Aug. 5, 2022

πŸš— All the Rental Car Hacks

Last month I had a great conversation for the podcast with Jonathan Weinberg (🎧 Ep66) where we talked about all the deals, tricks and tips for rental cars. So with Labor Day travel coming up, I wanted to share takeaways to help you all save money. Even if you’re not traveling for Labor Day, everything below should help you save real $$ on your next rental.

πŸ€” It's time to rethink how you plan your trips

It’s pretty normal to wait to think about booking your rental car until you’ve booked your flights and hotels, but that’s no longer always true. I've recently heard stories of people canceling trips and rearranging flights simply because there were no rental cars available. My conversation with Jonathan Weinberg (Ep 67) was packed with hacks, tricks, and money-saving lessons for rental cars and I’m excited to share them with you to help you save $$ on your next trip. After all, he has helped save renters over $100M since starting his company Autoslash 12 years ago.

πŸ€ͺ The rental car market has been crazy

Before the pandemic I remember renting a car in LA for as low as $10/day, but now current market rates are more like $80 - $200/day. During the peak craziness, some people even rented U-Hauls for $250/day, because it was the cheapest (or only) option available. 

Why? Well the extremely low demand during the pandemic basically imploded the rental car market. Companies sold many of their cars to right-size their inventory with the plan to repurchase new ones when the demand came back. Except when they started buying, they couldn't, because there was a computer chip shortage (cars need 1,000-2,000 computer chips to operate). So it’s a whole new world for rental cars.

And while rates and availability have gotten a little better, there are still entire states and countries with extreme inventory shortages. 

πŸ₯… Casting a wider net in your search process

The rental car companies are in constant price competition. They are undercutting prices against each as often as by the hour to steer business their way. All of this means an opportunity for the savvy renter. You just need to cast a wider net for your search. I live in the Bay area with three airports. If I were flying here for vacation and wanted a car, I would figure out the rates for each airport and add them to costs for flights to those airports and compare the total prices for each to find the best deal. 

  • Look at off-airport. Off-airport rentals can be cheaper, but you have to factor in the time and cost to get you there (Uber or Lyft). Also, off-airport rental car agencies are typically open 8AM - 5PM, so a late arriving flight (whether booked that way or delayed) can make it a challenge. However, you can pick-up and drop-off from separate locations, and while one-way rentals across long distances (pickup in SF, drop off in LA) can be expensive, they’re often the same price if the two locations are in the same city. Unfortunately switching between on-airport and off-airport locations usually require two different searches. Two examples for using this to your advantage:

    • If renting a car off-airport saves you a lot, you might still be able to drop it off at the airport at the same rate, so you’d only have to figure out getting between the airport and rental car location once.

    • If you’re to drive around to explore an area, but don’t need the car for your whole trip, you could pick up at the airport and drop off downtown. Our au pair recently did this and picked up her car at LAS airport for a trip to the Grand Canyon and dropped her car off at a hotel on the Strip before spending a few days in Vegas.

  • Weekly vs. daily rates (and late returns). Different rental periods can often offer significant price differences. For example, the weekly rate (≥5 days) can often be a better deal, so it might be cheaper to rent for 5 days, even if you only need 4. And fun hack: if you return the car a day early, you might get that weekly rate prorated, because you only used 4/5 days. Also keep in mind that a rental car “day” is a 24-hour period and the timer starts when you pick up the car, so if you pick up early, you’ll have an earlier drop off time before additional charges kick in. Here’s how a few of the major brands charge for late returns:

    • Grace Period: 59min (Enterprise), 29min (Avis/Hertz)

    • Additional Day Charge: Late by 2.5hrs (Enterprise), 1.5hrs (Hertz/Avis)

  • Change pickup times (day, afternoon, evening, within the hour). This one frustrates me, but for some reason, your pickup time can actually change the rate you pay. Sometimes even just booking on the half-hour instead of the hour can change things too. However, the major companies usually let you pick up anytime on your reservation day (after all flights land early and get delayed), so you could book at the lowest price and just come when you arrive. That said, discount brands might not be as flexible, so it may be worth calling and asking.

