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LESSON 14

Saving On Car Rental

 

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Updated, September 17, 2020

What You’ll Learn In This Lesson

How to get the best deal on your car rental
How to avoid paying big bucks for Loss/Collision Damage Waiver insurance

In these next few lessons, we intend to cover various aspects of trip planning that travel optimizers pay attention to only after they have secured their award flights, and found a place to stay, usually in that order.

These would be the extras that will enhance your travel experience significantly.

If flights and nights are the meat and potatoes of the travel rewards game, then the next lessons are about all the sides and desserts–the icing on the cake, if you pardon the mixing of metaphors.

We’ll structure these last few lessons in this order:

  1. Optimizing auto rentals, the travel rewards way.
  2. Lounge access.
  3. Airline and hotel elite status.
  4. Travel insurance.
  5. Expedited travel screening and processing

Let’s get started.

Optimizing Auto Rentals

At some point in your travels, you are probably going to need to rent a car, especially if your vacation plans involve kids, getting around cities with inadequate public transportation networks, or, traveling far away from cities.

For those moments, a car might be a great idea, and yes, there are ways to travel optimize these as well.

First, Consider If You Really Need To Rent A Car

If where you are headed has great public transportation, a car might be more of a hassle than it is worth. Also, if your hotel charges a nightly parking fee, that seemingly inexpensive car rental can jump up in cost quite quickly.

Also, if you’re under 25, the surcharge that car rental companies slap on younger drivers might actually cover the cost of an Uber or Lyft in the US. It’s great that Uber also operates around the world, but note that any Uber credit you have from the US cannot be used abroad.

In other parts of the world, rideshare apps can be even better value for money and save you the hassle of driving in an unfamiliar city. Some examples:

  • Grab: Singapore, Malaysia, Indonesia, Thailand, Vietnam, Mynamar, Cambodia.
  • Ola: India
  • Didi Chuxing: China

Another way you can avoid renting a car in the U.S., parts of Canada, Germany and the UK is by using Turo.

With Turo, you are using someone else’s car – think of Turo as the Airbnb of cars. 

It’s usually a lot cheaper than booking directly with car rental companies. However, note that the primary and secondary insurance provided by credit companies do not cover privately owned vehicles, which means you’ll have to use your own insurance, or, buy the insurance provided by Turo.

International Driver's Permit (IDP)

If you plan on driving during your travels, you may need an International Driver’s Permit (IDP).

Countries like Canada and Mexico do not require U.S. citizens and residents to have an IDP, but there are several situations that make having one a good idea:

  • Countries that do not recognize U.S. driver’s licenses.
  • Countries that may accept a U.S. driver’s license, but require a local language translation.
  • Avoiding miscommunications at the car rental company.

To find out if the country requires and IDP, go to the US State Department’s Country Information page, select your destination in the search bar on the left, then scroll down to the “Travel and Transportation” section.

To apply for an IDP, go to the AAA site.

Getting The Best Auto Rental Deals

I usually avoid renting directly from the car rental companies, except when my three teenagers join us for a family vacation and we need a larger premium vehicle.

For those instances, my elite status with National and Hertz usually gets me a large SUV or MPV for the price of a mid-sized car. So that’s usually a good deal.

Other times, here’s what I do to get the best deals:

Price out rentals from locations away from the airport. By taking an Uber or Lyft, I usually get a better daily rate than an airport pickup. Where I return the vehicle depends on how much the drop fee is. If the drop fee is less than an Uber to the airport, it makes sense to just return the vehicle at the airport location.

Use Online Travel Agencies (OTA) like Hotwire.com through a cashback portal like Ebates. When I travel alone or with my wife, all I need is a compact or economy vehicle, and I usually get a better deal with an OTA (most are owned by Expedia and Priceline).

Check out Costco or BJs, which sometimes has solid deals for members.

After I’ve made my refundable booking, I plug my details into Autoslash, which does a really great job of tracking and notifying me of price drops from all OTAs. If the price drops significantly, I make a new booking and cancel the old one.

