The ultimate guide to stretching your dollar when renting a car

The following are the 18 best tips and tricks for renting a car that 3 savvy business travelers, with 100’s of car rentals under their collective belts, could come up with.  These tips are targeted at people who want to maximize the dollars they spend on a rental car.

At BYM we don’t recommend being a cheapskate for the sole reason of hoarding pennies, but we do believe in only spending money if it is genuinely worth it to you.  Many of these tips help you have an equivalent experience for the same price, and help you limit expenses that sound reasonable at the time, but don’t really add much to your happiness in the long run.  Vacations and travel are a typical place where you can overspend if you don’t have your priorities straight in your head.  You’re on vacation and you’re worth it, so spend the money, right!  Wrong.  You deserve to have a great time and come home to your intact emergency fund and paid-off credit cards (or, if you’re new to living below your means, come home to your hard-earned progress on those two fronts intact.

Getting the most bang for your buck while traveling is a great way to let you see more places and spend more of your hard-earned money on fun stuff when you get there!   Renting a car when on vacation can be a real convenience and — depending on how much you need to get around — it could actually cost less than using other forms of transit.

Like many industries, the rental car industry makes the majority of its money through the obfuscation of its pricing structure, add-on services and fees.  Not only do prices vary widely from company to company, but the exact same car from the exact same company, for the exact same dates and location can have a drastically different price depending on what deal you get.

So know what’s important to you, have fun, and consider these ideas to help you get the best value for your dollar on your rental car:

 

DECIDING ON THE RENTAL

 

#1 – Decide if you really will use the car

Before renting a car, make sure it makes sense.  For example, most would say renting a car in a taxi and subway friendly like Manhattan is crazy, as even the locals don’t own cars.  Doing so will cost you not only the price of the rental, but as much as $50 a night in parking fees.  Even with pricy taxi fares, it may actually be cheaper and easier to not rent a car.    At a theme park vacation many hotels provide free or discount transportation between the hotel and the park, as well as other area attractions and major airports.  Think about what you are going to be doing on the trip, and how much you will use the car compared to other sources of transit.  Be sure to check your hotel parking rates, especially in a city.  And don’t forget to consider the cost of gas.

 

#2 – Make a reservation, but make it really early or very last minute

Reserving a car in advanced, especially when done via a website prevents all the hard-sell hassle of the rental counter.  It also can help you get the car you want and the best possible deal.

Like many industries that have time-sensitive inventory, the rate of a rental car changes over time based on availability.  If you show up the day you need the rental, you may end up paying the full retail rate — or in hotel terms the “rack rate” — which will definitely cost you.   Worse, you could be forced to rent much more car than you need, because it is the only vehicle available.  Booking ahead of time will help guarantee both that there is going to be the car you want / need waiting for you, and that you take maximum advantage of discounts, etc.We researched intermediate / mid-size car rental rates for every major US rental company at 4 major US airports.  This was done via each company’s website and no corporate or coupon codes were applied.  We researched rates at 14, 30, 45, 90, 180 and 240 days out from the reservation time.  The results were very interesting:

As you can see, “last minute” or in our case 0 to 30 day reservations rates were by far the best.  This was followed by a mountain of price increases that peaks around 90 days out.  The conclusion of our research is that you should book no more than 30 days from your arrival date or at least 240 days in advanced to get the average best price.

Quick Tip: Many companies let you cancel your reservation for no charge.  If this is the case, consider booking early, but then shopping around for last minute deals as your travel date arrives.  You may be able to cancel and re-reserve the same car for less money.

 

#3 – Consider paying up front

One of the advantages of living below your means and actually having savings is that you can pay for things up front.  Car rental companies (and hotels) provide discounts for doing so.  The discount ranges from 5 to 20% and is definitely something to consider.  Our research has shown that on a short notice rental, Budget has offered up to 60% off for using their “Pay Now Rate”.

Quick Tip: Be sure to read the fine print, sometimes when you prepay there are fees associated with modifying or canceling your reservation.