  • Prepaid rates. I try to avoid prepaying for rentals. Not just because plans can change but because with pay at the counter rates, you can easily cancel and rebook if the rates come down. However, most prepaid rentals don’t require you to forfeit the entire rental cost, there’s usually a fee to cancel depending how far in advance you do it. However, sometimes the cancellation fee is so low (e.g. $25) that prepaid might be worth the savings. However, just keep in mind that prepaying the rate doesn’t give you any more priority for guaranteeing a car for you… you’ll have the same priority as someone who chose to pay at the counter, which is usually just “first come, first serve.”

  • Prepaid fuel. Don't pay for prepaid fuel. It may seem like a better deal because it has much lower cost per gallon than what you pay if you don’t bring the car back full. However, you are likely wasting money, because you have to buy the entire tank and it’s very difficult to manage your fuel levels so you bring the car back exactly empty. The most cost-effective option is to just fill up the tank in the 10 miles before drop off.

🚘 The rental car process

There are many things to consider when renting a car, so let’s briefly discuss the process and highlight some of the important considerations. 

  • Searching for your rental. The search process is fairly intensive because variability in options is tremendous (pickup times, types of cars, and from hundreds of locations within a particular area). I used to assume that the company with the cheapest compact rate would have the cheapest full-size or SUV rate too, so I would try to simplify my results by searching for one type of car and then picking the car I wanted from that company. Well that assumption was totally wrong, so definitely make sure to search for all the types of vehicles you’d be ok renting.

  • Booking your rental. The site you book your rental on matters because different sites offer better discounts, pay-later flexibility, and provider reservation tracking functions to keep looking for a better prices. However, all those rentals are ultimately booked with the same rental car companies, so I would book wherever you find the best price (unlike my recommendations to book hotels/flights directly with the airlines).

  • Tracking your reservation. This part of the process is often overlooked, but because most rental car reservations have no fee to cancel, you can take advantage of any drops in price. You can do this manually by rerunning your search every so often, or use a site like Autoslash, which will just track your reservation daily and send you an email if rates drop and they find you a better price. The best part is that you don't need to book the original reservation with them, you can upload your reservation, and they’ll still track it for a better deal.

  • Picking up the car. Without joining a loyalty program, you usually need to go to the counter to confirm your reservation before going to the lot to pick up your vehicle). I’ve seen lines with dozens of people in them, which is why I think the best loyalty program benefit is the ability to skip the line and go straight to the lot to get your car. These programs are free to sign up for, so there is no reason not to. Here are some tips for selecting your car:

    • Check the mileage. It's an indicator of the car's condition

    • Look at the tread on the tires. And think about the weather forecast

    • Open the door and check the amenities that fit your preferences (e.g. bluetooth, usb chargers, etc)

    • Take a picture or video of the car before driving it off the lot (for your damage protection)

  • Dropping off the car. The drop off process is mainly about protecting yourself. The most important thing is to get a receipt (whether physical or digital) before you leave. Also, take pictures or a video of the vehicle to document the condition you left it in. Any damage under a quarter size shouldn't be a concern (at least in the US), but it's safer to document. The last thing you should do is take a picture of the gas receipt, fuel level and the cars mileage in case you ever need the proof down the road. This sounds like a hassle and 99% of the time is totally unnecessary, but I promise you’ll be glad you did if you’re ever in the 1% of the times it matters.

πŸ† How do the brands stack up?

There are three major brands (Hertz, Enterprise, and Avis) that own a ton of the rental car market.

  • Hertz owns Dollar & Thrifty. 

  • Enterprise owns Alamo & National. 

  • Avis owns Budget & Payless. 

How do they stack up? (according to Jonathan and his team):

  1. National sets the standard for the best overall experience. You can choose your own car, they have better model cars, excellent service and have the best loyalty program for earning free rentals. I was really surprised to learn this and am excited to rent from National in the future and how Jonathan’s take holds up.