Status With Car Rental Companies

We’re not going to get too much in the weeds with elite status with car rental companies, but we thought it would be useful to get an overview of the benefits, especially if we can get the status for free with premium travel credit cards.

Some of the benefits of elite status include:

  • Discounted rentals
  • Bypassing the lines at check-in counters
  • Guaranteed availability and car delivery at the terminal
  • Free second driver
  • Free upgrades
  • Getting to pick the vehicle you want
  • Accelerated schedule to earning free rentals

Getting Free Car Rental Status

Here’s how to get elite status with a credit card without having to chalk up lots of rentals:


The issue I have with renting a car directly from the car rental companies is that it often costs more than online travel agencies like Expedia and Priceline. On the flipside, most car rental loyalty programs only accord you your elite status benefits if you rent directly from them.

Which to choose? It’s up to you.

When I travel alone or with my wife, we only need a small car. So I’m inclined to go with an OTA. When all three teenagers travel with us and I need a bigger (and costlier) vehicle, I rent directly an agency where I have elite status to get the vehicle upgrades.

Saving On Gas

Most times, you’ll end up paying more if you accept the car rental company’s pre-pay option for a full tank of gas.

You’ll tend to pay more per gallon than what is charged further away from the airport, and odds are, you’ll rarely return the car at close to empty.

Instead, decline the option, and use an app like GasBuddy to note gas prices around a 25 mile radius of the airport, then compare that to what the car rental company is offering.

If you routinely earn your new card or category bonuses by buying gift cards from one of the Kroger and Albertson chains, you may even have enough gas points stashed to save $1/gallon, bringing the cost of your rental way down.

Saving On Car Rental Insurance

One of the craziest ways to double the cost of your car rental is to pay for the Loss Damage Waiver (LDW) or Collision Damage Waiver (CDW) offered by the car rental company. There is no reason for those of us in the almost-free travel game to spring for those extras.

LDW/DCW covers the cost of the car if it is damaged or stolen.

If you have personal auto insurance, check with your provider if your policy covers rental cars in the US and internationally. If so, you can safely decline LDW/CDW.

The downside of using your personal policy is that, in the event of a claim, you’ll have to pay the deductible, and your premium will likely go up.

Many travel credit cards offer some form of free coverage, but most are secondary to your personal auto insurance policy. This means that these policies will only pay out on a claim after you have exhausted the coverage of your personal policy.

When Secondary Coverage Becomes Primary

There are a couple of exceptions where the secondary coverage becomes primary:

  1. You do not have your own car rental policy in the US, or
  2. You have a policy, but it does not cover rentals overseas.

If either situation describes you, you can turn down the car rental LDW/CDW, and use your credit cards secondary coverage as primary.

The two specific situations mentioned above will not be relevant for most people, however.

For the rest of us, premium travel credit cards offer provide primary coverage if used to pay for the cost of the rental.

Credit Card Car Rental Coverage

If you are using the car for personal use, these personal cards provide primary coverage:

If you are using the car for business use, these business cards provide primary coverage:

Don’t have or don’t want any of the cards above? You may be able to get a workaround if you have an American Express card by enrolling in its Premium Car Rental Protection.

The Amex option is not free, but it’s reasonable for the primary coverage that you get.

The cost is a flat amount per trip (not per day), so whether your rental is one day or 30, it’ll cost either $19.95 or $24.95. The cheaper option covers the car up to $75,000, and the pricier one comes with $100,000 of coverage.

There’s no deductible to pay, and coverage limits are much higher than a typical credit card policy.

Regardless of what credit card you use, and whether it is primary or secondary coverage, there will be exceptions and exclusions, such as type of vehicles, duration of rental, and country of rental.

If you found this course on travel rewards helpful, you may also enjoy this free illustrated guide, packed with many other ways to get more for your buck and win back your financial independence.

Course content originally produced by ChooseFI was edited/updated by CardRatings for this lesson.