The 10 most common rental-car charges and how to avoid them

Under EU rules, car rental companies must be transparent about all charges and list them, so customers know what they’re paying for. Here’s how to avoid paying more than you should for car hire.

Written by

Kate Hughes

Insurance expert

Last Updated

1 JULY 2022

10 min read

No more hidden charges

Many of us have our own horror stories of being hit with an unexpected bill after returning a hire car. Following years of confusion around hidden charges for holiday car rentals, companies were told in 2019 to change their ways to fully comply with EU rules. Car rental services must now clearly list all charges. But renting a car can still be baffling, with phrases like ‘super collision damage waiver’ and ‘full-to-full’ to get your head around.

Here’s our take on the 10 most common extra charges when hiring a car and, even more importantly, how you could avoid them.

What extra charges are there for holiday hire cars?

As well as the standard rental agreement, you may be expected to pay some, or all, of the following:

Insurance charge
Upgrade charge
Damage charge
Extra day charges
Admin charges
Young or old drivers charge
Rental equipment charges
Fuel charges
Toll charges
Road tax charges

1. Insurance charges

Basic insurance that meets national or European law is included when you hire a car abroad. But this usually comes with a hefty excess that you’d have to pay if the car is damaged or stolen, no matter who is at fault.

When you go to pick up your car, you’ll probably be offered an add-on called a ‘super collision damage waiver’. It’s designed to bring the excess down but is often expensive.

How can I avoid car rental insurance charges?

If you’re travelling in the EU, bear in mind that all car rentals have basic collision damage waiver and theft protection included so you don’t have to buy the extra ‘super’ insurance upgrade if you don’t want to.

If you’d like the reassurance of extra protection, you could consider an excess reimbursement policy from a standalone insurance provider instead. You can get it online ahead of your trip and it’s usually much cheaper than cover offered by rental companies.

Rental car insurance extras are littered with jargon and can be a little confusing. Be sure to check what’s in your standard rental agreement and get the counter staff to explain it clearly, so you’re not buying something extra you don’t need. For example, personal accident insurance (PAI), which covers you and your passengers for injuries, is usually included in your travel insurance.

If you do decide to go for a ‘super’ waiver at the counter, check that the cost is for the whole trip, and not per day.

2. Upgrade charge

When you arrive at the rental desk to pick up your pre-booked car, you may be offered an upgrade to a better car. ‘Better’ could mean a bigger or more luxurious vehicle, or one with extra features. This type of charge is purely optional. If you decide to upgrade, check the total price, as some charges can be made at a daily rate.

How can I avoid an upgrade charge?

It might be tempting, but do you really need an upgrade? If the car you originally booked suits your needs, it might be better to stick to that, especially if it’s smaller and easier to park. Be aware that a bigger, fancier car may come with a higher excess and security deposit and be less fuel efficient.

3. Damage charge

When you return your rental car, the rental company will check for any damage that wasn’t there before you hired it. If they find anything, you’ll be charged for the cost of repairs. You should check your rental agreement carefully to find out how much you’ll be charged for different types of damage.

How can I avoid damage charges?

Firstly, drive responsibly, as if the car was your own, and park it in a safe place, particularly overnight.

To avoid being charged for damage that isn’t your fault, carefully examine the car before you drive away. Point out any existing damage or scuffs to the rental company and make sure they’re noted. Take pictures, if necessary, and keep all documents in case you need to dispute damage charges further down the line. If you can, ask the rental company to inspect the vehicle for any damage when you return it and confirm any actions or charges while you’re still present.

4. Charge for extra days

Your rental agreement will be for a fixed number of days, usually at a daily or weekly rate. If you’re late returning the vehicle, you’ll be charged a pre-agreed fee.

Car rentals work in 24-hour periods, so if your rental agreement begins at 11am on the day of pick-up, it needs to be returned by 11am on the agreed return day. If you bring the car back in the afternoon of the right day, you’ll likely be charged for a full extra day.

How can I avoid charges for extra days?

To avoid being caught out, read your agreement carefully, and find out the cut-off point for an extra day. If you need to drop the car off later than planned, contact the rental company and find out how much it will cost, before turning up late.

5. Admin fees

Admin or processing fees are often charged by car rental companies if they have to deal with any issues from your rental. This could include passing on speeding or parking fines, sorting out damage repairs, refuelling or cleaning the car once it’s returned, for example.

How can I avoid admin fees?

You won’t be able to avoid admin fees for traffic fines or damage, for example, if you’re responsible. But if you’ve been unfairly charged and can prove it, you could contact the car rental company and dispute the extra admin charge.

6. Charges for young or senior drivers

Younger and older drivers might face an extra charge because of their age. This is because they’re considered a higher risk. Ages can vary from one rental company to the next, but if you’re under 25 or over 65, it’s always worth checking your agreement carefully for this extra fee.

