Art of the Cheap Rental Car

rental car agent meme

You NEED a car to explore America.  The glory of taking a classic American road trip (my favorite form of travel) is rendered prohibitively expensive if you overpay for a car rental.

I have taken two multi-week road trips across the U.S.  The only way I was financially able to do it is by figuring out how to protect myself from the intentionally misleading car rental up-sale techniques.

It is actually possible to rent cars for VERY affordable rates while still being completely covered from an insurance standpoint.

In most cases, it will turn out being cheaper (and more convenient) to rent than to use your own vehicle.

This post will address the two primary drivers of rental car cost:

  1. Insurance
  2. Pick-up Location

01: Insurance – largest cost driver – How to reduce/eliminate it

Car rental companies advertise cut-throat low prices for daily rates in order to stand out from the competition.

However, once you actually start to book a car online or fill out the paperwork at the agency, you are presented with insurance packages that easily DOUBLE or TRIPLE the rate.  The websites and sales agents use misleading scare tactics to sell you insurance you don’t actually need.

Each persons situation varies, but you likely already have the appropriate coverage.

Here is a 2 minute education:

There are four categories of auto insurance:

Insurance TermSituation it Covers
Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW)Theft of the car or damage to the car in an accident
Personal Accident Insurance (PAI)Injuries to you
Personal Effects Protection (PEP)Personal items that get stolen from the car
Liability Protection (LP)Damage you do to others

*Note: Sometimes car rental companies use slightly modified terms to intentionally make things more confusing.


Insurance you ALREADY have and what it covers:

Insurance You Already Have
What it Covers
Personal auto insuranceThis DOES carry over to your rental car
It covers:

  • Theft of car or damage in a wreck (CDW/LDW)
  • Liability Protection (LP)
Personal Health InsuranceThis will cover your medical expenses resulting from an accident (PAI)
Home Owners or Renters InsuranceThis covers items stolen from your car (PEP)
Credit Card Insurance Benefit
(If you use the credit card to pay for the rental)
This usually covers (CDW/LDW).  It will serve as secondary insurance if you already covered by your auto policy.

Before you go to a rental agency, call the above listed insurance sources and verify that you are indeed covered and you are comfortable with the limits and deductibles.

You will likely see that you are already fully covered and any insurance purchased from the rental agency would have been ENTIRELY REDUNDANT.

If you do your homework, you can confidently turn down every up-sale insurance they throw at you.  (I like to smirk at them while I do it and say this…..)

You need to be insistent.  Rental agents make their money from selling insurance.  I have had them lie to me and tell me I am required to get insurance.  I have also had them try to add it to the bill even after I refuse.


02: Pick-up Location MATTERS

I always stick to the large, nation-wide rental companies.  I do this because they are the ones that are most likely to have locations all around the country that I can access if I have car trouble or want to switch cars at some point during the trip.

Large rental agencies can have several rental lots in a single city.  Believe it or not, prices for a rental for the same car, from the same company can vary by as much as 50% depending on which lot you pick the car up from.  They have algorithms that automatically adjusts prices based on demand and inventory at a given lot.

The car rental company’s website will simply give you the price for the nearest location.  You need to manually check the prices at each location in order to find the best price.  I have saved hundreds of dollars by doing this.

Pay Less. Road Trip Longer.

You don’t have to make your rental car shopping any more complicated than it has to be.  Once you eliminate paying for redundant insurance and you find the cheapest pick-up location, there isn’t anything else you can do that will have a big impact on price.

The biggest drag is calling your existing insurance sources and verifying your coverage.  Yes, you’ll spend 30 minutes on the phone.  It’s not fun, but it’s not too bad either.

Again, stick to the nation-wide chains for the convenience of being able switch cars if needed during the trip.  Rates between the large companies are almost identical.  Price shopping won’t be worth the time it takes.  As a general rule, the chain with the most pickup locations in your city will be the best option.

Most important, GO TAKE A ROAD TRIP.  Do it while YOU ARE STILL YOUNG!  You will never forget it.

Additional Resources:

Nerd Wallet has an excellent write up on auto insurance if you want to dive deeper into the subject.


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