Is It Better to Prepay for a Rental Car?

Prepaid rental cars work in a rental car company’s favor, allowing for assured profit in the face of the staggering number of no-shows they experience daily. It’s estimated that nearly a third of travelers who reserve a rental car fail to claim their reservation. Accounting for a fallout of 30% or more means most car rental companies overbook their fleets to protect their bottom line. It’s the same reason many renters show up to a rental counter with a reservation but are told no cars are available. 

Most rental car companies offer a 5% to 15% discount for advance reservations. However, travelers should note that prepaid reservations have strict cancellation policies. In addition, you’re often not entitled to a refund if you don’t cancel ahead of the time of rental and fail to claim your reservation. If you’re confident in your travel plans, prepaid rates and discounts on rental cars can be worth the associated risks, but otherwise, saving a few bucks may not outweigh the hassle. 

Prepaying for a rental vehicle locks in your rate and expedites the payment process. As you compare rates between the best car rental companies, such as Enterprise vs. Hertz, you’ll see “Pay Now” and “Pay Later” pricing. If you choose the “Pay Now” option, you’ll be charged the total rental amount at the time of reservation. Specific cancellation and refund policies often apply. 

It’s important to note that using any promotions or loyalty rewards typically cancels out the “Pay Now” option and discount. Unfortunately, most rental car companies don't allow stacking deals. However, it’s worth comparing the various policies attached to either discount to see which offers the most wiggle room should plans change. 

If you prepay for your rental car, you can often breeze through check-in. Rental car company representatives may verify your driver’s license and payment method, but the process is much smoother with prepayment. Depending on availability, the rental counter representative may also offer a complimentary upgrade if your chosen car class is unavailable. 

Opaque websites such as Travelocity, Priceline, and Expedia offer rental cars at discounted rates. However, these third-party websites often don’t reveal which car rental company or the make and model of your rental car until you’ve paid for your reservation. For some travelers, these specifics are of no consequence, but for others, individual customer service experiences matter. 

While booking a rental car through an opaque website can be tempting, especially with such starkly low rates, travelers beware. These cheap reservations often hide restrictive and inflexible cancellation and refund policies. If you have to cancel your trip entirely, you may not be eligible for a refund if you book through one of these sites. 

The option to prepay can work in your favor, depending on your circumstances and what you prioritize most when booking a rental car. Below are a few reasons why you might forego paying at the counter and pay upfront for your rental. 

You’re concerned about availability 

Rental car availability depends on the sole discretion of the car rental company. However, prepaying for your rental car can put you ahead of the line during pick-up. Your rental is technically bought and paid for, so getting you on your way is much simpler in the eyes of the rental car company. 

You’re satisfied with the quoted rental rate

Chasing after discounts can have you refreshing the rental car company’s page multiple times a minute. If you’d rather trade 20 minutes of rental car rate comparisons for anything else, locking in an affordable rate and checking that item off your to-do list can be beneficial. If you end up paying $30 more for your rental, so be it. 

You want to use a loyalty or promotional discount

Specific promotions or loyalty discounts may render “Pay Now” rates moot but require you to pay in full to claim any offers. In these cases, it’s best to pay upfront and lock in the discounted rate. The best loyalty programs allow you to earn points as you reserve rental cars, so hopefully, the trip you take contributes to another adventure down the road. 

Many savvy travelers avoid prepaying for a car rental for the same reasons they return their rental car to the same location: fees. Just like the assessed penalty for dropping a rental car off at a different location, prepaying for a rental car can put you at risk of additional fees that cancel out any discounts you took advantage of. That’s all assuming your plans go off without a hitch, which isn’t always the case. 

Sometimes, a rental car alternative can help you work around the hassles of renting a car. For example, FINN car subscriptions offer flexible terms that put you behind the wheel for six to 12 months. With that much time on your hands to properly enjoy your vehicle subscription, you don’t have to fuss over return times or find an affordable rental price. Instead, you can integrate your travels into your subscription term for a stress-free experience that enhances any adventure. 

You want to avoid cancellation fees

If you’re not confident your travel plans will happen, for any reason, prepaying for a car rental may not be the best choice. Early enough notice can help you potentially avoid cancellation fees or strict refund policies, but if something changes at the last minute, you could be stuck paying for a rental car you never even saw. 

You plan to shop for a lower rate

Prepaying for a rental car prevents you from searching for a lower rate down the road. When you prepay for your rental, you lock in the quoted rate. If you think prices will drop before picking up your rental car, avoiding the “Pay Now” car rental option works in your favor. You can cancel your reservation, lock in the new lower rate, and still pay less if the price drops further using the same procedures. 

You don’t have the funds available

Many Americans work off a budgeting system that can be tight at times. Due to budget constraints, you may avoid paying for your rental car reservation beforehand. If you won’t have the money until near the beginning of your travels, waiting to pay can prevent you from over drafting your account. If you plan on paying for your car rental with a debit card, waiting to pay at the counter may be your only solution since many rental companies require a credit card. 

Prepaying for a rental car makes sense for travelers with a set-it-and-forget-it approach but may not be the strategy of choice for those seeking better rates and flexibility. Beginning with a few minutes to consider your ultimate goal in booking a rental car can help you determine which route best suits your needs. For example, if you have a vacation in two weeks, prepaying can help you lock in a low rate that likely won’t change much over the next 14 days. However, you may benefit from price-quoting a few times a week if your trip is a month or two out. 

What if you could drive your rental car longer and not worry about rental rates, return times, and checking in at the counter? FINN car subscriptions offer travelers peace of mind and a familiar mode of transportation. You can take your FINN subscription car out on the open road and drive it home for a seamless transition to everyday life.