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Maximizing Car Rental Programs for Free Rental Days

by on January 4, 2013 · 33 comments

in Avis, Car Rental Bonuses, Enterprise, Hertz, TPG Contributors

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Between loyalty programs of their own, partnerships with airlines and hotels, and various promotions with pages and pages of fine print, maximizing car rental awards is a tricky business, so we asked TPG contributor Jason Steele to look at the major car rental companies and how to leverage points, miles and credit cards to get the most out of them.

While there are many ways to earn points and miles from renting a car, it is much more difficult to use points and miles to pay for a rental, and each of the major rental companies has a unique loyalty program that requires careful study and strategizing in order to maximize.

THE MAJOR PROGRAMS AND EARNING FREE RENTAL DAYS

Most of the major rental car companies offer some sort of loyalty program, but their systems are quite primitive in comparison to the airlines and hotels. Although many of these programs are designed for businesses, there is no reason that individuals or families can’t register and earn points.

Alamo:  Offers no loyalty program at this time.

Avis Corporate Awards

Avis Corporate Awards:  One free rental after 15 rental days, for any car class up to a full size. New members receive a sign-up bonus of 5 points, double points for the first 90 days, and complimentary Avis Preferred membership.

Avis First: This is available by invitation only to those who rent 35 days within a calendar year. Members earn points instead of frequent flyer miles and receive one weekend day for every four rentals of two or more days each.

Budget Business Program: Members earn $3 worth of credit per rental day towards $15 discount certificates. A maximum of seven certificates ($105) can be redeemed for one rental.

Dollar Express Renter Rewards

Dollar Express Renter Rewards: Members simply earn one free rental day for every 16 paid days.

Enterprise Plus: One point is earned per dollar spent on the base rate exclusive of taxes and fees. Free rental days start at 400 points and vary based on the dates and vehicle class. 10-20% bonus points are earned for different tiers of their elite program.

Hertz Business Rewards: One free rental day for every 15 paid days.

What you can get with Hertz Gold Plus Rewards.

What you can get with Hertz Gold Plus Rewards.

Hertz Gold Plus: Perhaps the most sophisticated program. Customers earn one point per dollar spent on the base rate, but since taxes and all other fees are not included, this could be less than half of the total cost in many cases. Weekend day award redemptions start at 500 points for an economy car, and like many airlines, there are two redemption tiers depending on availability. Specialty vehicle redemptions can cost thousands of points. Keep in mind that Gold Plus points are earned instead of airline miles.

National Emerald Club: According to their program terms, One credit per qualifying rental or one credit for every four consecutive rental days. Valid for rentals in the US or Canada only. Example: One rental lasts 8 days = 2 credits. One rental lasts 2 days = 1 credit. “  My reading is that a 1-7 day rental earns one credit and an eight day rental earns two. Fortunately, only 7 credits are needed for a free day by most members, and 5 or 6 credits are needed for elite members. Their current promotion, One Two Free offers a free rental day after two paid rentals until January 31st, 2013. A maximum of three free rental days can be redeemed per rental but all discounts, taxes, and fees are excluded.

Thrifty Blue Chip

Thrifty Blue Chip Rewards: One free day for each 16 paid days.

USING CREDIT CARD REWARDS FOR FREE RENTALS

Besides using the rental car companies’ own formulas, one way to redeem a rental car award is through a credit card rewards program. Here is a summary of the major programs and how many points each requires for redemptions or certificates.

Avis through Amex Membership Rewards

Through Membership Rewards you can get an eCERTIFICATE for Avis, Enterprise and National.

American Express Membership Rewards: Amex offers three low-value options for rental car rewards. Avis, Enterprise, and National car certificates are available at a redemption rate of 1 cent : 1 point. What’s worse is that these certificates are only valid for the base rate and you will have to pay cash for all taxes and fees. Cardholders also have the option to book a car with most companies through Amex’s travel agency and pay with points at one cent per point.

Chase Ultimate Rewards: Cardholders can book rental cars directly through Chase’s Ultimate Rewards online travel agency. I have found their search engine to be equal to or better than other online travel agencies, but it is not possible to book a one-way rental. Rentals can be paid using dollars or Ultimate Rewards points. Fortunately, rates are inclusive of required taxes and fees.

When using points originating from an Ink Cash, Ink Classic, Freedom, and standard Sapphire card, you receive a value of 1 cent per point, while holders of the Sapphire Preferred, Ink Bold, and Ink Plus cards can redeem points for 1.25 cents each. As always, points can be instantly transferred from one card to another within your profile and between spouses, but not between unrelated parties. So if you have a Freedom card and an Ink Bold, you can easily transfer points from the Freedom to the Ink Bold to redeem them for any travel at the rate of 1.25 cents per point.