  2. Hertz follows closely, offering their “Ultimate Choice” program that let’s you choose your own vehicle at most airports and get on your way quickly. 

  3. Avis is next, still solidly in the top tier of rental car companies.

  4. The next tier is Enterprise, Alamo and Budget. Enterprise has great customer service, Alamo lets you choose your car, and Budget provides a fast check-in service. But none of the three are as seamless as the higher tiered brands.

  5. Dollar, Thrifty and Payless are deep discount brands. The cares are still solid, but you’ll often get the service/experience that’s expected from a discount brand.

πŸ’° You need to be using discounts

Memberships (AAA, Costco, AARP), credit cards and many employers offer valuable discounts that are essential to use for savings on rental cars. But these are not the only ones, you can also find them directly from rental car companies, local or national organizations, college alumni associations, for military personnel and for senior citizens. When I was at Google, their discount with Hertz was so good that I could almost never beat it, but sorting through all the others can be a lot of work. Especially when the discounts from programs like AAA or Costco can be so big it would more than justify getting a membership just to save on one reservation. That’s why I love that Autoslash will compare discount codes from all programs across the board, even before you’re signed up for them. The process takes a few minutes, so you don't have to run multiple searches or maintain a spreadsheet of all the discount codes. 

It’s also tricky because different membership programs offer discounts with different brands (AAA works with Dollar, Thrifty, Hertz; Costco works with Alamo, Avis, Enterprise, and Budget). And not only will the discount codes save you money on booking, but they also save you on extra fees:

  • AAA will save you on fees for under-25 renters at Hertz

  • AAA rates include a free car seat and provide road-side assistance

  • AAA and Costco rates offer a free extra driver

  • Most major rental car companies will let spouses drive for a fee (note: that if the lines are long and the loyalty program let’s you skip the line, you can usually add an extra driver at the check out window)

πŸ›‘ Use caution with employer discounts

Using a discount code from a previous employer or even a company you’ve never worked at may be tempting, but I'd be careful. Many rental car companies are cracking down because the company rates are so much cheaper. Some people have even been put on a 'do not rent list' for fraudulent use. And you can put yourself in a deeper hole if you get in an accident, because many times the employer has contractually agreed to cover the cost of repairs, but likely won’t cover them if they determine that the renter isn’t actually an employee. So if you’re using a corporate discount code you’re not eligible, always make sure to decline the insurance.

🀬You show up, and there is no car available for you

This happened a lot in the early wake of the pandemic, but it’s probably not something you should be too worried about. However, it’s important to know that rental car companies don't actually hold a car that matches your reservation (see video below). Because most reservations are not prepaid, many people cancel at the last minute or just don’t show up, so companies usually oversell their inventory by up to 30% to ensure they’re maximizing utilization.

However, your rental contract is binding, so if you show up and they have no cars, the company should do everything in their power to get you one. Don't accept “there is nothing I can do” because you should not pay for the inconvenience. It's an opportunity to ask for:

  • Free transportation to pick up a car at another location

  • Request they bring you a car from another location

  • Rental from a competitor (where they cover any difference in price)

  • Free points, upgrades or add-ons for the hassle

So should you book a backup reservation? Doing this will just compound the problem and impact someone else waiting for their reservation, so I’d suggest only using a backup reservation for when you absolutely need a vehicle. You can also call ahead to the company to get a sense of the inventory, especially if you're renting off-airport because they have smaller fleets.

Also, sometimes companies will also use “cheap upgrades” to mask the fact that they don't actually have the car you booked. It may look good, but challenge them before you take it, because if they don’t have a car in the class you booked, you could be in a position to get that upgrade for free. And if that forced upgrades means less fuel efficiency, I’d definitely ask for free fuel or some other discount.

