How Much Does It Cost to Rent a Car?

Life throws obstacles in the way and you may find yourself needing to rent a car. The cost of a rental car can vary drastically depending on the type of vehicle and the rental company’s location. This price fluctuation is a result of supply and demand. In areas where it is more likely you will need a rental car, the prices are likely much higher than those where it's more uncommon.

Zippia estimates that there are 1.8 million rental cars currently in service across the US, which produced a record average revenue per unit, per month (RPU) of $1,320. So it’s unsurprising that the US car rental industry achieved steady revenues of $28.1 billion in 2021, according to Auto Rental News data.

• Type of vehicle – The price of a rental will fluctuate based on what you need. More space, luxury rides, and SUVs are going to be a lot more expensive than a small everyday car.

• Location – Expect to pay a pretty penny if your car rental provider is based at an airport. Head into the city for a cheaper deal.

• Driver’s age – The younger the driver, the higher the price. It may seem unfair, but a more experienced driver will always get a better price.

Your rental cost is impacted by a number of factors, both under your control and outside of it. Below are some of the factors likely to influence any price estimates:

1. Which car type do you need?

Before renting a vehicle, you need to work out how much space you need, how many passengers will travel, and if you need space for luggage. The bigger or more premium the vehicle, the more costly the daily rate will be.

• Economy vehicles – An economy car is usually the cheapest vehicle offered by a rental company. It’s likely to fit just 2 passengers and maybe a small suitcase – ideal for an individual or couple traveling light.

• Compact vehicles – If you are traveling with suitcases and bags, then a compact car might be the best fit for you. They typically have more trunk capacity than an economy vehicle and usually allow for up to 4 people.

• Standard vehicles – The most popular vehicle type. They are usually similar to everyday car models. You can fit up to 5 passengers as well as some luggage in the trunk. These are ideal for small families.

• Luxury – The most premium driving experience falls under the luxury category, which often includes SUVs and top brands like Audi, BMW, and Porsche. Prices are likely to be quite steep, but if you’re going all out on a trip, this might be the option for you.

Prices will be much higher if you need additional boot space or a car for a family. It's always worth checking with the rental company for any deals they might have due to cancellations or less popular vehicles. For example, an economy car has an estimated capacity of two adults and two bags, with the cheapest available day rate coming in at $14 per day.

If you need more space, you can get a standard car, which seats five adults and three bags, and costs roughly $23 a day. These are usually your average sedan or larger hatchback vehicles.

For those who like to travel in style, you can opt for a premium vehicle, which includes SUVs with a much bigger trunk capacity – think of the Toyota RAV4 for comparison. Those are likely to set you back around $26 a day.

2. What is the rental car's location?

If you’re happy to shop around a little, you might be able to secure a way better price on your rental car. A lot of people will look for a vehicle as soon as they exit the airport, and this can be a bit of a trap.

You can also expect to pay more in popular tourist areas, on certain holidays and during summer. For example, the average rental car cost per day in the State of New York can be in the range of $68 to $111 depending on the vehicle type.

Miami and Orlando boast some of the cheapest per-day rental car costs, with the average being $49 per day. These costs can vary significantly based on the season, vehicle type, and whether they are in any tourist hotspots.

3. What's the driver's age? 

The younger the driver, the higher the cost. Rental car and insurance providers place a higher risk factor on young drivers as they have less experience on the road.

Young drivers are likely to face additional fees that could be as much as $40 to $65 per day, depending on the area. If you are a young group who needs a rental car, it is wise to have the oldest apply for the rental car.

Nevertheless, not all rental agencies impose these charges. When deciding where to rent from, take into account both the daily cost and any additional expenses.

Although the cost of a rental car depends on different factors, there are a few things you can do to leave with more money in your pocket. Here are some top tips:

• Shop around – There are tons of useful comparison sites available like Kayak or Expedia – these can be used to find the best price.

• Don’t book direct – As mentioned above, comparison sites will show you the best deals around and also have their prices listed. Booking directly with the rental car provider is likely to cost much more.

• Check reviews – Just because a company offers the best price, it doesn’t mean you should use them. Check the reviews online and see if they have a history of trying to rip people off.

• Check the car – Make sure the vehicle you choose doesn’t have any scratches or dents before leaving the lot. If it does and you don’t flag it, they may try and charge you.

• Top up the fuel – Always refill the tank before returning a rental car to avoid refueling charges.

• Plan in advance – If you know the dates you’ll need a rental car well in advance, then you should book as soon as possible to secure a good deal.

• Ignore any add-ons – To make an extra few dollars here or there, rental car companies try and ship you a load of additional features like GPS or phone support. To get the best price, skip these and use your phone for navigation.

• Get insurance – The chances of getting into an accident are relatively slim, but not impossible. If you don’t have insurance, you could be left with a hefty bill, so it’s always worth airing on the side of caution.

Fees can vary from dealer to dealer, but they can often drive the cost up. Below is a brief list of hidden fees that your rental car provider might try and add:

1. Insurance – This is down to personal preference, it might save you a lot in the long run, but it’s up to you.

2. Upgrades – Again, it's up to you whether you want features like GPS or AirPlay support, but these will increase the daily rate.

3. Damages – You will be charged for any damage you caused, of course. But make sure the car is spotless before you drive it away, in case they try and pin a dent on you.

4. Late return – A car rental day works on a 24-hour turnaround – so from the exact time you pick up the car, once 24 hours pass, that is classed as a day. Make sure when returning the vehicle you don’t go over the allotted time to avoid being charged extras.

5. Admin fees – Some rental car companies will charge for admin time should they have to process late returns or damage reports.

As frustrating as it can be, there may be times when your car is being repaired, or something arises unexpectedly that leaves you careless. This is quite common if you own an older vehicle, or you are leasing an older car.

If you want to avoid those tricky moments, then consider trying a car subscription service like FINN. A subscription model has lots of advantages that you don’t get with leasing or buying a car, like a single monthly payment, no hidden costs, and shorter contracts.

Get a new car without the hassle of aFINN car subscription. For one monthly rate, including maintenance and insurance, you can rest assured that you’ll always be able to drive.

Select your vehicle and fill out some basic details so we can run a credit check (this has no impact on your credit score.) Then, schedule your delivery and enjoy the new vehicle.

The price of a rental car varies depending on the rental company, the type of vehicle, the location, and the driver's age. Also, you'll discover that certain markets are significantly more expensive than others. 

There are, however, ways to cut prices, including comparison shopping, making early reservations, and forgoing add-ons. Be sure to read the rental agreement's fine print to prevent paying any unexpected expenses.