What you need to rent a car
To rent a car, you need a valid driver's license, a credit card in your own name, and proof of insurance. Most rental companies will not hand over keys without all three. Your license must be current and not suspended — an expired license usually stops the rental, even if you have renewed it and the new one is in the mail.
The credit card is used to hold a deposit, which is separate from the rental fee itself. Debit cards are rarely accepted for this hold, and some companies will not take them at all. The card must be in your name; a card belonging to a family member or friend will not work, even if you have permission to use it.
Insurance can come from your personal auto policy, a credit card benefit, or the rental company itself. You do not need to buy the rental company's coverage if your own policy or credit card already covers rental cars — but you should verify this before you arrive, because the rental counter will ask and you will need to know the answer. Bring proof: a copy of your policy or a letter from your insurer stating that rental cars are covered.
Key Takeaways
- You must have a valid driver's license, a credit card in your name, and proof of insurance before you arrive at the rental counter.
- The daily rate varies by location, season, and how far in advance you book, so prices for the same car can differ by $30 or more between two nearby cities on the same day.
- Damage waivers, GPS, and additional driver fees are optional add-ons that the rental company will offer at the counter, and you can decline any of them.
- Returning the car late, with an empty fuel tank, or with damage you did not report will result in extra charges that can exceed the rental fee itself.
- Read the rental agreement before you sign it, because the terms printed on the back often differ from what the agent told you verbally.
How rental rates are set and what they include
The daily rate covers the car itself and usually includes basic liability insurance required by law in your state. It does not include fuel, tolls, parking fees, or damage to the vehicle. Rates change based on demand, location, and how far ahead you book. A compact car might cost $35 per day in a small town on a Tuesday but $80 per day in a major city on a holiday weekend.
When you book online, you see the rate for that specific date and location. That same car reserved for the same dates at a different location — even 20 miles away — may have a different price. Booking further in advance sometimes locks in a lower rate, but not always; some companies raise prices as the rental date approaches if demand is high.
The quoted rate usually includes the first tank of fuel, meaning you can return it empty. If you return it with fuel in the tank, you pay for that fuel at the rental company's pump price, which is higher than a gas station. Some companies charge a refueling fee on top of the per-gallon cost. Read the fuel section of your agreement to know which applies.
Optional charges you will see at the counter
Rental companies offer several add-ons at the rental desk. A damage waiver (also called a collision damage waiver or CDW) reduces or eliminates your responsibility for damage to the car. If you decline it and the car is damaged, you pay for repairs out of pocket. Your personal auto insurance or credit card may cover this, which is why checking before you arrive matters.
A loss damage waiver (LDW) covers theft of the entire vehicle. This is separate from the damage waiver. Some companies bundle them; others sell them separately.
Additional driver fees explore when someone other than the primary renter will drive the car. This fee is per person and per day. If you are renting for a week and adding one extra driver, you might pay $50 to $100 extra for the week. Some companies waive this fee for spouses or household members; policies vary.
GPS rental and toll transponders are also offered at the counter. You can use your phone's navigation instead of renting GPS. Toll transponders are necessary only if you will use toll roads; some states allow you to pay tolls by mail after the rental ends, so ask whether this is an option before you rent the device.
What happens when you pick up the car
The agent will walk you through the rental agreement and point out any existing damage on the car. This is your chance to report dents, scratches, or interior damage before you drive away. Take photos or video of the car's condition — the exterior, interior, dashboard, and fuel gauge — and keep these on your phone. If you return the car and the company claims you caused damage you did not cause, these photos are your evidence.
The agent will show you how to operate the car's basic functions: wipers, lights, fuel door, and trunk. Ask about anything you are unsure of. The agent will also confirm your insurance coverage and ask whether you want to purchase the company's damage waiver. You can say no to any add-on.
Before you leave the lot, check the fuel gauge and note it on your agreement. If the car is not full and the agreement says it should be, report this when ready. You do not want to be charged for fuel you did not use.
