Be Smarter About Car Rentals
Credit: Michael Bodmann / Getty Images

There is no greater challenge for the cost-conscious traveler than saving money on rental cars. Rates vary significantly based on time of day, myriad discount codes, and existing reservations and you can't even be confident that you'll get the vehicle you want when you finally find the damn lot. Because of all the variables, it pays to study the rental business a bit and approach the rental process strategically.

First, bear in mind that almost all reservations can be cancelled without penalty unless the agreement specifically states otherwise. Prices can sometimes drop significantly a few days before arrival, allowing you to re-book and save big bucks on longer rentals.

Second, pay attention to the timing of your reservation. Most rentals are priced in 24-hour increments, and you could be charged half the daily rate if you go over just a little. Weekend rates kick in at specific times depending on the agency – and could go up or down. The bottom line: Changing your arrival or departure time by a few hours could save serious cash.

Third, exploit the fact that the cheap economy car you reserved online may not be available when you arrive. Ignore the upsell at the counter and you may get an upgrade for free. Or, if you have elite status with the company, remember to book a mid-size car for a complimentary upgrade to full-size.

Leverage Your Relationships

The most important step in renting a car is to sign up for the company's loyalty program, which will keep your information on file and usually let you bypass the rental counter at the airport. Once you have an account, you can also seek out elite status.

Regular promotions award one year of status for free, and some credit cards, like The Platinum Card from American Express, include status with the three major brands. (Platinum Cardholders also get special discounts and, at Hertz, a four-hour grace period to avoid late return fees.) Once you have elite status with one program it is relatively simple to match it with a competitor.

Elite status earns a discount on its own, but rental agencies offer a dizzying array of discount codes and coupons. You may be able to contact your corporate travel department to see if you're already eligible to use one. Discounts are also offered just for being a member of an airline or hotel loyalty program or joining organizations like AAA and Costco. Check online forums like FlyerTalk to find lists of discount codes that may apply to your situation. And if you have paper coupons, feel free to use them over and over. Most agencies don’t ask you to present them.

Re-Think the Traditional Rental Car

To arrive in style without breaking the bank, check out a new rental concept from Silvercar. Their fleet – currently based in Dallas, Austin, San Francisco, and L.A. – consists entirely of Audi A4 luxury sedans with features like GPS, in-car WiFi, and satellite radio. A concierge picks you up at the airport, and paperwork has been replaced with a QR code on the windshield that you scan with your smart phone. These efforts to streamline the rental process help keep costs down, and at around $70 per day are much lower than renting a premium car from major agencies.

Find Cheaper Alternatives for Insurance

Insurance is one of the biggest add-on fees associated with rental cars and probably the least necessary. Not because you don't need insurance, but because you already have it or can obtain it more affordably.

Some of the discount codes mentioned above include insurance for free, but most people already have a major credit card that provides secondary insurance coverage that kicks in after your personal car insurance policy. Certain cards, like those affiliated with United Airlines, offer primary coverage, reducing the chance of a claim that could raise your premium. American Express also sells Premium Car Rental Protection at a flat rate of $24.95 per rental (not per day) that covers many luxury vehicles.

Yes, renting a car is still complicated after all these steps, but you can save as much as half the cost by avoiding fees for stuff you don’t need and securing discounts on the rest. Practice your new skills well before you travel by booking and re-booking the reservation as you find more ways to save money.