❌ In most cases, it's safe to decline the insurance

The best way to avoid the rental car company's pricey insurance is to use a credit card with primary coverage combined with your personal car insurance policy (assuming it extends coverage to rental cars, which it usually does). The credit card will cover damage to the rental car, but it will not cover liability (damage to other vehicles and injuries to others), so make sure you have enough coverage and liability with your personal car insurance policy before driving off the lot. If you don't have your own car insurance policy, you should probably pay for liability coverage, but you can decline the collision coverage if you have it through a credit card. There are also frequent renters' policies for those without a personal car insurance policy.

One gray area is the relationship between credit card insurance coverage and paying with credit card points. While it’s not always explicitly defined, as long as you put some part of the transaction on a card (deposit, taxes, fees), the insurance will most likely kick in. If you booked with points and you get in an accident or want to be 100% sure the insurance will kick in, you could also intentionally extend the rental or return the car late so you’re forced to make a rental payment on your card.

πŸ’³ What are the best credit cards for rental cars?

My best cards for rental cars are the ones that offer primary coverage, which include:

  • Chase Sapphire Preferred and Reserve

  • Chase Ink Preferred, Unlimited and Cash

  • Capital One Venture X

  • United Explorer, Quest or Business

The Amex Platinum doesn’t offer primary rental car coverage without paying extra for their Premium Car Rental Protection (which costs money). However their Hertz discount code offers:

  • Complimentary one-class upgrade (when available).

  • Four-hour grace period on returns in the U.S.

  • 10% bonus points with every rental.

  • Special cardholder rates at select locations.

Reminder: If you’re interested in signing up for any of these cards (or really any other cards) you can support me and All the Hacks by signing up at allthehacks.com/cards πŸ™πŸ™πŸ™

πŸ‘‘ Free Rental Car Status

Many credit cards offer free elite status with rental car programs, so if you’re eligible you should definitely take advantage:

  • Amex Platinum: Avis Preferred Plus and National Executive

  • Visa Infinite Cards (e.g. Chase Reserve): Avis Preferred Plus, National Executive

  • CapitalOne Venture X: Hertz President's Circle (their top tier)

  • Delta: Hertz Five Star for Gold and President's Circle for Diamond/Platinum

  • United: Avid Preferred Club for Silver/Gold and President's Club for Platinum and higher

🌎 International rentals 

International policies are quite different. Make sure you check the contract, quoted rate, and add ons before you leave the desk. Also do a through look over the car for any existing damage/scratches, as even the smallest nicks can come with charges abroad. And get a receipt when you drop off the car and document the condition you returned the car in.

This is all because local companies often subcontract from the major brands (like a franchise), but they can set their own policies and terms. For example, when I was in Cabo last year the rental rates looked abnormally low, but liability insurance is mandatory, so they were all going to add on and required daily fee for that policy that would drive up the rates significantly.

🏎️ Using non-traditional rental car services

Outside of the major rental brands, there are a few alternative companies worth checking out. For example, Turo provides an AirBnb style rental option, where you are renting from owners (hosts) instead of rental car companies. Kyte aims for convenience and will drop off, pick up, and fill the tanks for you. Silvercar rents only Audi’s and comes at a premium, but usually less than a luxury car from a traditional company (and Visa Infinite cardholders save up to 30% here). The one place I consistently use Silvercar is when I need to rent an AWD/4WD car, because it’s usually cheaper than an SUV and all Silvercars are AWD. Unlike the major agencies, these companies aren’t in every city, but they’re worth comparing to traditional options if they’re in the city you’re going to.

πŸš—πŸ¨ Autoslash & Hotelslash

I have mentioned Autoslash several times in this newsletter. It's not because I was asked to or paid to, but because I think it’s the best option to save you money (unless you have a better corporate rate). In fact, even using all the discounts I have for a 7-day rental in Maui this October Autoslash beat the next best rate by ~$200. I guess I should believe their claim that they save 30% on an initial booking and another 20% during the tracking process – and the service is completely free.

They’re also developing a similar site for hotels (Hotelslash) and Jonathan set up the code “allthehacks” for you all to get free lifetime access. Note that you won’t be able to enter your hotel loyalty #s and you’re not likely going to get any free upgrades, but if you can save a ton on the booking, it might be worth using the site.