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Whether you’re going on vacation and want the freedom of driving around or need a car to drive while yours is in the shop, chances are you’re going to rent a car.

Car rental costs vary greatly depending on several factors like the type of vehicle you rent, which rental car company you use and where you rent the car. Understanding how these factors affect the price helps you budget for the expense.

Hertz, Enterprise, and Avis (three of the largest car rental agencies in the country as of January 2017) provide rates for a three-day weekend rental during the month of February at Orlando International Airport, Los Angeles International Airport and JFK International Airport. Below are the rates for these companies for an intermediate-size car that seats two to five people:

  • Hertz: About $184 in Orlando, $167 in Los Angeles and $246 in New York.
  • Enterprise: About $175 in Orlando, $148 in Los Angeles and $249 in New York.
  • Avis: About $137 in Orlando, $116 in Los Angeles and $153 in New York.

These rates include local taxes and fees, but not optional coverage types from each company. If you opt for extras like collision damage waivers, prepaid fuel, and infant or child car seats, expect to pay more for the rental.

Type of car

When choosing a rental car, the first question renters ask is how much space they need. Car rental companies classify their vehicles according to the size. Here are the most commonly used categories:

  • Economy cars are usually the least expensive and smallest cars the rental company offers. These vehicles have room for one or two people, along with their luggage.
  • Intermediate or compact cars offer more space than economy cars, usually through extra room in the trunk. Intermediate cars accommodate up to two adults and two children, along with a minimal amount of luggage.
  • Standard vehicles with full-size back seats have room for four adults. They also offer plenty of trunk space, making them a good choice for families that have a considerable amount of luggage to bring along.
  • Luxury vehicles are premium vehicles that range from sporty convertibles to full-size SUVs and vans.

In most cases, the daily rental fee increases with the size and category of the car or truck. However, sometimes rental companies offer specials on vehicles in certain categories, especially if they have plenty in stock.

For example, if the company has a limited number of economy cars available to rent for a certain weekend, they may offer a discount on standard vehicles during that same time period.

Location

As with other goods and services, prices fluctuate according to supply and demand. Many people find better deals and lower costs on car rentals if they rent from a location near the center of the city instead of from the airport.

Rental fees also vary in different regions of the country. Highly trafficked tourist areas may have lower rental fees than other locations because of the increased competition in the area. They also may have higher fees during popular seasons when demand is high.

Hidden fees and costs

Car rental companies also charge hidden fees that affect the cost of the rental. They build some of these fees into the cost of the rental. Others may appear on statements several months after the rental period. These fees include the following:

  • Renting a car at the airport costs more than renting at an off-site facility. This is because the airport charges items like an airport concession fee and a customer facility charge that the rental car company passes on to the consumer.
  • Some companies place an authorization hold on the customer’s debit or credit card. This fee, which ranges from $150 to $500, gives the rental car company some protection if the renter damages or fails to return the vehicle. The company releases the funds within a few days after receiving the rental car in acceptable condition.
  • Many companies charge a cancellation fee to renters who cancel their reservations less than 24 hours before the rental. If the renter paid for the rental in advance, the company will refund the payment minus the cancellation fee.
  • Renters who damage the interior or exterior of the vehicle must pay for the repairs. However, some renters end up paying for damage caused by previous drivers. For this reason, renters should thoroughly inspect the vehicle before driving it off the lot, take pictures of visible damage and alert an employee.

Although knowing about these hidden fees helps renters understand why the total rental fees cost more than the advertised rental price, there is usually little they can do to avoid them.

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