Everything you need to know about car rental

Apollo 4WD camper

The third part of our international travel guide tells you how to book your rental car for your holidays.

Which car do you need

When it comes to car rental, almost every need can be satisfied. Available cars range from regular cars, camper vans and recreational vehicles towards highly specialized four wheel drives. Below we give you a short overview on the different car categories you can choose from.

Regular car

This category includes the type of car most of us drive in our daily lives. This market segment is dominated by a few big players like Hertz and Budget you will find at every airport in the world. Depending on your budget you can drive away in a small compact car or a high end sports car. You want to choose this category when you stay at hotels or motels while exploring the country.

Camper Van

Usually equipped with a mattress and a small cooking facility, a camper van combines the benefits of accommodation and transportation. Not necessarily cheaper than renting a limousine and stopping at a bed & breakfast but the icon of freedom. You will choose this type of car if your definition of freedom includes driving to the ocean, watching the sunset and waking up at the same spot.

Recreational Vehicle (RV)

This is the bigger brother of the camper van and you better enjoy driving very large vehicles when opting for it. On the other hand, if you dream of traveling in your living room or want to take a large family, this is what you aim for. There is one thing to keep in mind, though. The size of these vehicles prohibits you to venture in very remote areas with un-maintained roads and limited accessibility.

Four Wheel Drive (4WD)

In contrast to the RV, this vehicle keeps you going even  if sealed roads and bridges are missing. As long as you have your spare tire you are free to hit the dirt road. Some companies even combine the benefits of a camper van with the 4WD. The ultimate tool to explore even remote locations.

You do not have any experience in off road driving? Don't worry, most of the time it is only the high clearance and the suspension you need for off road driving. We never took any courses before renting 4WDs and mastered all obstacles on our way. 

The true costs of car rental

To allow for a fact based decision on car rental, you need to look further than the advertised rental prices. You need to understand the true cost of a rental to compare different offers.

To make the comparison easier, we compiled an Excel file which will help you gather the relevant information and compare the available options. You can download the file for free as a registered users of ActiveTravel.Rocks.

Using the same file for our own planing, we can assure you it is quite eye opening to compare prices in a structured way. For the camper van rental suddenly the full insurance coverage is the cheaper while for the 4WD you clearly see how choosing the basic coverage saves you 25% in costs. All you need to start your own comparison is:

  • The rental price
    This is the price you pay for the car and basic insurance coverage. If the company offers pickups downtown and at the airport, rates rates at the airport are usually higher than in the downtown office. Depending on the company different additional costs connected to the pickup of your car may occur. Is the company operating an office at the airport, rates are usually higher than in their downtown office.
  • Insurance
    The costs for any additional insurance coverage offered by the rental company.
  • Bond
    This is the down payment you have to do when going for basic insurance coverage. In case of an accident covered by the insurance, this is the maximum amount of money you have to pay to cover the costs.
  • Regular credit card fees for foreign currency payments
    Depending on your credit card you have to pay up to an additional 2% when paying in a foreign currency. This is for every transaction on the credit card. As a consequence, when the rental company requires a bond (usually if you choose basic insurance), you will be charged the 2% twice. Once when you pay the bond and once the charge it back. Therefore, even if you do not have any accident, basic insurance on the vehicle can cost you up to 4% of the bond value.
  • Credit card fees imposed by rental company
    In addition to the regular fees, some rental companies add an extra 2% percent if you pay with credit card. As a local you might have the chance to avoid this using a debit card, as tourist you will not get around these fees.
  • Taxi costs
    Companies, especially those renting out camper vans and specialized vehicles usually do not operate an office at the airport. If the rental company does not offer a free shuttle service to their pick up location we should include the costs for a taxi in our calculation.

