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Hiring a car can be a significant part of the total cost of your holiday – particularly if you want to get off the beaten track and see places that aren’t covered by public transport. And it’s worth shopping around for deals from the major car hire companies like Hertz, Avis and Budget – sometimes there doesn’t seem to be any logic to their pricing and one company can be 25% cheaper than another on certain dates.

Here are a few tips to cut the cost of hiring while you’re on holiday:

Use a Car Hire Comparison Site

You can save time shopping around on individual company websites by using a care hire comparison site. Many of the online travel companies like TravelSupermarket and Skyscanner provide a handy hire car search for the country and dates you’re planning to visit.

You can sometimes pick up a good deal through airline sites too – for example Easyjet, Ryanair and British Airways will often offer car hire as part of their booking process. This isn’t always the cheapest though, and you should compare before buying.

Don’t Assume the Hire Company’s Insurance is Mandatory

The insurance packages offered by hire companies can be confusing, especially after a long flight. Collision Damage Waiver Insurance (often written as CDW) covers the full market value of the hire vehicle if it becomes damaged or stolen while you’re hiring it. In Europe, CDW insurance is usually included as standard. But in other areas, particularly the USA and Canada, you may be required to purchase this cover separately and is often quoted as an optional extra.

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There’s also another insurance product that’s usually offered. You’re required to leave a deposit when collecting the vehicle – up to £2,000 taken on your credit card. This is to cover the ‘excess’ on the hire company’s insurance policy in the event of an accident. Excess insurance essentially guarantees your deposit so you get it back if there’s a problem.

You’ll usually be offered both of these options, but hire companies often put a significant mark-up on the price. For example, excess insurance from a big hire company like Avis can come in at £30 a day in Europe while Hertz charge almost £200 a week*. And a CDW insurance package in the US or Canada could set you back over $40 a day from Budget.*

The hire companies will often give the impression that you have to buy their insurance. This usually isn’t the case and specialist online insurance companies in the UK will offer you a daily, weekly or annual package covering a single hire or multiple trips in various regions of the world for a lot less than the hire companies.

For example Insurance4CarHire currently has annual excess cover for Europe starting at £40. And they offer annual CDW insurance for the USA at £109.* An insurance search site, like Confused.com will show you more companies offering these products.

There could be other benefits of arranging your own insurance too. Basic hire company policies often don’t cover items such as tyres and windscreen breakages, whereas the specialist packages will include this in your annual cover. You can also add multiple drivers.

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As always with insurance, you need to check the terms and conditions carefully to make sure it’s right for you. For example, some UK and European single hire insurance packages won’t cover cars hired within a certain distance of your home address, so they might no be suitable for a trip in your home country. You also need to report any accident to the local police and get good records for your claim – something all reputable hire companies will be able to provide.

Hire a ‘Banger’

Some hire companies specialise in renting out older cars. These can be much cheaper than the ‘big’ multinational companies, especially for longer trips. For example, anyone travelling to New Zealand should check out Apex Car Rentals. Their cars are up to 10 years old but are in good mechanical condition. When you make a booking, you’ll know exactly which make, model and age you’re getting. And you can save a lot. A four-week, round trip booking from Auckland Airport in a compact Mazda in January and February 2017 will cost £460. A similar sized new car from Avis will be £790.*

Relocation, Reclocation, Reclocation

Popular touring destinations often have a preferred ‘direction’ for one-way car hires. So in New Zealand, visitors tend to pick their car or camper van up from Auckland Airport and then travel south, dropping off in Wellington or even Christchurch on the South Island. One-way hire fees of up to $350 (£170) are often added to the price.

But you can make some serious savings by taking a ‘relocation’ deal. You start from the place where most people drop off their vehicles. It saves hire companies having to load them on a transporter to get them back.

In New Zealand, popular relocation routes include between Auckland and Christchurch, Auckland and Wellington and Christchurch and Queenstown. Rentals can start from just a few NZ$ a day – compared to a normal fee of around NZ$40. But one catch is that they’re often only for a few days at a time. To get a round this you could ‘daisy chain’ different rentals together to cover the route you want to take. Look at Jucy Rental’s site for more details.

Interstate Blues

An American road trip is the dream holiday for many travellers’. The country has a fantastic, easy to navigate road system with some amazing sights to take in along the way. But be careful – picking up a car in one state and dropping off in another can be costly. It’s also confusing with no obvious pattern to the charges – some interstate journeys will include a basic one-way supplement of around $100, while others can add an extra $500! Different companies seem to have different policies too. It helps to check the cost with a few car hire companies first.

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Alternatively, domestic flights in the US are cheap and frequent and the network is extensive, reaching even the smallest towns and cities. Compare flying between states and hiring locally if you want to save money on your trip.

*Prices correct in April 2016

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