6 Ways to Save Money on Car Rentals During the Holidays

Young man packing backpacks from a car trunk at an airport.

Holiday expenses go beyond gift-giving. If you've got plans to hit the road this holiday season, your travel costs could put a significant dent in your budget. While rental car costs don't usually top the list of most expensive travel expenses, this year may be different: The average car rental price is up 78% in 2021 to about $80 per day on average, according to travel site Hopper.

With car rental rates at record highs, it's important to find ways to save. Here are six tips that may help you score a lower rate.

1. Book Early

Rental car prices aren't set in stone. They tend to bounce up and down, with prices generally inching upward the closer you get to a travel season, such as the holidays. When demand is high, prices tend to increase in kind. According to travel site Kayak, the best time to book a car rental for a peak season is six to 12 months prior to your travel date. If you're already well past that window, booking sooner rather than later can still help you pin down a good rate before it increases any further.

2. Pay With a Credit Card

Rewards credit cards can unlock a variety of different perks. Depending on the card, you might have access to car rental insurance. Most credit cards that offer this benefit provide secondary car rental insurance, which kicks in after you use any other insurance you have. A few cards offer primary insurance, which allows you to file a claim with the credit card company first—as long as you used the card to pay for your rental.

In either case, the coverage can shave some money off your rental car bill because you can forgo buying coverage from the car rental company. If the rental vehicle does incur damages, you'll likely have to cover the cost upfront, then file a claim with the credit card company to get reimbursed.

Insurance aside, you can also use cash back rewards to help cover your out-of-pocket car rental costs.

3. Check for Discounts

There may be savings hiding right under your nose—if you know where to look. Lots of car rental companies provide various discounts. For example, you can save 30% on your first car rental with Avis simply by signing up for their email newsletter. Meanwhile, Hertz offers up to 20% off to travelers who are age 50 and older. You might also be able to find discounts for students and military service members. Groupon is another source of rental car coupons and promos.

4. Pay for Gas as You Go

Most car rental companies will offer to refuel the vehicle for you after you return it. Alternatively, you may have the option to prepay ahead of time to avoid stopping for gas during your trip. The problem is that you likely won't be reimbursed for any unused fuel you leave in the tank.

On the other hand, you can expect to pay a refueling fee if you return a car with an empty gas tank. Prices vary here. Budget, for example, usually charges $15.99 if you bring the car back without a full tank and drive less than 75 miles. Refueling yourself is one way to save money on your rental car this holiday season.

5. Map Out Tolls Ahead of Time

While standing at the checkout desk for your car rental, the sales associate may try to upsell you with a toll-payment package. Instead of paying for tolls as you go, you can opt in to one of these programs and zip through the toll lines. While convenient, the service isn't free. Hertz charges a $5.95 convenience fee for every day you incur a toll. One workaround is to research your tolls ahead of time, then bring exact change for the ride if paying in cash is an option.

6. Shop Around

Before booking your car, do some digging to see who's offering the best deal. Travel aggregator sites like Kayak and Orbitz allow you to filter your search based on your specific needs and travel dates, making it easier to compare providers. You can then see how these prices measure up to what car rental companies are charging directly. In some instances, you might snag a lower price.

Searching for alternative drop-off and pickup locations may also be cheaper than renting a car at the airport. At the time of this writing, an economy car at John F. Kennedy International Airport cost about $152 per day—but the daily rate for picking up a comparable car a short distance away in Manhattan was about $14 cheaper.

The Bottom Line

Holiday travel can add up quickly, but saving money on your car rental can help bring down your total spend. Consider it just another way of upping your financial wellness. The same can be said for maintaining strong credit. Free credit monitoring with Experian does the heavy lifting for you, making it easy to stay on top of your credit report and score.