Is it better to prepay for a rental car?

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Car rental pricing is almost always a circus. Prices change by the hour depending on availability, vehicle class and sometimes even weather. On top of that, most car companies will have a ‘pay now’ price and a ‘pay later’ price at checkout, leading you to ask, “When it comes to car rental, do I pay now or pay later?”

The answer usually seems pretty clear: prepaid car rental is cheaper, so why not pay up front? Well, there are a number of reasons and factors that might make you reconsider the benefits of prepaying for rental car.

Why are prepaid car rentals an option?

If you shouldn’t prepay for your rental car, then why are prepaid car rentals an option? It’s essentially the same reason why you can show up with a confirmed reservation only to find out car rentals are sold out: no shows. Car rental data suggests that up to one-third of people simply never show up for their car rental, leading traditional rental companies to overbook and maximize their profits.

Prepaying for a car rental is guaranteed money for a rental company, which is why they hook you in by offering anywhere from a 5-30% discount to prepay. It might seem like the better deal, but rental car prepayment is not always the best option.

Why you shouldn’t prepay for your rental car

Okay, let’s get to it. Why is prepaying not the best option if it’s almost always cheaper? There’s a little more involved than meets the eye. 

1. Cancellation fees

Many prepaid rental car prices come with sneaky terms and conditions, like $25 cancellation fees if you cancel more than 24 hours in advance, $50 if you cancel less than 24 hours in advance, and total loss of your money if you forget to cancel and don’t show up.

2. Shifting plans

While it can seem easy to avoid, if plans change at the last minute or extreme weather pops up, you may be left holding the bag and unable to modify your reservation without hefty fees.

3. Volatile pricing

Folks who score the best deals on cheap car rentals know to check prices daily (and sometimes hourly) for better deals. If you choose “pay later,” you aren’t tied to a reservation or subject to cancellation fees, and can continue to search for better deals as your trip gets closer and the future is “more” certain.

Prepaying for your rental car on “opaque” car rental sites

“Opaque” is a term that refers to sites like Priceline, Expedia and Travelocity that offer deeper discounts on car rentals without showing you who (and sometimes what) you’re renting from. These opaque sites usually offer much lower prices on rental cars than the prepayment option on rental car company homepages, but are subject to many more restrictions than you might imagine.

Opaque sites usually have high cancellation fees or inflexible date ranges, so you should be 100% sure of your travel plans before you pull the trigger on these sites. Otherwise, the car rental pay later option may be better for your trip.

Avail can help you get the best deal

Avail is a car sharing company that’s a lot like car rental, but way easier and more transparent. We don’t have any hidden fees and, even better, you can modify or cancel your reservation for free as long as it’s before the scheduled start time. Insurance coverage from Allstate and 24/7 roadside assistance are available for every trip so you can drive with peace of mind. Check out our selection of great cars from city-smart sedans to rugged SUVs and find the perfect fit for your trip.