How can I avoid charges for young or senior drivers?

It’s worth shopping around with different providers. If you’re 24, for example, one provider may classify you as a young driver, but another may not. Senior driver fees are easier to avoid as many rental companies don’t charge them. Check the terms and conditions before you book. If there’s a charge, look elsewhere. You might just save yourself a few extra pounds..

Choosing a smaller car may also help keep the costs down. Bigger, more powerful cars usually come with stricter age restrictions.

7. Rental equipment charges

Most rental companies will charge you for renting extra equipment like child car seats or a sat nav.

As child car seats are legally required in most countries around the world, you’d think they’d be fitted as standard when renting a car with small children. Unfortunately, not. Even booster seats could come with an extra charge.

How can I avoid rental equipment charges?

Some airlines let you carry your child seat for free, so take your own and save yourself a fee. Just make sure you can use a UK car seat in the country you’re driving in. For example, in Canada, child car seats must have the Canadian National Safety Mark, so you’ll have no choice but to rent one there.

As for sat nav – use your smartphone. There are many navigation apps available for download on Android and iOS devices. Some are free – although watch out for data roaming charges.

Download as many maps, directions and other information as you can before you leave home to avoid hefty extras on your next phone bill, and don’t forget to check the rules in your destination country around using a mobile phone in a vehicle.

8. Fuel charges

When you rent a car, you’ll have to sign up to a fuel policy. Many rental providers have a full-to-full policy, which means they’ll hand the car over to you with a full tank of fuel, expecting you to return the car with an equally full tank at the end of your rental. If you don’t, you’ll be charged by the hire company for having to refuel it themselves. This is usually at a more expensive rate than simply filling it up yourself.

Some rental companies give you the option of returning the tank empty and they’ll refill it for you when you return the car. It might seem like less hassle, but if you don’t travel very far, you’ll end up being charged for fuel you don’t use. As well as being a waste of money, the fuel is charged at a premium rate and there’s usually an admin fee on top, too.

How do I avoid extra fuel charges?

Look for car hire firms with a fair fuel policy. This allows you to return the vehicle with the same amount of fuel in it as when you collected it. If you need to fill up the car, make sure you leave enough time to do so, especially if you’re not using a fuel station at the airport.

Above all, always make sure you’re clear on the rental company’s fuel policy before you pick up the car so you’re not surprised by any extra charges.

Top refuelling tip

If you’re picking up and returning your rental car from an airport location, try to avoid the on-site fuel stations as they tend to charge more. Do your research and use a fuel station within a few miles of the airport where you’ll typically pay less per litre.

9. Toll charges

You’ll need to pay any toll charges while you’re responsible for the car. Many toll roads have barriers and a booth, so you can pay the toll in cash or card with no problems.

As always, if you’re using a card overseas, opt to pay for any transaction in the local currency rather than sterling as the exchange rate is likely to be more competitive.

More tolls are going electronic, which means there’s no barrier, so you might drive through without realising. The vehicle will be registered when you pass through the toll and the local traffic authorities will send the fee to the rental company, which they’ll pass on to you. If this happens, you’ll end up paying both the toll charge and an admin fee from the rental company.

How can I avoid toll charges?

When you pick up the car, ask about local tolls and how they work. It’s also a good idea to have some local currency to hand so you can pay at cash booths. In some countries, like Australia where all tolls are electronic, you can buy a ‘toll pass’ online, either before you travel or within three days of travelling on the toll road. Alternatively, avoid roads with tolls altogether.

10. Tax charges

Tax charges vary from country to country, so it’s best to read your agreement carefully, and be aware of any added tax. This may be included in your rental or added as an extra.

How can I avoid tax charges?

This is one charge you just can’t avoid. Any taxes added by the state will have to be paid. All you can do is check the terms and conditions, so you know how much you’ll be expected to pay.

What if I use my own car?

If you’re taking your own car over to Europe, you’ll need to check your car insurance policy to see if you’ll have the same level of cover as you have in the UK. All UK car insurance policies have the minimum third-party cover for driving in the EU. But if you have a comprehensive policy in the UK, don’t just automatically assume you’ll have the same level of cover for driving abroad.

You’ll now only need a green card to drive in a few European countries, including Albania and Moldova. But you’ll need to display a UK sticker on the rear of your vehicle if your number plate doesn’t include the UK national identifier.

Depending on the countries you’re driving in, you might also need an International Driving Permit. Check the requirements for countries you plan to travel through or around, as some may require you to carry certain equipment, such as a breathalyser, high vis vest or hazard signs, for example, in your car.

And last but not least, whether you’re hiring a car or taking your own, make sure you have travel insurance. Standard travel insurance is unlikely to cover car rental excess so you'll need to add this to your policy.

Luckily, you can do that right here – whether you’re travelling alone, as a couple or taking the whole family.