Renting a car in Lisbon means dealing with European driving rules, narrow medieval streets, and rental companies that operate differently than those in North America

Most car rental desks in Lisbon sit at the airport (Humberto Delgado Lisbon Airport, also called Portela) or in the city centre near Rossio Square. You will need a valid driver's license from your home country, an International Driving Permit (IDP) if your license is not in Latin characters, a credit card in your name, and proof of insurance. The rental company will hold a deposit on your card—usually €500 to €1,500 depending on the car—which releases when you return the vehicle undamaged. Daily rates vary widely: economy cars typically cost €25 to €50 per day in low season, €60 to €100 in summer. Fuel is your responsibility, and petrol stations are common but not always near motorways.

Driving in Lisbon itself is challenging if you are not used to European cities. Streets are narrow, parking is scarce and expensive (€1.50 to €3 per hour in central zones), and many areas have congestion charges or restricted access. If you only need a car for day trips outside the city, consider renting from the airport and leaving when ready rather than navigating Lisbon traffic first. Public transport—trams, buses, the metro—covers the city far more efficiently than a rental car.

Key Takeaways

  • You must carry your original driver's license, an International Driving Permit if your license uses non-Latin characters, and a credit card in your own name to rent a car in Lisbon.
  • The rental company will place a hold of €500 to €1,500 on your credit card as a security deposit, separate from the daily rental cost.
  • Petrol in Portugal costs more than in North America; fuel is not included in your rental and you pay for what you use.
  • Lisbon's city centre has narrow streets, paid parking zones, and congestion charges; renting makes sense mainly for trips outside the city, not for exploring Lisbon itself.
  • Insurance through the rental company typically costs €10 to €20 per day and covers damage; your personal auto policy may not extend to rental cars abroad.

What documents you need to bring

Your original driver's license is non-negotiable. A photocopy or digital image will not work. If your license is issued in Cyrillic, Arabic, Chinese, or any non-Latin script, you must also carry an International Driving Permit (IDP). This is a translation document issued by your home country's automobile association—in the US, the American Automobile Association (AAA); in Canada, the Canadian Automobile Association (CAA). The IDP costs roughly $20 USD or $35 CAD and takes one to two weeks to arrive by mail, or you can pick one up in person at an AAA or CAA office. Without it, a Portuguese police officer can fine you or refuse to let you drive, even if your home license is valid.

You will also need a credit card in your own name. Debit cards are not accepted for the security deposit. The rental company runs an authorization hold on the card—not a charge, but a temporary freeze of funds—to cover potential damage. This hold can take three to five business days to release after you return the car, so do not expect the money back when ready. Bring your passport or national ID card as well; rental staff will ask for it alongside your license.

Insurance and what it actually covers

The rental company will offer you insurance at the desk. This is not the same as your personal auto policy. Most rental companies in Lisbon offer two main options: Collision Damage Waiver (CDW) and Theft Protection. CDW typically costs €10 to €20 per day and covers damage to the rental car from accidents, vandalism, or weather. Theft Protection costs €5 to €10 per day and covers loss if the car is stolen. Together, they usually run €15 to €30 per day.

Before you buy rental insurance, check whether your personal auto policy or credit card already covers rental cars abroad. Many North American policies do not extend internationally, but some premium credit cards (particularly American Express and certain Visa Infinite cards) include rental car coverage in Europe. If your card covers rentals, you may not need to buy the rental company's insurance—but read the fine print, because coverage often excludes luxury or high-value vehicles, and you may still be liable for the deductible. If you are unsure, buying the rental company's CDW is the safer choice.

Fuel costs and where to refuel

Petrol in Portugal costs roughly €1.50 to €1.70 per litre as of 2024, though prices fluctuate. A litre is roughly 0.26 gallons, so that translates to approximately €5.80 to €6.50 per US gallon—significantly higher than North American prices. Most rental cars in Lisbon are small diesel or petrol hatchbacks that get 5 to 7 litres per 100 kilometres (roughly 33 to 47 miles per gallon US). Budget accordingly: a 200-kilometre round trip might cost €15 to €25 in fuel.

Petrol stations are widespread in and around Lisbon. Major chains include Galp, Repsol, and Shell. Most accept credit cards at the pump or inside the station. Motorways (called autoestradas) have service areas, but petrol there costs slightly more. If you are driving outside Lisbon into rural areas, fill up before you leave the city—stations become sparse in smaller towns. Always return the car with a full tank; if you do not, the rental company will refuel it and charge you a premium rate, often €1.50 to €2.00 per litre.

