How Does a Car Rental Work?

by Brandon M. Dennis

Renting a car is a convenient option for anyone who needs a temporary vehicle for a vacation, special event, business outing or during a period when you’re in between cars. Although the process of renting a car might vary from one location or company to the next, a few standard rules apply.


Renting a car is usually as easy as contacting a rental car company and answering a few questions about your needs and your budget. The first factor the company is going to consider is when you need the car, and for how long. It will then research what it has available during that time period. Based on your budget, you’ll then be able to select which car you’d like. The rental company will do a quick background check of your driving history and the type of insurance you have.

If you don’t already have an insurance policy that protects you while driving a rental car, or if your driving history puts you in a position where the rental agency thinks you’re a high risk, you might be required to purchase rental insurance or make a down payment. Most rental agencies will let you do all of this online, which means you can just pick up the car on the day you need it. You can usually return your rental vehicle at any franchise of the same company, which means you can drop it off at your arrival destination if that is more convenient for you.

When you go to pick up your car, be ready to show proof of address, your driver's license, insurance policy, a valid telephone number and/or email address, and a valid credit or debit card. Most rental agencies will not accept cash as a form of payment because they use your credit or debit card as a means to bill you for any liabilities you face in the event that you damage the vehicle.


If one rental agency doesn’t have a car that you like, don’t hesitate to shop around at other dealerships. There are usually at least half a dozen rental companies in most cities.


While rental car prices can vary dramatically based on location, company, and the type of vehicle you choose, you can usually expect to pay at least $30 per day for a mid-sized sedan, while an SUV might cost twice that. Taxes vary from one location to the next. Expect the rental agency to offer you an insurance policy known as a “collision damage waiver” that will shift the blame of an accident from you to the rental agency. This can cost around $20 per day. You’ll also likely be charged a fee if you forget to return the vehicle with a full tank of gas, have another driver on file, or even for returning the car early.

Also, be sure to check your rental agreement to see how many miles you are allowed to travel in your rental car without facing an additional fee. If you go over your mileage restrictions, you may be forced to pay for a higher mileage limit or you may even be charged for each additional mileage you use. You could also be charged for going out of state, so be sure to check with your rental agency before leaving town.


Always try to avoid renting a car at an airport rental agency, as they often charge between two and three times as much as non-airport rental agencies.

You should also expect hefty fines if you return a rental car with damages to the interior, such as cigarette burns or stains, or to the exterior, such as dents or discolorations. discusses many concerns consumers have about rental car agreements, including cleaning fees and repair costs for major damages.

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