking your car as soon as you can, even up to twelve months in advance, but you may be able to find cheaper prices booking nearer the time. 

"For those who are currently planning their summer holiday in Europe and renting a car, seven to 13 days in advance of the pickup date is typically the best time to find a great deal," says Evan Day, UK country manager at online travel agency Kayak. 

"On average, travellers could save up to 27% by booking 7-13 days in advance compared to booking 26 weeks in advance, which according to the data is the most expensive time to book," he adds.

However, If you find a provider offering free cancellation, it could pay to snap up a rate when you can, and then shop around again before you travel, knowing you can cancel your first booking fee for free.

Companies including Avis, Hertz, Zest and Budget all offer free cancellation up to 48 hours before arrival, but check cancellation terms carefully, so you know whether to cancel online or ring the call centre. With Zest, you can pay an extra fee to cover cancellation up to the day of booking. 

If you don’t turn up on the day to collect your keys, you may incur a ‘no show’ fee. Hertz charges a ‘no show’ fee of around £80 within Europe, however according to its terms and conditions, you may be able to reclaim the pre-paid cost of your rental minus the ‘no show’ fee if you write in within 90 days.

Book the smallest hire car you can 

Cramming your family plus luggage into a tiny car is nobody’s idea of fun. However, there is a certain logic behind booking the smallest car you can ‘comfortably’ fit in, as you may get a free upgrade. 

Smaller cars tend to be most popular among tourists and go first, so if there’s none left when you walk up to the rental desk waving your booking form, you can get a free upgrade on the next model up.

Beat the ‘hard sell’ on hire car excess insurance  

Be prepared for a sales push if you’re picking up your car from the airport rental desk.

Car rental prices often include collision damage waiver insurance (CDW). This covers the bulk of the damage in the event of a prang, however as with your own car insurance there will still be an ‘excess’ to pay.

This can range from £500 up to £2,000, so you may want to consider buying ‘excess protection insurance’. 

“Pre-purchase your policy from a standalone provider or you may be ripped off at the car rental desk”, advises Ed Sharpe, head of car hire partnerships at TravelSupermarket (opens in new tab). (opens in new tab)

“Policies start from as little as £3.99 per day for European cover, compared with as much as £20 per day at the desk”.

Excess protection policies from carhireexcess (opens in new tab) and iCarhireinsurance will cover up to £7,500 in excess charges, from just £2.50 per day. 

Read the hire car rental agreement 

This is never going to be the most fun reading on the planet, especially when you’d rather be thinking about your upcoming holiday, but it’s worth checking the hire car small print to avoid being caught out.

It’s important to check for late drop off charges, which might kick in should you break down on the way to the airport, while it’s also a good idea to check where to park if you’re returning the car after the rental office is closed.  

And always make sure you have emergency contacts for the car hire office in case you get stuck if the car won’t start.

Pay for your hire car by credit card 

Paying for your car hire with a credit card entitles you to automatic legal protection under section 75 of Consumer Credit Act. 

This legislation means that should your car hire bill come to £100 or more, and you pay for at least £1 of the bill with your credit card, you can ask your credit card company to stump up the cash should the hire car company go bust, or there’s a problem with your car.

Some rental outlets will expect the main driver to hand over a valid credit card too. 

“You’ll need a couple of grand in credit on it, or you may not get your vehicle”, warns Martyn James, consumer rights expert at Resolver, (opens in new tab) an independent complaints resolution service.

“This is because the company will ‘check’ to see you have money on the card to cover excess fees, in the event of any damage”.

Beat hire car fuel surcharges 

It’s worth checking the situation with fuel when comparing car hire prices, as this can bump up the bill.

Smaller local outlets may be happy for you to drive off and return the car with the same level in the tank. The ones to avoid are those that insist on you filling the tank and whacking on a hefty surcharge if you fail to do so. In some cases, rental firms will charge you three times the value of the fuel at the pumps if you don’t bring the car back with a full tank.

With soaring fuel prices, this can mean a lot of money down the drain.   

Don’t pay out on old hire car dents 

Before you jump in and drive off, take time to look over the hire car first.

“The biggest car hire scam is unnecessary repairs,” warns Martyn James.  

“When you return the car, the company will log a minor scratch on the sign-off documentation, then inform you that an entire bumper, panel or car part needs replacing, which is why it’s so important to keep detailed records of the car,” he explains.

Ideally you should get shown round the car first so you can check for damage and make sure any scuffs or dents are noted on the contract.  If that’s not the case, whip out your phone and take a video tour of the car, as proof of its condition, and do the same when you hand it back.

Dropping off the hire car

It’s crucial to check where you will need to park your hire car at the end of the rental, especially if you’re booked on a late night flight, when the rental office is closed.  

Park in the wrong place and it can mean hefty car park charges or penalties being added to your bill. And be wary of the ‘leave the keys under the mat’ scenario, in case the car is damaged after you leave. 

Sue Hayward

Sue Hayward is a personal finance and consumer journalist, broadcaster and author who regularly chats on TV and Radio on ways to get more power for your pound.  Sue’s written for a wide range of publications including the Guardian, i Paper, Good Housekeeping, Lovemoney and My Weekly. Cats, cheese and travel are Sue’s passions away from her desk!