Travelers are more eager than ever to hit the road and travel as restrictions brought on by the Coronavirus pandemic loosen. But since the very onset of the pandemic, renting a car came with its own particularly frustrating baggage.

As travel dropped in 2020, rental car companies were undoubtedly hit hard. Companies like Hertz were forced to file for bankruptcy (having since bounced back) and others had to sell off thousands of cars from their fleets. Unfortunately for travelers, this means higher car rental prices and lower availability until travel is back to its full potential.

During non-pandemic times, I’d almost never recommend using rewards points for rental car bookings since you can almost always find a rental car deal through Autoslash, Hotwire, Kayak or Priceline if you don’t care what company you’re renting from. When these kinds of deals don’t exist, however, here’s what you need to know about booking rental cars with reward points.

How to use reward points for rental car bookings

There are four ways to use reward points for paying for a rental car. These are redeeming cash back rewards, redeeming flexible reward points, using car rental loyalty program rewards and booking a car with airline miles.

Cash back

Using rewards from a cash back credit card is straightforward. You simply use your credit card to book and pay for the rental, then request the reward redemption based on the rules and rates of the cash back card that you have. You’ll be charged for the rental, and then reimbursed as a statement credit. Choose a cash back card with a high redemption return for best value. Here are our top picks for the best cash back credit cards.

Rewards points

If you have a card that is part of a flexible reward points program, like American Express Membership Rewards or Chase Ultimate Rewards, you can book a rental car through the travel portal just like you would for booking a flight or hotel. Redemptions are still tied to the cost of rental, but will vary based on the points redemption value of your particular card.

Loyalty programs

If you frequently rent cars through any of the major car rental companies like Hertz, Avis or National, you should be earning points in the rental company’s own loyalty and rewards programs. Just like airline programs, these are free to join and typically give you 1 point per dollar spent on paid rentals.

If you join the Avis Preferred program, for example, you earn 1 point per dollar spent on rentals (a minimum of 100 points per booking); and can redeem your points for free rental days starting at 700 points.

If you happen to have a stash of rental car rewards points, what better time to use them than the present. Likewise, if you don’t have any rental car loyalty account memberships, it’s a good time to join since you’ll be earning lots of points if you wind up paying for a car rental.

Airline miles

Nearly every airline frequent flyer program has an option to redeem your reward miles for rental car bookings. The exchange value of airline miles for rental cars typically isn’t as good as using these miles for booking flights, but it is an option. It might be worthwhile if you’re earning more miles than you can spend on flights through a co-branded airline credit card. Here are our top picks for the best airline credit cards.

When should you use your points for a rental car?

If you’re the kind of rewards points collector who likes to maximize the cents per mile you get when redeeming rewards, car rental redemptions might not be for you. Rental redemptions are almost always linked to rental prices, so if prices are high, you’ll have to pay a lot of points.

Value, however, isn’t always only about the numbers. If you really need a car rental and can’t afford to pay the higher rental rates we’re seeing, using rewards points or airline miles for a car rental may still be a good value to you.

Tips for booking a rental car

If you are looking to book a car for upcoming travel, my top tip is to make your plans sooner rather than later. If you decide to pay for the car rental, most companies don’t require a deposit and have very liberal cancellation rules.

It doesn’t hurt to book a paid reservation as far as possible in advance, then cancel or change the booking as you get your flights and accommodation sorted. If you’re booking with points you’ll still want to book as far in advance as possible, but make sure you know the rules, as some airline programs won’t reinstate your points if you have to cancel your rental.

You’ll also want to double-check the rules of your credit card rental insurance if you’re planning on using the primary rental coverage of a card like the Chase Sapphire Reserve®. Most credit cards only provide the insurance benefit when you use the corresponding card to pay for the rental — and you’re likely to lose this benefit if you use your airline miles to cover car rental costs. Do this research in advance so you don’t wind up paying hundreds of dollars (or thousands of extra points) for insurance on your “free” car.

The bottom line

Booking car rentals with your rewards points may be an option you consider this year as rental rates work their way back down. Though using credit card rewards for car rental bookings isn’t always the best way to maximize redemption value for your points, redeeming rewards for a rental may still be of great value to you if covering the cost of a car makes your trip possible.