We hired a car in Australia for 17 days. A new Toyota Corolla sedan hybrid, booked through Booking.com, for £306 all in. That is £18 a day for a car that was genuinely nice to drive and cost very little to run.
Here is the part that matters financially. Had we bought the excess waiver at the rental desk, at the rates those are typically sold for, it would have cost somewhere between £255 and £425 for the same 17 days. The insurance would have cost more than the car.
We did not buy it. We never have, in any country. We buy standalone excess cover online instead, and across every rental we have taken it has come in at least 70% cheaper than the desk price.
That is not a quirk of one booking. It is how car hire pricing works nearly everywhere, and it is the single biggest avoidable cost in hiring a car abroad as a UK family.
Disclosure: This article contains affiliate links. If you book through them we may receive a small commission at no cost to you. The rental described here is one we booked and paid for ourselves.
Key Takeaways
- Our 17 day Australian rental cost £306, about £18 a day, for a new hybrid sedan.
- Rental desks commonly sell excess waivers at £15 to £25 a day, sometimes more. Over a longer hire that routinely exceeds the cost of the car.
- We have bought standalone cover online for every rental in every country. It has cost between £15 and £80 per trip depending on length, and has always been at least 70% cheaper than the desk price.
- A standalone annual worldwide policy from a UK provider costs roughly £40 to £65 for the whole year and covers every rental you take in it, which beats per trip cover if you hire more than once or twice a year.
- Which? found the desk product can be over 20 times the price of standalone cover for the same trip. On average you pay around eight times more buying at the desk.
- The deposit is a separate issue from the excess. It is a pre authorisation hold on your credit card, often between AUD 100 and AUD 3,000 depending on car and provider, and it can take up to 31 days to clear depending on your bank.
- That hold is a cash flow problem, not a cost. Plan for it if you are living off a fixed runway.
What We Actually Paid
The booking was straightforward in a way car hire usually is not. Booking.com's car section showed a wide spread of options across every price bracket, the total was clear before we committed, and there was none of the usual dance of a headline price that doubles at checkout.
£306 for 17 days. The car was new, the hybrid drivetrain meant fuel was a minor line rather than a major one, and nothing about the pickup was difficult.
We have hired through the comparison sites before and this compared well, both on price and on how little friction there was in the process. That is worth saying plainly, because our usual finding on this site is that platforms cost you money rather than save it. On accommodation that is often true. On car hire it was not.
The Excess, and Why the Desk Price Is So High
Every rental comes with an excess, which is the amount you are liable for if the car is damaged or stolen. It is typically a large number, often the equivalent of £1,000 to £2,500, and in Australia it can run to AUD 3,000 or more depending on the vehicle and the location.
The rental company will offer to reduce that excess to zero for a daily fee. This is the product sold to you at the desk, usually at the point where you are tired, have children with you, and have just been told what your liability is if anything happens to the car. It is an extremely effective sales moment.
The problem is the price. Desk waivers commonly run £15 to £25 a day and sometimes more. On our 17 day hire that is £255 to £425, against a car that cost £306. Which? found that the desk product from one major rental firm cost £287 for a week in Spain, against £12 for the standalone policy they rated top: a difference of more than twenty times for the same week. Across the market the desk product averages around eight times the cost of buying separately.
The Three Ways to Cover It
Buy at the desk. Simplest, most expensive by a wide margin. The only real argument for it is that the claim, if you have one, is settled between you and the rental company with nothing for you to reclaim afterwards.
Buy a standalone policy online. This is what we do. A quick search turns up a large number of UK providers, and we have used one for every rental we have taken. Per trip cover has cost us between £15 and £80 depending on the length of the hire. In every case it has been at least 70% cheaper than the desk equivalent, and usually a good deal more than that.
An annual worldwide policy runs roughly £40 to £65 and covers every rental you take in the year, so if you are hiring more than once or twice it works out cheaper again than buying per trip. These policies typically also cover things the desk waiver excludes, such as tyres, windscreens, wheels, keys and misfuelling, which are among the most common real world claims.
The mechanism is different and you need to understand it. You still carry the excess with the rental company, so if there is damage they charge your card and you reclaim from your standalone insurer. You need the money available and you need to keep the paperwork. For most families that trade off is worth saving several hundred pounds.
Check what you already have. Some UK travel insurance policies and some packaged bank accounts include car hire excess cover. It is worth ten minutes checking before you buy anything, because paying twice for the same cover is a common mistake.
One thing to check before you buy: confirm the policy covers the country you are hiring in and the class of vehicle you have booked. Most worldwide policies exclude a short list of countries and some vehicle types, and it is a five minute read that saves an unpleasant surprise.
The Deposit Is a Different Problem
This is the part that catches long term travellers out, and it is not an insurance question at all.
Separately from the excess, the rental company will place a pre authorisation hold on your credit card when you collect the car. In Australia this commonly runs from around AUD 100 for a small car with full cover up to AUD 3,000 or more without it. The money is not taken, so you are not charged interest on it, but it is not available to you either.
The release is slower than most people expect. Europcar quote around seven to fourteen days. Hertz quote two to ten business days. Depending on your bank or building society it can take up to 31 days for the hold to clear back to available credit.
For a family living off a fixed monthly runway, having £1,500 of credit unavailable for a month is a genuine planning issue, particularly if it overlaps with a month when you also have to pay for accommodation upfront. It is not a cost, but it needs to be in the plan.
Two practical points. You will usually need a credit card in the main driver's name, not a debit card, and taking more cover generally reduces the size of the hold, which is sometimes a reason to take some cover even when the pure cost maths says otherwise.
Booking It
Whatever you book through, the rule is the same: book the car, decline the excess product at the desk, and arrange the excess cover separately before you travel. Sort the standalone policy while you are still at home with time to read it, not at a counter with tired children and a queue behind you.
Pay attention to the fuel policy as well. Full to full is the only one worth accepting. Anything else is a margin opportunity dressed up as convenience.
Paying for It
If you are paying in a foreign currency, the same rule applies here as everywhere else: let the transaction happen in the local currency rather than accepting the rental company's offer to convert it to pounds for you. We covered why in our piece on paying for accommodation in pounds, and the mechanics are identical for a car.
The deposit hold has to sit on a credit card, which is one of several reasons we keep a Halifax Clarity alongside Starling and Wise. Where the hire company will take a bank transfer for the balance rather than a card payment, we settle it through Wise at the mid-market rate instead of paying their conversion margin. A debit card will not be accepted for the hold by most companies, and you do not want a large pre authorisation sitting against your main spending account.
Who This Is and Isn't For
If you hire a car once every few years for a week, the desk waiver is expensive but the absolute numbers are small enough that convenience might genuinely win. Buy it and get on with your holiday.
If you are travelling long term, hiring for multiple weeks at a time, or taking more than one rental in a year, standalone cover pays for itself on the first hire and then keeps paying. On our 17 day rental alone the difference was in the region of £200 to £380, which is more than a month of our connectivity, transport and activities combined.
The car was excellent value at £306. It would not have been at £561 to £731, which is what it becomes the moment you say yes at the desk. That is the whole article, really: the rental was never the expensive part.