In my experience, this is the best way to earn a free rental car so long as you are comfortable relying on your personal auto insurance. To be sure, 1.25 cents per point is not the highest and best use of Ultimate Rewards points, but it can make sense for those who have earned their points in bonus categories of spending and for cardholders who are richer in points than in dollars. Since I wouldn’t purchase Ultimate Rewards points for 1.25 cents each, it makes sense for me to utilize them for car rentals to minimize my out-of-pocket costs for reward travel.

Starwood Preferred Guest: Holders of the Starwood Preferred Guest card from American Express can use their Starpoints for rental car rewards. A $50 off coupon from Avis or Sixt is available for 3,500 points. This value of 1.4 cents per point is probably not the best use of Starpoints compared to mileage transfers and hotel redemptions, but it can make sense for those in the enviable position of having more Starpoints than needed for other awards.

Citi ThankYou points: Like the Ultimate Rewards program, most cardholders will be able to pay for car rentals at a rate of 1 cent per point, but ThankYou Premier cardholders do even better at 1.33 cents per point. Citi appears to use the same travel provider that Chase does, which excludes one way rentals. Nevertheless, Citi cards do not have as many spending bonus programs, with the exception of the Citi Forward card which earns five points per dollar spent at restaurants as well as some bonuses for opening retail banking accounts.

US Bank Flexperks, Capital One Miles, Discover Miles, and other credit cards with fixed-value travel reimbursement programs: Each of these programs allows cardholders to redeem points for 1 cent each as a statement credit towards any travel expense, including car rentals. Since some of these programs offer double points/miles for purchases, you can receive a reasonable two cents in value per dollar spent. And since you are only claiming the expense after the rental period concludes, you can still take advantage of your credit card’s insurance benefits.

Using Airline Miles for Rental Car Awards

A few airlines in the United States currently offer rental car rewards.

American Car Rental

American: Rental car awards are available from various agencies. AAdvantage points seem to have .5-.75 cents in value for most redemptions.

Delta: Delta claims to offer car rental awards at its SkyMiles Marketplace which is only accessible to Diamond, Platinum, and Gold Medallion Members & Delta SkyMiles credit cardholders.  I was able to find rental car offers that appeared to return between .5 and .75 cents per SkyMile.

Frontier: Allows rental car redemptions from their Rapid Rewards program. A day with Avis is 7,500 miles. Hertz offers a full-size car for three weekend days for 15,000 miles, and a weekly rental for 40,000 (excluding New York Tri-State Metropolitan area, Alaska or Hawaii). National offers a mid-size for two days at 10,000 miles and 35,000 per week (excluding Manhattan). Since you can top off your Frontier account using Membership Rewards points, the Hertz and National options can make sense if you are paying more than $50 per day for the equivalent rental. It is also a great way to dispose of unused Frontier miles.

Hawaiian: Hawaiian Airlines offers gift certificates from Alamo and National at the poor rate of .5 cents per mile, starting at 10,000 miles for a $50 certificate.

United:  Car rental awards were once offered to Premier members and holders of their co-branded credit cards like the United Explorer. Previous reports showed that rentals started at 10,000 per day. I was able to find cars that returned a value of approximately .5 to .75 cents per mile, in line with the Delta SkyMiles Marketplace.

Airtran, Alaska, JetBlue, Spirit, Southwest, US Airways, and Virgin America allhave no way to redeem their points and miles for rental car awards at this time.

INSURANCE ISSUES

American Express Car Rental Protection

American Express Car Rental Protection

Most savvy renters rely on their credit card to offer rental car insurance. But what few people realize is that the rental must be paid with their credit card in order to be covered. Therefore, cars rented with awards are not covered by your credit card, even if you use it to guarantee the rental or to pay taxes and fees. This is also true of American Express’s optional Premium Rental Car Insurance policy, so do not expect it to cover award rentals.

This leaves renters two options: First, they can purchase insurance from their rental car company. Sadly, these policies offer terrible value and can even be more expensive than the base rate of the rental itself. Your other option is to rely on an insurance policy you have purchased for your personal vehicle as these policies may cover damage to rental cars. Unfortunately, they are unlikely to cover rentals outside of the United States. My State Farm agent told me that I was covered for all rentals in the United States so long as the vehicle had “four wheels and two axels.” Be sure to check with your insurance company and get a written copy of the policy and any exclusions.

Conclusions

Among rental car programs Avis is the only one with a sign-up bonus and a special offer for the first 90 days. Despite its apparent sophistication, the Hertz program ends up conferring similar values to other programs that feature 1 free day per 15-16 rental days. However, the Hertz program can be attractive to those who earn 5% cash back through the American Express OPEN program by renting cars with cards such as the Premier Rewards Gold, the Starwood Business card, the SimplyCash Business card, or any of their 13 different business cards that are part of the OPEN savings program. Finally, National’s program would work best for people who rent frequently and for shorter periods of time since credits are earned per rental, not per day.

