Why do rental car company rates vary so much?

Car rental companies.  Seems every time you pick up the phone you get a different price quoted. Sometimes you can get a cheaper rate online and other times you can get a cheaper rate over the phone. What is up and what are the things you may want to know…

Smallest car is cheapest to rent – This myth has been circulating for years. Rates are based on availability,demand/volume rented. Ask “What is the best rate you can give me?” instead.  

Going green? – Rental car companies will charge you a lot more to rent a hybrid vehicle compared to many other types of vehicles. The higher rate may pay off if you are planning to do a lot of driving or you consider it an environmentally conscience thing to do.

SUV’s – Have fallen out of favor lately.  Many times you can rent a mid size SUV for the same price as a compact car and for a lot less compared to medium to full size cars.  

Where you live – Some car rental companies charge higher rates if you are a foreign visitor compared to a citizen of that country, other rental car companies do not charge you extra.  Shop around for the best rates.

Last Minute specials – Most car rental companies offer last minute specials on their websites.  If you have made a regular reservation earlier and then you find a last minute special that turns out to be a better deal, you can always book the last minute special and cancel your original booking. 

Special discount rates – Repeat customer, AAA, CAA, government, travel industry, etc. These rates may not necessarily be the cheapest rates in comparison to the “best/lowest rate” options on the company website.  

Insurance coverage – Your insurance company at home or credit card may offer you rental car insurance coverage for a much lower rate or free in comparison to what the car rental company will charge you.

Season/time of the year – Like hotels you will pay a premium to rent a car during peak traveling seasons like Easter, Christmas, spring break, summer break and long weekends.

Other websites – Websites like priceline, hotwire and rentalcars.com may offer you some better rates too.


Allow yourself time to shop around for rental car rates before you arrive at your destination.  Check several different companies as rates can vary quite dramatically. 


11 Comments (+add yours?)

  1. coconews
    Oct 29, 2008 @ 14:38:55

    Once again, I have been busy personally and professionally. I will try to post new threads as time permits.

  2. coconews
    Oct 29, 2008 @ 14:49:52

    Online I discovered Avis charges a higher rate for Canadian customers who rent vehicles in the U.S., but Alamo charges the same rental rates for both U.S. and Canadian customers that rent in the U.S.

    Wonder why that is?

    Gouging tourist rate? lol.

    Have a car rental rate story? Please post it here.

  3. Trackback: The Car insurance blog » Blog Archive » Why do rental car company rates vary so much? « Things you may …
  4. M-
    Oct 29, 2008 @ 17:17:41

    Note a rate story, but I do know one rental car company that I’m NOT going to use again: National.

    Last November, in Toronto, really crappy customer service, no cars in the lot, 3 hour wait to get the car that I’d booked, no space in the booth (a couple dozen people crammed in there already), so I had to stand in the wind&snow outside, no staff answering questions, couldn’t promise when my rental would be available, couldn’t say where I stood in line, wouldn’t call me to let me know when the car had arrived (so I couldn’t wait in the terminal where it was warm)…

  5. coconews
    Oct 29, 2008 @ 18:00:36

    We will never use Dollar again.

    They gave us a rental car that was in a previous accident with noticeable damage. We drove directly from the airport to the hotel and the next morning we noticed one tire was practically flat, we filled it with air but it was not holding the pressure very well. We immediately drove the car back to the airport, explained the tire problems, that they must of not fixed the tire properly from the previous accident and they gave us another car with no problems.

    When we returned the second rental car, Dollar tried to charge us $200.00 for a new tire on the first rental car. There was no way we were going to pay this since the tire problem was not caused by us.

    We never rent vehicles that have bad damage on them or have been in a fresh accident. Lesson learned.

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  7. Joe
    Oct 30, 2008 @ 07:22:59

    It is the goal of every rental car company to sell you all the extras period, that is how they make their money and how your rental rate can double up quickly.

    Ever rent a car without 20 questions? Want an upgrade? Insurance? Roadside assistance? blah, blah, blah.

  8. Joe
    Oct 30, 2008 @ 07:31:28

    Some employees really work you over when you say NO to all the extras too. Must be on commission.

  9. wellsmone
    Nov 02, 2008 @ 11:03:43

    Interesting Read! Very detailed blog
    Thanks for sharing

  10. js
    Jan 15, 2009 @ 18:20:46

    rental cars grr!

    some tips that work for me:
    go to booking buddy.com and look at all the rates from all the companies in one place. choose the lowest acceptable and go to that rental car companies site to see if you can get a better price. call them via 800 # if you want to deal that way. objective get the best rate.

    also check your credit card sites: american express often offers 10% off at thrifty.

    start looking early before your trip, and reserve the lowest acceptable priced vehicle. keep checking, if you find something better later, reserve it. there is no penalty for canceling.

    after checking quality (below) always keep at least one low cost reservation in force. price may go down, if so you can re-do reservation. often the rates go up as you get closer to date — so be an early worm.

    checkout the quality of the local rental car operation:
    more than the national company, the quality of the local franchise is most important. find out the local telephone number of the local franchise where you will be renting. go to better business bur. and get their assessment. find them at

    enter the phone number and you have the scoop. don’t be too picky, even good franchises have unhappy customers.

    sometimes even bad companies have good local franchises and vice versa.

    the above strategy can save you $100s of dollars, and a lot of buyer remorse and travel misery.

    one other approach — if your budget can afford it. join one of the top line agencies, e.g. hertz, get their frequent renter card, and also affiliate with an outfit that favors them — e.g. AAA works with hertz exclusively. you will get deluxe service and a sympathetic ear if you have a problem. but you will pay for it — in many cases twice as much as lower priced/ok quality provider.

    bottom line key advice:
    always check out the local franchise via better business bur. — you only need the local phone number.

    btw – bbb also works for hotels

    miscellaneous tip –
    if you are renting in a city that has had a big event, find out who the official rental car is for the event. they often have a lot of extra cars and they will cut prices to get them on the road. sometimes they will cut prices for one-way as well. e.g denver after democratic convention (enterprise), west palm after pga (national) etc.

  11. js
    Jan 15, 2009 @ 18:30:38

    one last tip —-look for a reliable off airport car rental.

    on airport rentals are so expensive because local gov. has larded them up with high taxes and fees — not for the airport but to build some new stadium etc. the local car renters don’t pay these fees by getting a car off – airport. often the off airport renter will pick you up at the airport after you call them. some new car dealers have off-airport rental operations. it is hit and miss. try googling, “off airport car rental, city, state” also check them out at bbb.

    most off airport car rental ops have limited hours – inquire.

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