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Costs to consider when hiring a car

Carlton Boyce / 04 October 2019

When it comes to hiring a car, there are more than a few ‘optional extras’ that aren’t, and some ‘must have’ features that you really don’t need.

A model car next to piles of cash to represent how much hiring a car costs

Researching the recent article on how much it costs to hire a car was a bit of an eye-opener. I hire a lot of cars, mainly to get from one airport to another; I am, after all, a motoring journalist and it’s often quicker and easier to drive from one location to another than it is to fly.

So I thought I was pretty clued up on the cost of hiring a car, and assumed that the main players would all be within a few pounds of each other – boy was I wrong!

It also became apparent that there are more than a few ‘optional extras’ that aren’t, and some ‘must have’ features that you really don’t need - and even one or two that left me baffled as to who on earth would be daft enough to pay for them.

So, here’s my guide to the costs you need to consider when hiring a hire car – and the ones you really don’t.

The daily rate of car hire

When you are calculating how much a hire car will cost you per day, you need to make sure you are comparing apples with apples. This might sound obvious, but it is anything but simple as the rental car firms seem intent on forcing you to compare apples with sausage rolls, all the while insisting that they’re only doing it to help you…

So, your daily rate calculation needs to include not only the cost of the vehicle but also any compulsory taxes, any excess mileage costs if you are going to exceed the daily limit, and the charge for a fully comprehensive insurance policy with no (or a very low) excess.

Sounds like a bit of a faff, doesn’t it? But I’ve been taking a look at some price comparison websites that claim to be able to save you money by directing you to some second-tier companies that offer cheap rates, and they often don’t live up to their promise.

The problem is most of them have a fairly low limit on the number of miles you can drive in a day, and almost all feature a very high excess in the event you need to make a claim on their car insurance policy.

I did some back-of-an-envelope calculations and discovered that in general you will only save a couple of pounds by using them instead of going to a well-known brand, and I’m not sure I’d want to wade in that pool for such a paltry saving…

My advice: stick with a name you know and trust. It might cost you a little bit more in the first place but it will be worth every single penny if you have an accident.

7 tips to get the best deal on car hire

Collision damage waiver

As I pointed out in a previous article, Collision Damage Waiver, or CDW, insurance is probably the most profitable element of any car hire agreement – and buying it through the car hire company could cost you £25 or more per day.

On the other hand, a third-party annual policy that covers you worldwide can be hand for well under £100, with a Europe-only policy costing around half that. That’s the same cost as buying two days-worth of CDW insurance from a car hire firm.

My advice: if you hire a car for more than three or four days a year then an annual CDW policy can save you a fortune.

Child seats and sat-nav systems

There is absolutely no need to pay extortionate sums to hire a satellite navigation system or a child safety seat. After all, most, if not all, airlines will fly your child seat with you at no cost, and even if they don’t, it is usually cheaper to buy one when you arrive and donate it to charity when you leave than pay the £13 a day most companies will charge you to hire one.

The same goes for satellite navigation systems. If you’ve got a smartphone just buy a cheap windscreen mount and charging lead for it, download ‘Waze’, and enjoy the very best satellite guidance on the planet for next-to-nothing.

My advice: bring your own child safety seat and/or sat-nav.

Roadside breakdown cover

One of the major car hire companies (I’m not going to name them because they are far from alone in doing this) will charge you just under £7 a day for breakdown cover.

This is extortionate when you consider that you can buy a year’s worth of cover from just £39.99 from Saga.

Better still, many home and car insurance policies and bank accounts offer cheap or free cover as part of your package.

My advice: check to see if you already have breakdown cover with another policy. If you don’t it will be cheaper to buy your own annual policy unless you are only going to be hiring and driving the car for a couple of days a year. Just be sure to buy one that covers the driver rather than the car.

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Carbon offset

Look, it’s not for me but if you want to pay a small fee to offset your carbon footprint then that’s fine; it’s fairly cheap, and it’ll be worth every penny if it lets you sleep a little easier at night.

Alternatively, have you considered donating directly to a charity that will act on your behalf? Or, renting a smaller car, or even an electric vehicle, and helping in a more direct way? Or even taking the train and then hiring a bike when you get there.

