Car Rental in Portugal: How to Avoid Extra Charges

If you want to explore more of Portugal, then often you’ll need the flexibility of renting a car. Beyond the major cities and well-travelled locations, you’ll quickly feel that sense of discovery. Small town charm, authentic food, and even lower costs! Unfortunately, in many of these smaller towns and even cities public transport can be inconvenient or sometimes non-existent, and often taxis can be expensive. Despite car rental in Portugal being straightforward, one of the complaints I hear most often, is about the cost of car hire and all the extra fees added. In this guide to renting a car in Portugal, we’ll cover everything you need to know. We’ll explain all these costs and extra fees, and if or how you can avoid them.

The Complete Guide to Car Rental in Portugal: How to Save Money and Avoid Extra Charges?

One of the first things you need to do, is always search, compare prices and, always book in advance. Not just to save money, but at peak times of the year some companies entire fleets can be booked. This can be a major problem in the Algarve during the summer, and in other areas around public holidays. Many of the biggest car rental comparison websites also have free or low-cost cancellations. Although you’ll be locked into a provider you can still change dates. Our favourite search provider is Zest Car Rental, but you should also check other providers like rentalcars.com. These websites allow you to search, compare and see the prices of these extras. So, once know when and how long you need a car for, what do you look out for next? We’ll start with the basic fees and costs that apply to all car rentals in Portugal. Then move on to the optional extras that you may need when renting a car in Portugal. The basics are the deposit, the excess, collision damage waiver, and the fuel options that will be offered to you.

The Deposit

What is it? This is the deposit the rental company will hold on your credit card for the duration of the car rental.

How much? It can be nothing, as low as €100 or even as high as €3,000. It usually depends on the provider, the category of vehicle chosen, the individual and the insurance/CDW chosen.

Can you avoid it? In most cases you can avoid a high deposit before booking, by choosing a company that charges lower deposits or even none. If you’ve already booked and can’t cancel, then often the company will reduce or remove the deposit if you pay for their highest (and usually most expensive) level of insurance cover. Similarly, you can also take a smaller or less expensive car, the premium models will always have higher deposits.

Top Tip: It is really important to check what the deposit is and have the means to pay it by credit card in the name of the main driver before you arrive. In the last few years, I’ve seen people attempt to pay by cash, friends try to split the deposit across two credit cards, and people attempting to use a debit card to no avail. It also usually cannot be an American Express, a pre-paid credit card or a debit card. It has to be a credit card in the name of the main driver.

The Collision Damage Waiver (CDW) and Excess Waiver (EW)

What is it? Although all companies provide the minimum insurance you need to drive, many include an excess that is not covered by this insurance. If your vehicle is damaged even if it’s not your fault, you will usually be charged from this excess first.

How much is it? The excess will often mirror the deposit. However, many companies will provide extra levels of insurance often called a Collision Damage Waiver (CDW) or an excess waiver (EW). Rental providers often advertise very low car rental costs in Portugal – sometimes as low as €3 a day, then charge ten times that in insurance costs or excess waivers.

Can you avoid it? There are few ways to avoid this but there are a couple of methods to reduce the costs of a collision damage waiver. Obviously, if you fancy the risk then you can try your luck and not cover it all but remember the cost of any damage even if it’s not your fault will be taken from this excess first. It is very risky and you might also spend your trip worrying about every possible scratch. The alternatives are to reduce the excess, pay for a Collision Damage Waiver from the rental company, or take out a separate insurance policy that covers your excess.

Collision Damage Waiver and Excess Insurance

If you used a comparison website often you can take out an additional policy at the time of booking (cheaper and they often include excess cover), or you can take out a specialist excess insurance policy (the cheapest option). If you travel to Portugal and rent vehicles often, then we really recommend the last option. Providers like Icarhireinsurance, Insurance4carhire and Questor insurance can provide yearly policies for your excess. This means every time you rent a car in Portugal your excess will be covered. However, will still have to pay a deposit/excess, it’s just the insurance company will cover it instead of the car rental company. Which is much cheaper for you. Just remember that if anything happens you will still need to pay the rental company first, but your insurance will reimburse you afterwards.