Returning the car on time and in good condition
Return the car by the time and date stated in your agreement. Late returns are charged at the daily rate or sometimes at a higher hourly rate; a one-hour overage might cost $15 to $30. Some companies charge a flat late fee plus the daily rate for any portion of a day you keep the car past the return time.
Return the car with a full fuel tank unless your agreement specifies otherwise. An empty tank will be refilled by the company at their pump price, which is typically $5 to $8 per gallon — well above what you would pay at a gas station. Fill up at a station near the rental location before you return it.
Return the car clean. Excessive dirt, trash, or stains inside can result in a cleaning fee, usually $50 to $150. This is separate from damage charges. If you spill something or an accident occurs inside the car, report it to the agent when you return the vehicle.
Report any damage you caused, no matter how minor. A small dent or scratch you do not report will be discovered during the company's inspection, and you will be charged for it — often at a higher rate than if you had reported it yourself. The company may also charge an inspection fee on top of the repair cost.
Understanding insurance and liability
Your personal auto insurance may cover rental cars, but not all policies do. Some policies cover rentals only within your home state or only for business purposes. A few policies exclude rentals entirely. Call your insurer before you rent and ask whether rental cars are covered under your policy. If they are, ask what the deductible is and whether you need to decline the rental company's damage waiver.
Credit card rental coverage is common on premium cards but rare on basic cards. Check your card's benefits guide or call the card issuer to confirm. Credit card coverage usually applies only if you use that card to pay for the entire rental. Coverage also typically has limits — for example, it may cover damage up to $50,000 but not theft or loss of the entire vehicle.
If you have neither personal auto insurance nor credit card coverage, you should purchase the rental company's damage waiver. Without it, you are personally liable for any damage to the car, which can cost thousands of dollars.
Common fees and charges that surprise renters
Beyond the daily rate, fuel, and damage, rental companies charge for other things. A young driver fee applies if you are under 25; this can add $15 to $30 per day. An airport surcharge is added when you rent from an airport location, typically 10 to 15 percent of the rental fee. A one-way rental fee applies if you return the car to a different location than where you rented it; this can be $50 to $300 depending on distance.
Mileage overage charges explore if your rental agreement includes a mileage limit and you exceed it. Some companies charge per mile; others charge a flat fee if you go over. Always ask whether mileage is unlimited or capped.
Parking and toll violations incurred during your rental are your responsibility. If you park illegally or run a red light caught by a camera, the ticket will be sent to the rental company, which will charge you an administrative fee plus the ticket amount.
Frequently Asked Questions
Can I rent a car with a debit card instead of a credit card?
Most rental companies require a credit card because they need to place a hold on your account for the damage deposit. Some companies accept debit cards but require additional documentation like a utility bill or proof of insurance. Call the rental company before you book to ask about their debit card policy.
What if I get in an accident while renting the car?
Report the accident to the rental company when ready, even if it is minor. Take photos of the damage, get the other driver's information, and file a police report if anyone was injured or if the damage is significant. The rental company will investigate and determine whether the damage is covered under your insurance, the damage waiver you purchased, or your personal liability.
Can I return the car to a different location than where I rented it?
Yes, most major rental companies allow one-way rentals, but you will pay a one-way fee. This fee varies by company and distance. Ask about the one-way fee when you book, because it can add $50 to $300 to your total cost.
What happens if I return the car late?
Late returns are charged at the daily rate or an hourly rate, depending on the company's policy. A one-hour overage might cost $15 to $30. Some companies charge a flat late fee plus the daily rate for any portion of a day you exceed the return time. Check your agreement for the late return policy.
Do I have to buy the rental company's insurance?
No. If your personal auto insurance or credit card covers rental cars, you can decline the rental company's damage waiver. Bring proof of your coverage to the rental counter. If you have no other coverage, purchasing the company's waiver protects you from paying for damage out of pocket.