My advice: while paying to offset your carbon footprint is easy, and has the benefit of virtue signalling to boot, there are more practical ways of helping the environment.

Travel partners

No, not a scheme whereby you hire your very own personal travel partner; I’m talking about an initiative from Avis that offers a concierge service for £62.93 a week if you hire a Ford Fiesta from its London Heathrow office.

It says, and I quote: “Help is never more than a phone call away with our exclusive concierge service. From destination and local points-of-interest information through to support with lost personal items and medical assistance, you can contact our multilingual team 24/7.“

My advice: You could use Google to find out what’s worth seeing and what isn’t. Or Trip Advisor. Or ask the concierge in your hotel, who will give you some great advice for free. (And, if you’re being kind, you’ll only need to slip ‘em a tenner when they’ve been especially helpful.)

And medical assistance is readily available via the country’s emergency telephone number, you know, the very same number that almost every telephone carrier texts you when you turn on your phone after landing.

Downsizing – and upsizing

If you’re are hiring a car to go to the airport, then the smallest one that is consistent with the number of passengers and their luggage will do fine. I always opt for the smallest car on the fleet because I’m single and travel alone. It is always fine, sits happily at 70mph, and sips fuel like a spinster sips sherry at her local whist drive. No, it’s not very civilised - and it’s almost always as boring as hell - but it’s cheap and gets the job done.

But, if you’re planning on driving up to Scotland and exploring the Highlands then a lofty SUV with four-wheel-drive might be a better option. It’ll be safer, quieter, more comfortable, and give you a better view of the scenery and the wildlife when you get there. You’ll be able to explore the odd muddy track too, and while it will cost you more to hire and run than a smaller vehicle, the difference might not be as much as you think.

My advice: While many of us have a default size of car we always hire, it is better to rent the most size-appropriate car for your needs. Sometimes you’ll pay less and sometimes more, but it means you’ll always have the perfect car for the job.

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One-way car hire

While a lot of car rental firms won’t charge you extra for one-way hire (where you drop the car off at a different location to the place you collected it from), some will, especially if the two points are a long way apart.

My advice: double-check the cost of renting a hire vehicle for a one-way journey, and see if anyone will do it for you at the standard, basic rate.

Loyalty within a relationship is good, but promiscuity is the name of the game when you are dealing with banks, utility companies, credit card providers - and car hire firms.

Location of car hire outlets

I know that I’ve just said that promiscuity is the name of the game when you are hiring cars, but I have to admit that I tend to stick with one firm for all my needs because they’re fairly cheap, have a decent range of cars, offer a good loyalty programme, and have great customer service.

But, there are times when its nearest office is just too far away for me to use them. Sure, I could take the bus, train or a taxi to collect or drop-off my car but that adds to the cost and adds a layer of irritation and inconvenience that I don’t want to have to deal with.

My advice: check that your favoured company actually has an office – and the model of car you need – near enough to make it viable.

Car hire fuel costs

It is a truism that a big car uses more fuel than a small one. However, if you can fit five, or even seven, people into one big car and split the fuel cost between the occupants, a big car might be cheaper to hire and run than two small ones.

Some companies offer minibuses that seat up to 12 people too, and while it might look like the circus is in town when you disembark, who’ll be laughing when you tot up how little you’ve spent on fuel at the end of the trip?

My advice: one large car or minibus might be the cheapest option if there are a lot of you – and an electric vehicle might be the cheapest option of all; many will seat five people and their luggage, and some now have a range of over 250 miles too, which means that range anxiety needn’t be an issue. Free charging is often available, too.

Cross-border paperwork

Finally, if you need to cross borders, even if that’s only into Europe, then you need to make sure that the car rental company will a) let you do this, b) will provide the appropriate level of insurance cover, and c) not charge you a fortune for the privilege.

You’ll need a Vehicle on Hire certificate, or a VE103, to prove that you have permission to use the car. Not a lot of people know that.

My advice: do your homework in plenty of time if you need to take a hire car abroad.


The opinions expressed are those of the author and are not held by Saga unless specifically stated. The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.