Cheap Car Hire

Automatic or manual gears?

In the USA, most hire cars are automatic; in Europe and much of the rest of the world the default is manual. If you have specific requirements, ensure you ask.

Do you need air conditioning?

Even in hot climes, don't assume the car will have aircon; this is still an added extra in many Mediterranean resorts.

Who's driving the car?

Most cheap bookings have fixed specifications, including only one driver. If two or more of you may want to split the driving, don't leave this until you get there, it can add a fortune on top. Instead, specify in advance, or use one of the car hire firms that offer an extra driver for free.

These include Sixt*, usually Holiday Autos* and sometimes Carhire4less, but always double check, as it can depend on the car and location. Then compare these to the cheapest using the techniques below.

Do also note you usually need to be at least 21, under 25's will usually pay surcharges and will be excluded from certain hire classes.

Are you a flash 'arry or economical Eric?

The smaller and less sexy the vehicle, the cheaper it'll be to hire. In summer soft-tops or coupés command a huge premium. One thing to remember if you're hiring in the USA, is that a small car in the States would often be defined as a mid-sized family car in Europe.

Try manually comparing prices and you'll miss your holiday by the time you get a good deal. Instead there are a growing number of cheap car hire companies which allow you to compare in seconds. Once you've booked, you'll usually be given a voucher to present at a specific hire company when you arrive.

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If you're still struggling to find a bargain, it's worth a quick check on Traveljungle, Atlas Choice and Car Hire Search

Yet there's one big warning, even if you find a cheap price:

Cheap car hire often has expensive insurance, so if you want more than basic cover, check out separate specialist insurers.

Basic cover often involves limited protection and a huge excess; you'll likely have to stum p up the first £500 of any problem. They'll then try and get you to upgrade to more protection, so always check out their cost, then compare it to the best in the Car Hire Insurance section.

• Name Your Own Price. Save up to 30%.

  The website Priceline* offers a 'name your price' function, which can often undercut the top deals. Rather than doing a search, you enter the pick up, date details, and the price you're willing to pay, so if you're looking for dirt cheap hire it's worth a try, though obviously you're booking blind. The catch? Once you enter your details, you're commited to booking if the offer is accepted and the payment will automatically be taken from your card.

• Are you also booking a flight and/or hotel?

  A number of specialist cheap travel brokers give discounts if you book car hire alongside a flight, hotel or both. The main one is Expedia* though just because they're at a discount doesn't automatically make it cheapest (see the Cheap Flights and Cheap Hotels guides).

• Consider a 'flydrive'

  For trips to the US, especially Florida, it's worth looking at a 'flydrive' package holiday deal, which means you get the flight and car hire all wrapped together from a tour operator (see Cheap Package Holidays).

• Try for cashback on top.

  Having found your cheapest car hire company, check whether it's listed on a specialist cashback website. These are companies which share a cut of the affiliate link revenue they receive if you click from them through to other websites. Doing this could cut your cost by a further 5%. If you're new to these sites, first read the Top Cashback Sites guide for a full explanation, and then to find the best paying cashback site for your hire companies use the Cashback Sites Maximiser.

• Use overseas websites.

  If you're heading to an English speaking country, or are fluent in the lingo, Google to see if that country's car hire sites are cheaper. It will usually be priced in that country's currency, so use the Travel Money Maximiser to calculate the actual cost.

• Check BAA and your airline's website.

  BAA, the official airports' website and airline websites like Easyjet and Ryanair ocasionally offer special discounts, so once you've done a comparison check the site to see if it's beatable.

• Haggle with individual branches.

  If you speak the language, or they speak yours, call up specific branches and try to haggle. This is especially powerful for longer trips or more expensive cars - just try a little polite chutzpah. Ask again at the desk when you pick up the car. The bigger companies in particular are likely to upgrade for a cheaper price.

• Look for online vouchers.

  Sign up to newsletters of the car hire comparison services and car hire companies directly. They often send promotional discounts that will shave an extra few quid off the price. Also have a look at the Discount Codes & Vouchers board of this site.

Insurance is a massive money spinner for car hire companies, so they'll use confusion marketing to baffle you into signing up to more expensive policies out of fear. Yet get it right and you can get the same cover nearly 70% cheaper.

Understand the different types of cover.

Whichever car hire company you take, you'll be met by an acronym to define your insurance. It's worth understanding exactly what these mean, so you can work out if you want higher-end cover.

• Collision damage waiver (CDW).

  This is the basic cover and it reduces your liability in the event of an accident. Without it, you could be forced to pay for the replacement cost of the vehicle.

• Theft waiver (TW).

  The equivalent of CDW but protects against theft. Also known as theft protection.

• Super collision damage waiver (SCDW).

  Reduces your liability to zero and covers tyres, roofs and windscreens.

• Personal insurance (PI).

  Pays out if you kill or injure yourself or a passenger, usually covered on regular travel insurance.

• Personal effects cover (PEC).

  Pays out if your property is stolen from a vehicle, usually covered on travel insurance.

Sadly, there's no one size fits all answer as to which is right for you. The starting place is check your Travel Insurance policy, as you may find some of the above events are covered anyway.

The bare minimum cover that should come included, though do always check, is CDW, a waiver if you injure other people (technically called third party liability claims) and theft. Yet these still leave much uncovered, such as tyres, windscreens, the undercarriage or roof.

However, within all these policy types there's one variable you always need to watch.

Check the excess level, the amount you'll need to pay towards any claim, if it's high any scratches or minor damage'll cost you.

Car hire excesses can be as high as £500, which means if you have an accident and the repairs cost £600, the insurer will only pay a hundred quid towards it: you'll pay the rest.

Find cheap car hire insurance.

Boosting your cover and dropping the excess via car hire firms can sometimes cost a massive £9 per DAY, which is nearly the cost of the hire itself. Yet you can get this additional insurance from separate standalone providers.

• Single trip car hire insurance.

  If you're going away for a couple of weeks check out insurers like Daily Excess* , Car Hire Excess, Worldwide Insure and Questor Insurance which offer additional excess cover from £3 a day. Though always double check the terms and conditions and that the cover’s suitable for you.

• Annual car hire insurance.

  Alternatively, if it's a longer trip (the maths says over 15 days) or you book car hire more than once in a year, then you can get an annual policy from insurance4carhire* at £49/year for Europe. It is, however, restricted to those aged between 21 and 74 and rental is limited to 31 continuous days and is not valid on vehicles rented within 150km of your home.

It's worth noting that broker Economy Car Hire includes built in excess insurance and while it's rarely the cheapest, it can be cheaper overall once you've bought the excess insurance elsewhere.