Additional points one might want to consider to fully compare different options

  • Second driver costs
    Does the offer include a second driver or do you have to pay an extra fee? In addition, fees for drivers younger than 25 usually are higher. On the other hand, there is nothing preventing the individual office from reducing or dropping this fee. So why not giving your negotiation skills a try and call the office directly?
  • Fuel efficiency
    Fuel efficiency varies across vehicle types and can have a significant impact on the over all costs. As  rough guideline we suggest to use the following fuel consumption: Compact car: 6 l / 100 km, Limousine 10 l / 100 km, Camper Van 12 l / 100 km, 4WD 12 l / 100 km, Sports car: 12 l / 100 km
  • Toll fees
    Toll fees probably are not the deal breaker when deciding if you want to rent a car. Nevertheless it is advised to truly understand how the toll system works. Any unpaid fee incurs a fine which will be sent to the rental company which they will forward to you. On top of the fine the rental company will charge your for their administrative work. This charge occurs for every letter they forward to you and easily adds up.
  • Authorization hold
    Unlike with a bond, an authorization hold only blocks a certain amount on your credit card. So as long as you return the car in good shape no costs occur. It reduces your limit on the card though. And once you have an accident the hold is fully charged with the fees described above applying.

What kind of insurance do you need

No matter what car your rent, you want to make sure you are insured from the time you get into the car to the moment you give it back. In general there are three types of insurance you need to look out for.

Car insurance

This insurance covers any damage towards the car you are renting. Should you pay for the car using your credit card, place ensure what kind of insurance is provided by the credit-card company before booking any additional car insurance.

Usually you can choose between basic coverage or full coverage and any option offered in between. In a very crude simplification, basic coverage is cheaper but in case of an accident, you have to pay a substantial liability. In addition, the contract is for a specific car only. Therefore, after the accident, you need to wait for the repairs to be finished before you can continue your journey. Full coverage on the other hand comes with a higher rate, no liability and usually you get a new car while the other one is in the garage. You still have to pick up the new car, though which can still mean you have to organize to travel several 100 km.

Watch out for any applying conditions though. In many cases, single car accidents are not covered and if you total the car due to speeding you have to pay the bill out of your own pocket.

As described in our overview article, it usually pays to choose a travel insurance which covers the liability of the car rental contract. There is two things to remember, though. First, you will not get reimbursed without showing the bill. Second, the travel insurance only covers liability for the insurance provided by the rental company. Especially for 4WDs, the companies usually do not provide coverage for under body or roof. Therefore the travel insurance won't cover for this either.

Our advice: As the insurance from the car rental company is the most expensive on, go for basic coverage and get the liability covered using a separate insurance. Be prepared that once you pick up the car, the clerks at the counter try everything to convince you to get their insurance. Do you homework before, know what your insurance is covering and you can ward them off easily. This approach helped us to save 1000$ in Australia.

Automobile liability insurance

This insurance covers any damage your car causes to its surroundings. Here special care needs to be taken, as in some countries this insurance is not required by law, while in others the mandatory coverage is ridiculously low and within the US even changes from state to state. We recommend to have at least a coverage of about 1 Mio. US$. If the rental company does not offer this coverage try to get a supplementary coverage via a third party. An automobile club like AAA or ADAC usually is a good starting point.

Passengers' accident insurance

This insurance covers any medical costs for your passengers. Usually you should already be covered through the health and/or accident insurance discussed in our article on travel insurances. Should you plan to take on passengers you meet on your travels, this type of insurance might be worth having. If they don't have coverage on their own and bad comes to worst, you might be liable for any of their medical costs.

General tips & Conclusion

After covering the important issues we want to close this article with some additional points worth to consider when renting a car.

  1. If the details on your driving license is not written in English language you must get an international driving license. Without it you will not be able to pick up the car. This international license is an official paper from your local authorities translating your driving license into English language. It usually is valid for five years only.
  2. Get yourself a credit card to pay for the car. With most rental companies, their whole infrastructure is geared towards this kind of payment. Even if you have all the money you need in cash, they will not accept that.
  3. Book your car early enough to allow the rental company to get the vehicle to the location of your choice. Booking 24 hours before your arrival is too short of a notice to come up with special wishes.
  4. Check if it makes sense to pay the car with your airline miles.
  5. Depending on your travel plans you might consider to look out for relocation deals. The rental company gives you a demanding schedule on when you have to deliver the car to a specific location. In return you more or less have to pay for the gas only.

Should you have any questions not covered in the article, do not hesitate to contact us or put your question in the comments.

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