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Getting the best deal when you rent a car

Travelers have been able to score decent deals on hotel rooms and airfares over the last year. But car rental prices have increased dramatically despite the weak economy.
Travel Car Rental Tips
Travelers have been able to score decent deals on hotel rooms and airfares over the last year. But car rental prices have increased dramatically despite the weak economy.James A. Finley / AP
/ Source: The Associated Press

Travelers have been able to score decent deals on hotel rooms and airfares over the last year. But car rental prices have increased dramatically despite the weak economy.

“It's the one area of the travel industry where you have not been able to get a break,” said Nina Willdorf, editor-in-chief of Budget Travel magazine, which plans a story about car rentals for its December-January issue.

Compared with a year ago, rental prices increased nearly 50 percent on daily rates for midsize cars booked a week in advance, according to the Abrams Travel Data Rate Index, which tracks major car rental brands. The Abrams Index found an average daily rate of $93.06 on the fourth Monday in October this year, compared to $64.56 on the same day a year earlier.

Prices were also up more than 50 percent for a compact car booked a week in advance, with an average weekly rate of $289.14 on the fourth Monday of October, compared to $188.46 on the same day in 2008, according to the Abrams index.

“Why do they charge these rates? Because they can get them,” said Neil Abrams, president of the Abrams Consulting Group in Purchase, N.Y.

He said car rental companies responded differently to the weak economy than hotels and airlines. “When you have a 30-story hotel and demand falls 20 percent or more, you can't lop off some of the floors, but you can reduce prices,” he said. “And it takes airlines months to shut down routes and get planes out of service. But the ability of a rental company to scale down a fleet of cars is much more nimble.”

Car rental companies have cut the number of new cars they buy for rental fleets 25 to 50 percent, Abrams said. Demand for cars is down, too, but reduced supply is what really drives rates up, he said.

So to get the best rates possible, consumers need to do their homework. Here are some tips:

Look for discounts
“There are hundreds of membership programs and professional associations that offer discounts,” said Paula Lyons, who lists 350 discount codes for eight car rental companies on her Web site.

Sources for car rental discounts include AAA, unions, frequent flyer and loyalty programs among others. Your employer may also have a corporate discount rate with one rental company that workers can use for leisure trips.

Joining a car rental company's loyalty program is free and not only gets you a discount, but lets you skip the line at the airport to get your car right away as a preferred customer, Willdorf said.

Search for car rentals on travel-booking Web sites
“You can quickly and easily see how the prices compare,” said Willdorf. But know the terms. Does the quoted price include taxes and fees? in particular is known for offering deals. “The general rule of thumb is bid 40 percent less than what you're seeing advertised,” Willdorf said.

Just remember that prepaid reservations on Priceline are “non-modifiable, non-refundable and non-cancellable. That's the reason they give you such a great rate,” said Lyons.

Book in advance
“You can book a car two months in advance, then call back every three or four weeks, give your reservation number, and see if the price has gone down,” Lyons said. “You can usually rebook at whatever the lowest price is. I would even call the day before to see if there are any last-minute specials.”

Check out alternatives to the big car-rental agencies
Willdorf said many Toyota dealers and some Ford dealers rent out cars by the day from their lots for as low as $36 a day. Check Web sites for dealers in your destination area.

And Rent-A-Wreck is “an unfortunate name for a very useful service,” Willdorf said. The company has lots near 38 airports. Just know that their vehicles are not new — they have between 40,000 and 80,000 miles on them, Willdorf said.

Willdorf said Budget Travel's price comparison showed a daily rate from Hertz at $106 a day compared to Rent-a-Wreck for $28 a day.

A car-sharing service like ZipCar might be an option if you only need a car for a few hours during your trip. But the costs add up — membership fee, hourly rates, and substantial penalties for returning a car late.

Airport-related taxes add about 10 percent or more to the price of a car rental, Willdorf said.

“Just leaving the airport and picking up a car in the city can save you money,” said Willdorf.

If you have to take a cab into town, of course, you lose any savings you might realize, but if you're taking a free van to your hotel or public transportation, it could be worth it. She added that some rental companies will also drop a car off to you.

If you have collision and liability on the car you own, you probably won't need additional insurance for a car rental for a leisure trip, Willdorf said.

Some credit cards also provide car rental insurance if you use the card to pay for the rental. But call your credit card company to be sure, and ask about the terms. The credit card insurance may not cover a period longer than a 30-day rental, for example.

Credit card companies may also require extensive documentation from the car rental company before making good on a claim. For example, some car rental companies charge “loss of use” fees, which means you'll be charged a fee for every day that a damaged car is in the repair shop, because the company is losing money keeping it off the road. A credit card company may demand fleet vehicle logs before paying that fee, Lyons said.

Lyons said she and her husband always buy insurance from rental companies because “for us, it's worth it to know that if something happened, you can just walk away.”

Hybrid cars are more expensive to rent than conventional cars, but if you're taking a cross-country road trip, you could save money on gas.

Willdorf said has the most comprehensive listings for hybrids, and Enterprise and Hertz have the most hybrid cars in their fleets.