With credit card programs, Chase’s Ultimate Rewards is the leader due to the ease of earning multiple points per dollar with many of their cards. Citi’s similar ThankYou point redemption program offers slightly more value per point, but their points are harder to accrue at favorable rates. Finally, renting a car using airline miles tends to be a low-value option compared with most flight awards, with the possible exception of Frontier’s Rapid Rewards program.

Earning a rental car award will never offer as much value as free hotel night in a luxury hotel or an international business class ticket, but it is the best way to reduce the cost of your travel once already have your flights and hotels covered.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • JakePB

    Alamo has its Alamo Insiders Program, although like most it’s very uninspired…

  • mw

    The redemption rate for UR pts is 1.20 not 1.25

  • http://twitter.com/Boilertony Tony Dale

    If you wreck a rental car, car rental companies try to tack on a loss of use and administrative fee, something that is NOT usually covered by your insurance. Their loss of use is bogus because they are required to prove that because that vehicle wasn’t useable during repairs they had NO other vehicles to rent and lost money as a result. If your insurance company disputes any of their charges, they simply send it to a collection agency against the person who rented it, and your insurance company can’t do anything about it.
    –10 years of experience as a claims adjuster.

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  • http://twitter.com/ColinMcHale Colin McHale

    I find it crazy that I can be an Avis President’s Club member (via the UA Club Card), but not receive any benefits of the Avis First program until I rent 35 days. Additionally, their customer service department is unable to tell customers how many days they have rented in a year, and only have access to 6 months of data, so you never know where you stand. Multiple customer service inquiries, and a month later, and still no idea if I made the 35 rental days or not for 2012 (it’s going to be close).

  • Jason Steele

    Your personal auto insurer may offer loss of use coverage. State farm does, but charges you for it.

  • Jeff4444jo

    2 things – any comments guys? 1st – I thought that Chase Ink cards have full insurance when you use their cards to rent a car? 2nd – When you use United Miles to get a car rental (or hotel for that matter), you can cancel and simply have points put back in yoru account. Very good. With American Airline miles, if you cancel a rental car made with points, you have a $150 fee – or even try and change it. Very bad.

  • Jason Steele

    Per Chase SP: “Get 20% off airfare, hotels, car rentals and cruises when you redeem through Ultimate Rewards. For example, a $500 flight requires just 40,000 points. ” Seems like 1:1.25

  • Jason Steele

    Since I wrote this up, I had a successful experience renting from Budget w/ UR points, and turning it into a one-way (FLL-MIA) when I picked up the car. YMMV of course.

  • IAD-Addict

    If I book the rental car through Hotwire for example, will the rental company still give me points/credit for the rental, or do I have to go through their site?

  • Andrew

    I guess I’m confused. The title says “maximing car rentals for free days.” You didn’t offer any insight to maximizing rentals. Instead, you gave a rundown of each car rentals loyalty program that anyone could of found online. I definitely haven’t learned anything from this post that I didn’t ready know- in other words there was no insight provides to maximize points – perhaps because there’s not a great way to go about this- just seems like a waste of an article

  • thrylos98

    Well… Someone needs to do some math to see how valuable are free rentals vs. miles.

    Case in point: I rent exclusively from Dollar (and I belong to Dollar Express for the convenience to have a car waiting for me and bypassing the counter.) My rentals (and I have to check for lower rates pretty much on a daily basis) have been on the $12-14 range per day before taxes and other charges. And there is usually a car at least 2 levels above economy waiting for me.

    So a free day of rental after 16 is the benefit of $20? I got my rentals going to United and I get 50 miles a day, plus a double bonus these days so 150 UA miles for $15 Dollar spend or so. That times 16 is 2400 miles. Would anyone chose $15-20 (with taxes) worth or a day of a car rental over 2400 miles?

    Just saying…

  • Eric

    I have had great success using my National free days for one-way rentals that would otherwise be very expensive. Last month I missed a connection and flew into an alternate airport, knowing I had the freebie car waiting to drive home.

  • Jason Steele

    As is often the case in journalism, the title is composed by someone other than the author. I would title it, “Using points and miles to earn free car rentals” sorry for the confusion

  • Jason Steele

    You are partially correct. Most, but not all Chase cards, include CDW, but with all credit cards, the coverage is only valid when the card is used to pay for the entire rental cost (not just taxes and fees). So using UR points does not include coverage. I rely on my personal car insurance when renting domestically using UR points, and must buy additional coverage if I were to rent outside of the US, which isn’t usually worth it.