Top tip: Remember that these options will require you to say no to the car hire agents when you pick up your rental. Their agents will use underhand tactics to push you to still take out their own insurance policies. In my own experience, I’ve been told that the extra insurance isn’t good enough, and on one occasion even been told it’s a scam! When I flat out refused to take the insurance policy, I have also been told that I would be charged a fee for all the paperwork if anything happened to the vehicle, and funnily enough the fees for all the paperwork were less than the cost of the insurance policy they were trying to push me towards. It’s an outrageous practice that isn’t discussed enough.

The Fuel Options

What are they? The majority of companies have several different fuel options; usually pre-paying and allowing you to return the vehicle empty, post-paying allowing you to return the vehicle empty and paying afterwards, or simply returning the vehicle with the same amount of fuel (usually the cheapest option).

Can you avoid it? Yes. If you’re looking to save money, always go for the option that allows you to return the car with the same amount of fuel you hired it with. Both other options usually include a premium on the cost per litre of fuel and an additional fee for refuelling. Unless you really want to pay for the convenience of not having to fill the car up on the day you return the vehicle then neither should be an option for you. If returning the vehicle with the same amount of fuel, make sure to check the fuel level matches the rental agreement.

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Car Rental in Portugal: The Optional Extras

With those basics that apply to pretty much all car rentals the world over out the way, we’ll move on to optional extras that you might to look out for when renting a car in Portugal.

Out of Hours Collection or Return Fees

What is it? Collecting or returning a car, outside of the rental providers office hours.

How much is it? It varies widely between rental companies and even rental locations. Guerin at Faro airport operate from 06:00-00:00 daily and charge €44.60 for collections or returns out-of-hours. Whereas Rentcar4Less operate from 07:00-22:00 and charge €20 for a collection or return out-of-hours at Lisbon airport.

Can you avoid it? Unfortunately, if you have an early or a late flight this can be an unavoidable cost if collecting from an airport in Portugal. However, each of the providers has their own costs and own office hours associated with this. What you can do, is check the small print and check what each of the companies charge and choose the cheapest option depending on when you’re arriving. If your accommodation is close to the airport, it may actually be cheaper to return the car during the day and return to the airport by public transport or even a taxi.

Sat Nav and GPS

What is it? The fee to rent a Sat Nav direct from the rental company.

How much is it? The fee varies widely but typically around €5-10 a day, with some companies charging up to €200 deposit on your credit card!

Can you avoid it? Absolutely, yes. We recommend using something like Google Maps or Waze on your phone combined with an old-fashioned paper map. Something else to consider is that some of the newer rental cars also have inbuilt satnav units. One I hired recently – a Seat Ibiza from Goldcar – had an inbuilt satnav, so it’s definitely worth checking before you pay for one. If you must rely on a separate satnav, then consider bringing your own (just remember you may need to add EU maps). Or consider buying a new one before you arrive. The rental costs vary widely but it’s almost always cheaper to update your own and, in some cases, even purchase one if you plan on more than one trip! For example, DriveOnHolidays in Faro charge €10 a day to a maximum of €100 and require a €200 deposit!

Child Seats and Booster Seats in Portugal

What is it? To comply with EU legislation children under the age of 12 or shorter than 1.35m must use a booster seat.

How much is it? Cost varies widely but typically around €5-15 per day per seat.

Can you avoid it? When it comes to safety, we don’t advise cheaping out. However, you can shop around as once again the different companies all charge different rates. CRC in Lisbon charge €10 per day to a maximum of €100 for a booster or child seat. RentAuto also available in Lisbon charge €5 per day to a maximum charge of €50. With these two examples you can see how these costs add up differently. Shopping around might be worthwhile if you have a bigger family or you’re planning a longer trip. Another alternative is to buy one when you arrive. Basic booster seats can be bought at superstores and supermarkets for around €10. The final option is to simply bring your own – many airlines now allow this for free. Once you find out how much they cost to rent, it might seem like a much better idea!

Additional Driver Fees in Portugal

What is it? The fee to have a second or third driver on the rental agreement.

How much is it? It can be free or anywhere between €7-€20 per day.