Driving rules and tolls you will encounter

Portugal drives on the right side of the road. Speed limits are 50 km/h in towns, 90 km/h on regional roads, and 120 km/h on motorways (roughly 31, 56, and 75 mph). Police conduct regular speed checks, and fines start at €60 and climb steeply for higher speeds. Seatbelts are mandatory for all passengers, and children under 12 or under 135 centimetres tall must use a child seat (the rental company can provide one for €10 to €15 per day if you request it in advance).

Motorways in Portugal use an electronic toll system called Via Verde or a manual toll booth system. If your rental car has a Via Verde transponder (a small device on the windscreen), tolls are charged automatically to the rental company's account, and you will see them itemized on your final bill. If not, you pay at a booth with cash or card. Tolls vary by distance; a 50-kilometre motorway stretch typically costs €3 to €5. Lisbon itself has a congestion charge called Zona de Trânsito Limitado in the historic centre; driving there between 7 a.m. and 9 p.m. costs €5 to €10 per entry. The rental company will inform you of tolls and congestion charges when you pick up the car, and they will appear on your final invoice.

Where to rent and what to expect at pickup

The airport has rental desks for Hertz, Avis, Budget, Europcar, and several smaller Portuguese companies. Prices are often higher at the airport because of airport fees. City centre locations (near Rossio or Marquês de Pombal) are sometimes cheaper, but you will have to navigate Lisbon traffic to reach them. Online booking sites like Rentalcars.com, Kayak, and Costco Travel (if you are a member) aggregate prices from multiple companies and sometimes offer discounts.

At pickup, the rental agent will walk you around the car and document any existing scratches, dents, or damage on a form called a damage report or condition report. Take photos or video of the car's condition yourself before you drive away—use your phone and timestamp them if possible. This protects you if the company later claims you caused damage you did not. Ask where the spare tyre, jack, and warning triangles are located; they are required by law in Portugal and you may need them. The agent will also give you the car's documents (registration, insurance certificate) and explain the fuel type (petrol or diesel) and how to open the fuel door.

Returning the car and avoiding surprise charges

Return the car on time and with a full tank of fuel. Late returns are charged at a daily rate or higher, and fuel charges are steep. Most rental companies allow a grace period of 29 minutes to one hour before charging an extra day; check your contract. When you return, the agent will inspect the car for damage, compare it to the damage report from pickup, and run a final check on the odometer and fuel gauge. If there is new damage, the company will charge your credit card for repairs. Damage claims can take weeks to process, so you may not see the charge when ready.

Keep your rental agreement and all receipts (fuel, tolls, parking) until your credit card statement arrives. If you dispute a charge, you will need proof of what you paid and what the rental company charged. If the car breaks down during your rental, call the rental company's roadside information number (printed on your agreement) when ready; do not attempt repairs yourself or take the car to an independent mechanic, as the company will not reimburse you.

Frequently Asked Questions

Do I need an International Driving Permit if my license is in English?

No. If your driver's license is issued in English (US, UK, Canada, Australia, etc.) and uses Latin characters, you do not need an IDP. Your original license is sufficient. An IDP is only required if your license uses non-Latin script.

Can I rent a car if I am under 25?

Yes, but most rental companies charge a young driver surcharge of €10 to €25 per day for drivers under 25. Some companies have a minimum age of 21; others require 23 or 25. Check the rental company's policy when you book, as it varies.

What happens if I get a speeding ticket or parking fine while renting?

The rental company will receive the fine from Portuguese authorities and charge your credit card. You will not know about it until weeks later when the invoice arrives. If you believe the fine was issued in error, you can contest it through the rental company, but the process is slow. Pay attention to speed limits and parking signs to avoid this.

Is it cheaper to rent at the airport or in the city centre?

City centre rentals are often €5 to €15 per day cheaper because they do not include airport fees. However, you must navigate Lisbon traffic to reach the rental location and return it. If you are arriving by plane, airport pickup is more convenient even if it costs slightly more.

What should I do if the rental car breaks down?

Call the rental company's roadside information number when ready—it is on your rental agreement. Do not attempt repairs or take the car to a mechanic on your own. The company will arrange a replacement vehicle or tow service at no cost to you.