A guide on how car rental rates work, including what you need to know about pricing and fees. Find out how car rental rates work and why they change so frequently.
How does car rental pricing work
When it comes to car rental prices, you might notice how they keep changing. It might be an unusual pricing method for everyday shoppers, but rental pricing is no different to flights and hotels. Car rentals have very dynamic pricing that keeps their pricing strategy constantly changing.
In simple words, car rental rates will depend on availability and demand. The higher demand and less availability, the higher the rates will be. Conversely, more availability and less demand result in lower rates.
The best way to think of this is by looking at airlines and hotels. Car rentals act precisely the same way in their pricing methods.
Look for car rental deals in advance.
Dynamic pricing means that it depends very much on demand. If the car rental agency has an entire parking lot, they will offer cheaper deals. If the demand is high, their pricing will go up. It tells us that the further ahead you book, the more chances you have of grabbing the best offers.
Compare car rentals.
When you start planning your trip, you will soon notice so many car rental companies out there! And trying to get the best deals with the proper inclusions can be tricky. That's where Orbit Car Hire comes into play.
It is possible to compare over 100 rental car suppliers in over 25.000 locations globally on the same web page. In addition, you can compare specific car categories, additional extras and insurances, and more.
By comparing car hire deals through Orbit, you will find no hidden fees, the best service guaranteed and the best rates.
Car Rental Fees Explained
Car rental fees can be confusing and expensive if you're not familiar with them. In this article, we'll explain some of the most common charges so that you can make an informed decision when renting a car.
VAT in Car Rental
Also known as VAT Tax or Value Added Tax
VAT is always included in the car rental price in Europe. It can be added on top of the displayed price in the states. VAT in car rental varies between 15% and 30%, with the average being around 22%. This amount depends on the country the car is hired from, as each country has their VAT policies.
VAT is included in all offers found on the Orbit Car Hire platform.
One-Way Fees in Car Rental
It is also known as International One-Way Fee, Domestic One-Way Fee and Vehicle Return Fee.
If you plan to hire a car and return it to a different location, a one-way fee will be applied. This price can be different if you plan to return the vehicle to another country or if it's within the same country. The average cost for one-way fees is 50 EUR.
Car Rental Equipment
Also known as add-ons and extras (GPS, child seat, snow chains and so on)
When you rent a car, you will be offered to book extra equipment. It is always best to pre-book these additional extras as the agencies cannot guarantee availability when you arrive at their counter. They plan the gears according to demand, which can be limited at some points. Each agency will price its extras calculated on top of the rental price. This type of fee is typically calculated pay per day. So it can depend on the length of your rental on how much you need to pay for certain extras.
Surcharges in car rental
They are also known as Airport surcharges, Premium Location surcharges, Out Of Hours Fees and Late Return Fees.
Surcharges are additional fees that a car rental company may charge. These fees can vary greatly depending on the company, the location, and the type of vehicle being rented. In addition, surcharges may be assessed for out-of-hours service, late returns, or other services. Be sure to ask about any surcharges before renting a car so that you can budget accordingly.
Local Car Rental Taxes
Also known as Road Tax, Vehicle License Fee, Credit Card Processing Fee and Road Safety Fee)
When renting a car, local taxes may apply. These taxes can vary based on the city or state where you rent the vehicle. Be sure to ask about any local taxes that may apply when finalizing your rental agreement.
Local taxes may also apply to the cost of road tax or credit card processing fees. If you rent a car in certain places, you might see these taxes being calculated on top of the car price. With Orbit Car Hire, all offers shown on our webpage will include these taxes and fees.
International Travel Fees
Also known as Cross Border Fee.
If you plan to take your rental car across borders to another country, the car rental companies will charge you a so-called cross-border fee. This fee will vary between countries and companies, but this fee is 40 EUR on average.
Before taking a rental car across borders, it is essential to have permission from the agency before they need to be aware of this. There can also be the case that companies will not allow their vehicle to enter specific countries. And if they are on an island, they might forbid to take their car outside the island.
Car rental Insurance Fees
Also known as Administration Fee and Processing Fee.
It is always frustrating to return the rental car and have damage needed to pay for. Car rentals need to charge the damage, and since there is much documentation required, they can charge an administration fee or processing fee. This fee covers all the additional work that applies when it comes to damages, such as documentation.
Standard fuel policies are Full to Full, Same to Same, and Full to Empty.
When you hire a car, you will be able to choose the fuel policy that suits you best. The most common policies are Full to Full and Same to Same. The fuel fee applies in car rental because you will receive a vehicle with a specific amount of fuel. If you return it with less fuel, the car rental will charge you for the missing fuel and their service fee for taking the car and filling it up.
Orbit Car Hire Recommends: Book a car with Full to Full or Same to Same policy. We highly recommend avoiding Full to Empty, as we believe in a fair fuel policy.
Also known as Limited mileage and Unlimited mileage
The first fee you'll likely encounter is the daily rental rate. The base cost of renting the car for one day usually includes unlimited mileage. However, check the terms and conditions as some companies charge extra for unlimited mileage or have restrictions on where you can drive.
Many companies in Europe will offer unlimited mileage. However, you can find offers with limited mileage. With Orbit Car Hire, you can see it right away if your request is unlimited or limited. And if it is fixed, how many miles you have included and what the additional cost could be if going over the included mileage?
They are also known as Additional Driver, Young Driver and Senior Driver Fee.
You might notice that the introductory rental price will include one primary driver. Depending on the rental terms, there might be a fee for young drivers and senior drivers. Car rentals will also charge an additional fee for all extra drivers.
Typically, it is free for main drivers between 25 to 70. Some car rentals will allow drivers down to 20 to drive without extra costs and for drivers over 70. However, this will depend on the car rental company and the rules of each country.
Orbit's tip: When you search for a vehicle, apply your age in the search criteria. If there are additional fees regarding age, these fees will be included in the offers.
Why have rental car prices gone up
There are a variety of reasons why rental car prices have gone up. One reason is that the cost of owning and operating a vehicle has increased. It includes things like the price of gas, insurance, and maintenance. Another reason is that the demand for rental cars has increased. Finally, it could be due to an increase in travel or a decrease in the availability of other transportation options.
Due to the pandemic, car producers have not been able to meet the demand for manufacturing vehicles. In addition, it has resulted in the lack of options for car rentals to add to their fleet, so they are experiencing difficulty meeting the demand for tourism after the pandemic.
When do car rental prices drop
When car rental prices drop, it's often because demand is down. So if you're flexible about when you rent, you can usually snag a cheaper rate. Another way to get a lower price is to look for deals and promotions. Some companies offer discounts for booking online or paying in advance, so it pays to shop around. Finally, don't forget to ask about any special rates or deals available.
Not all rental companies are the same when it comes to costs
The rates for rental cars may look similar, though be careful when looking at different rental companies' total prices. Several companies may combine all expenses into the daily rate, while others can split the cost up into extra charges, and the way insurance is calculated is incredible.
Rent a Car with Orbit
At Orbit Car Hire, we compare over 100 companies worldwide, constantly searching for the best deals for you. So by comparing car hire at Orbit, you can be sure to find the best value for your holiday. Feel free to contact us for assistance with your car hire inquiries. You can also find us on social media for travel inspiration.
Related articles you might like
- What does 'or similar ' in car rental mean
- Renting a car for the first time
- The ultimate car hire checklist
- Returning a hire car
- Car hire deposit explained
Last updated on 5.1.2023