  • Jason Steele

    Yeah, these programs are quite primitive compared to airline and hotel loyalty programs.

  • AC

    So we come to this site… And we aren’t sure where the info is coming from? So somebody provides the Title and you do the work in the article despite the disconnect? Are you serious? At least when TPG publishes the stuff he defends it – you blame it on someone else… Wow Jason…. That’s pretty weak. Weak excuse. Weak Article, at best.

  • AC

    Is the math a juggernaut for you MW? You must of missed math in 7th grade.

  • Dave G

    In my experience, using airline miles (e.g. American AAdvantage miles) towards car rental does not cover taxes and fees, so it wasn’t a good value.

  • Josh

    This is a very incomplete overview of the Hertz program. Hertz frequently offers 2x or 3x points (Hertz has run a 3x promo since beginning of 4Q12 through Jan 31, 31). I racked up the equivalent of 3 free weekend rental days on probably 5 or 6 rentals in the fourth quarter. Not bad. In addition, if you have 10+ rentals (Five Star Club) in a year you get a 15% bonus on points and an additional 500 points (free weekend day) for every 15 rentals. Bonus is even greater at 40 rentals as you would be in President’s Club.

    Also, since I usually only have 1 or 2 days rentals, I find the Cap One Venture card a good way to get these for free and getting a 2% return on my spend.

  • Michael

    I really liked the article and it was just what I was looking for! It saved me HOURS of web searching! Thank you Jason! I’m sorry there are so many negative comments…

  • Traveller

    Can anyone advise on a strategy of crediting these points to airline miles, similar to the mention of UA? Other experiences?

  • Charles Clarke

    If you have USAA insurance and use the USAA discount codes(probably not valid with the free days), loss of use is covered for free.

  • http://www.CheersandGears.com Oldsmoboi

    You can use your National Emerald club number with Enterprise and get credits toward status and free days. I use National primarily with Enterprise as my backup in this fashion.

  • EssEss

    This is a very useful summary. It’s also a good reminder that the normal credit card car rental insurance does not apply when renting with points.

    However, I spoke with two agents about American Express’s optional Premium Rental Car Insurance policy, and they explicitly stated that rentals paid for with points are covered, as long as an enrolled Amex is used to pay the taxes (and of course, the additional $24.95 per rental). Can you please confirm or refute this?

  • danceflosstravel

    Well this is MUCH more the information I was seeking from this article. Agreed – who cares about a $15 or even $30 free rental, when you could get 2400 miles instead. I liked the idea of the article, but at the end of the day I am just looking at the best possible way to maximize points/dollar.

  • SarahSC

    I have just confirmed with a benefits coordinator at Chase Sapphire that the rental I reserved using Ultimate Rewards points is in fact covered by the existing Visa Signature rental car coverage because the points are associated with that credit card. There is no need to purchase additional insurance if you use Ultimate Rewards points associated with the Chase Sapphire card. As I carry liability-only insurance on my personal vehicles, this is a critical feature of using the UR points for rentals. Of course you must adhere to the T&Cs just as if you’d rented the car with the card itself.

  • alaskanjackal

    Don’t forget you’re paying a buck a day ($0.95) extra to earn UA miles with Dollar. So those 2,400 miles cost you an extra $15.20. You can buy 2,400 miles directly from UA for $50ish. So, the question really is, are the United miles worth spending the extra $15, and is the free day you’d otherwise earn worth the delta between $50 and $15 ($35)? Given that it’s pretty easy to be stuck in a market with $50+ rates that the free day also works on, I’d take the free day and save the $15.20 extra out-of-pocket expense (I’m not *that* desperate for UA miles) and put it towards a mileage run.

  • alaskanjackal

    As Jason mentioned, this is standard practice in the journalism industry. A reporter files a story, which a copyeditor then reviews and queues for submission. Another editor is often given the task of writing the headline. Reporters almost never have input into headline writing.

  • alaskanjackal

    One factor to consider when redeeming miles/points for a rental: don’t look at the retail rate when calculating the value–look at the best discounted rate you can find. Sure, it might sound good to redeem 10,000 miles for a $75 one-day rental with Hertz, but a few minutes of dead hung for a discount code can easily knock that down to $40. Now your miles have been devalued from 0.7 cents per mile to 0.4 cents per mile.

    Using miles is almost never a good deal unless you’ve absolutely exhausted every other option.

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  • tom

    Airtran, Alaska, JetBlue, Spirit, Southwest, US Airways, and Virgin America allhave no way to redeem their points and miles for rental car awards at this time.

    Car rentals for Southwest can be made through their “More Rewards” page for points.

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