Can you avoid it? It can be avoided by reading the small print and choosing a company that doesn’t charge extra or charges less. Goldcar charge €7.95 per day per extra driver. At the other end of the scale DriveonHolidays charge a massive €18.45 per day per extra driver! Whereas RentAuto don’t charge for extra drivers at all (according to their website). The first question to ask is, do you really need an additional driver? An extra coffee stop or even a bed and breakfast if you’re crossing the country, it might work out cheaper than swapping drivers. If you really need the extra driver find a company that offers them for free as part of the booking!

Young Driver Fees When Renting a car in Portugal

What is it? Generally, all drivers need to be over 21, however those aged between 21 and 25 usually receive additional insurance costs. The only company I know that lets 19-20 year olds rent cars in Portugal is Goldcar, with extortionate fees.

How much is it? As always, the fees vary between companies for reference DriveonHolidays charge €15 plus tax, while Dollar charges €9 a day for a young driver.

Can you avoid it? Not if you’re a young driver, you can of course do your research and pick a company that charges less.

Top Tip: Even if you’re over 21, you still need to have held your license for over one year to rent a car in Portugal. If you don’t have an EU license than you also need an International Driving Permit from your local authority.

One-way Car Rentals in Portugal

With cheap flights in and out of Lisbon, Faro and Porto. It’s becoming a popular idea to fly into one and leave from another. It’s an approximate 5-hour drive between Faro and Porto so over several days you can see multiple cities with minimal driving! It’s easy to see the appeal, but what most people don’t realise is the high cost of one-way rental cars in Portugal. Centauro charge a one-way fee of €150. It’s usually cheaper to hire a car and plan a round trip, than it is to have a one-way rental. These costs go up further if you’re considering a cross-border trip to Spain, for example hiring in Faro and dropping off in Seville. This rental results in Goldcar charging an additional €450 and Avis charging an additional €500! One-way car rentals in Portugal are only worth it, if you have some serious time constraints.

Automatic or Manual Car Rentals in Portugal?

There is still a significant premium on automatic cars at all locations in Portugal. The cheapest manual for a weekend in May in the Algarve was €41. The cheapest automatic was €79, so a considerable increase on a weekend rental! If you’re looking for cheap car rental in Portugal, it is best to skip the convenience of an automatic and take a manual. If you absolutely can’t drive a manual, I’m not sure the busy cities, or tight towns are really the ideal place to learn as a foreigner!

One Final Trick that will Increase the Costs: Currency Conversion

After all that, there’s one final trick I need to mention. The rental companies will often try to charge you in your home currency and let their own bank provider handle the currency conversion to euros. This bumps the costs to you even further. On several occasions, with multiple companies I’ve been handed a card payment machine with my own currency already programmed in. When I’ve asked why, I’ve even been told things like ”I’ve put it in Pounds so it’s simpler for you to know the exact amount” to ”it will take too much time to go over everything in a new currency”. If you have confidence in your own bank provider (or use a specialist travel debit/credit card with better rates) you should insist on paying in Euros and let your own card provider handle the payment conversion.

Summary

Portugal is an impressive country to road trip and might be my favourite country to road trip so far! With castles and fortifications in seemingly every town, Portugal can often feel like a fairy-tale place. We don’t want to put you off renting a car in Portugal, we just want to prepare you for some of the costs and extras! As we’ve written, it really is best to search and compare. Our favourite search providers at the moment are Zest Car Rental and rentalcars.com. Zest give you a full breakdown of the costs of each extra and allow you to search, compare and see the prices of each company’s offering.

This guide to car rental in Portugal covers the basics that apply in almost every scenario in Portugal. For specific advice covering the Algarve, take a look at our Guide to Car Rental in the Algarve!

Affiliate disclosure. Some of the links included in this post are affiliate links. What this means is we get a tiny percentage of the booking fee if you do click the links. This costs no extra for you and helps support the site

1 thought on “Car Rental in Portugal: How to Avoid Extra Charges”

  1. Having hired cars on many occasions in Portugal and found the security deposit absolutely ridiculously large, I’m delighted with finding you and your recommendation of Zest. In future, I will hire once I get here and not from the UK

    Reply

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