 

#4 – Reserve the smallest car you need

Why rent more than you need?  Most cars seat the same number of people and larger cars sometimes only offer marginally more room for comfort.  As a rule, I rent the smallest car I need… this stretches my dollar in multiple ways.  First the rental price is less, the lower rental price means the taxes and fees are less as well.  Smaller cars tend to get better gas mileage, so you spend less at the pump.  You also always have a chance of being upgraded for free, so you may end up with a larger car than you book anyway.  But see Tip #12 for thoughts on the cost of those ‘free’ upgrades.

 

#5 – Shop Around(Duh!)

This one is obvious, but it needs to be mentioned.  Shop around not only between different rental companies, but also different online rental sites, and rental aggregator sites like Expedia, Kayak, Priceline and others vs. the car rental sites themselves.  A recent check on Expedia.com shows a basic 4 day rental from Regan Nation Airport Renting an ‘economy car’ can range from $240 to $358 depending on the company you go with.  In our example the most expensive choice was Hertz, however when we checked Hertz.com, we found the exact same car, the exact same dates, for $282, or $76 less than the Expedia.com price.

Again, price is not everything – sometimes loyalty has its own rewards such as frequent flyer miles, points, upgrades, free rentals, etc.  To maximize this, consider picking two programs to join and stay between the two of them.  If the difference in price is minor, try to focus your rentals with one over the other to maximize the frequent rental perks.  I personally belong to Hertz Gold and Avis Preferred and will simply shop between the two of them to get the best deal.  When the difference in rental is $10 or less, I usually go with Avis to stay in their First tier.While not always true, especially when corporate or coupons are taken in consideration, our research shows that Hertz and National are the almost always the most expensive option, while Dollar, Thrifty and Enterprise are almost always the lowest.  Avis, Budget and Alamo rid the middle.

The follow chart shows single-day, mid-size rental car rate averages for 4 major US airports at 14, 30, 90, 180 and 240 day reservations.  We compared prices for all major US carriers: Avis, Hertz, Budget, Dollar, Thrifty, Enterprise, Alamo and National.

Quick Tip: Save yourself some time and don’t bother comparing between Dollar and Thrifty, our research shows there prices are almost 99% identical for all locations and dates that we sampled.

 

#6 – Be mindful of hidden fees and fine print

In addition to the usual fees and options like insurance (See Tip #8) and frequent flyer mileage program fees (See Tip #14) there are numerous other fees you need to look out for.  Here is a short list, but there are others:

  1. Under 25 Renter – Some companies charge extra if you are under the age of 25. Note: Some insurance companies allow you get around this through especial agreements with particular rental car companies.
  • Per Mile – Some companies or rental options require you to pay for miles instead of offering the standard unlimited option.
    1. Smoker Cleaning Fee – If you smoke in a non-smoking car, you may get charged $250 or more in cleaning fees.
    1. Alternate Driver Fee – Sometimes only the renter is allowed to drive, other times it is anyone in the party.  This varies based on state law and individual rental car company policies

 

#7 – Avoid fancy vehicles

Remember, this is a rental. Aspirational rentals are an even bigger waste of money than aspirational purchases. Unless the highlight of your trip is the car you drive, avoid renting fancy vehicles.  Hummers, Corvettes, Camaros and convertibles are nice to look at, but will cost you 2 to 15 times as much as a “lesser” vehicle.  Is it really worth it?   The $200 to $500 bucks you don’t spend on your rental can be put to something that will be much more memorable to you then an overpriced ride.

As an example, consider a two day Las Vegas rental for Friday through Sunday, where you could pay $51 for a generic compact car, or $319 for a Cadillac CTS.  That’s a $268 difference for two days of “luxury”.  If having a larger car is important to you, why not rent a Buick for $78?  And what are you in your rental car anyway?  You should be at the pool, or taking the money you didn’t spend on the car and booking a helicopter tour of the Grand Canyon, or even gambling if that is your thing.

Living Richly Caveat: If having the sweet ride is a key part of the experience for you, then go for it.  But, how do you know if it really is key?  Like everything it helps if you are well centered in what is important to you.  But ask – does it fit in your overall vacation budget?  Is there something you’d rather do either on the trip or with the extra money?  Odds are that if you asked yourself “if I could spend this $250 on anything, what would I buy?” you’ll find the answer, and it won’t be ‘rent a Corvette’.

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