What You Should Know Before Paying For A Rental Car

When it comes to paying for rental cars, it goes without saying that having a credit card is a great privilege and advantage. Credit cards are the go-to way to pay, not only because of the flexibility in paying credit cards back, but because rental car companies will typically charge a temporary additional fee (better known as a "hold") upon renting. There are also often additional fees, including car insurance, rental protection, damage charges, processing fees, upgrade charges, and that pesky little detail of ensuring you return your car within the 24-hour window to avoid getting charged an extra day.

For those who don't have access to a credit card, you might feel like you're hindered when it comes to your payment approach for rental cars. Because of this, we did some investigating. Can debit cards be used for rental cars? Can cash be used for rental cars? What about paying for a rental car with points accumulated from a travel credit card? What hidden fees should be looked out for to best prepare for the actual cost of the rental car? Let's dig in.

Credit, debit, or cash?

The go-to way to pay for a rental car is a credit card. When customers choose to pay with a credit card, they avoid having their overall funds hindered for the duration of their travels, since credit cards offer flexible payment plans. Perks to using a credit card may also include getting travel points if you have a travel-friendly credit card such as the Chase Sapphire Reserve or the American Express Gold Platinum.

If a credit card isn't an option for you, however, using a debit card is indeed possible. Several car rental agencies will accept debit cards under different circumstances. Avis is the friendliest debit card option, and only requires credit cards on certain premium model vehicles. Budget accepts debit cards when you return your rental car, but only particular locations will accept one at time of pick up. Dollar accepts debit cards in advance. Enterprise accepts debit cards from any of their airport locations, with the additional requirement of proof of a return flight.

Paying a rental car with cash can be a little bit trickier. Budget will accept cash as payment upon returning the vehicle and Dollar accepts cash if you pre-qualify for a Cash Deposit Identification Card (the process takes about 30 days, requires a credit check, and costs $30). Avis will sometimes accept prepaid gift cards upon returning a vehicle.

Travel points and hidden fees

It can be frustrating to see your rental car being advertised as a fixed amount per day, only to be hit with additional fees. This is quite common in the world of rental cars, so to best prepare yourself, there are unexpected fees you should be looking out for.

For starters, do you plan to buy rental car insurance? While having personal auto insurance is not a requirement for most rental cars, it is certainly helpful to add it on to cover potential expenses and liability should you be in a car accident. Rental car insurance can be purchased directly from the rental car agency and prices vary. This is where having a travel credit card comes in handy; if you use the Chase Sapphire Reserve card to book, for example, rental car insurance is covered with up to $75,000 in damages. Better yet, if you have enough points racked up, some cards will let you book a rental car using points you've accumulated from everyday purchases.

Another common additional cost is gas. Is it better to let the rental agency take care of gas (as in, return it without the tank being full), or to fill up before returning? The answer, financially speaking, is typically the latter, but always follow the fuel policy that best suits you. Something else to keep in mind is the time in which you pick up and return the car. Stay within 24-hour windows to avoid extra daily charges.