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Guide to Maximizing Bonus Categories — Rental Cars

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Every purchase is an opportunity to earn travel rewards, and to boost your loyalty account balances, it’s important to maximize your return on each dollar. Today, TPG Contributor Richard Kerr explains how you can rack up points and miles with rental cars, but also points out why other considerations should come first.

In the world of award travel, rental cars often play third fiddle to flights and hotels. However, there are plenty of rewards to be earned and options for redeeming. In this post, I’ll continue my series of maximizing bonus categories by showing you strategies to get the most from your next rental car, with an added focus on finding the lowest prices.

Make sure when renting overseas that your insurance is valid wherever you’re traveling. Image courtesy of Shutterstock.

General Tips for Saving on Rental Cars

1. Whether you’re covered by a credit card or paying for added coverage from the rental agency, make sure you’re properly insured. Credit cards do not provide liability insurance, so make sure your personal policy extends to rentals or else purchase appropriate coverage on the side.

2. Laws about rental car insurance vary internationally, and some countries are excluded completely from policies. Rare and luxury car models may also be excluded from policies. Do your research beforehand and know exactly what you’re entitled to in case things go wrong.

3. Avoid returning your car late or without a full tank of gas. Late return penalties can be stiff, like Budget’s policy of charging you for a full day after you’re 90 minutes late. If you didn’t pre-purchase your gas when renting the car (which I don’t recommend), expect the rental company to charge you an exorbitant amount to top off the tank.

4. Don’t rent more car than you need. Aside from the fact that larger cars cost more to rent, getting a Chevrolet Tahoe or Cadillac Escalade out of the rental car garage at an airport isn’t always easy. An unintended encounter with a parking garage pole will make the decision to go big even more painful.

The Sapphire Preferred is my rental car payment card every time.
With primary insurance and bonus points for travel expenses, I use my Sapphire Preferred card to pay for rental cars every time.

Credit Card Strategies

Unlike the other guides to maximizing bonus categories that I’ve written recently, your credit card strategy for rental cars should be to first use a card that provides adequate insurance, and then focus on how to earn the most points or miles. Naturally, the best option is a card that provides both primary insurance and bonus points, but insurance should be the priority.

If it sounds like I’m harping on the topic of insurance, it’s to help you avoid the disastrous scenario of having to replace an entire car out of pocket (in addition to any other fees or liability claims). Primary insurance from a credit card can help protect you from at least some of that damage, and allows you to avoid filing a claim with your personal insurance company in the case of a fender bender (or worse).

I always pay for my rental cars with my Chase Sapphire Preferred Card. Last year, Chase upgraded the insurance on this card from secondary to primary coverage, and Sapphire Preferred earns 2 points per dollar on travel (including rental cars). Bonus points plus primary coverage makes the decision easy (assuming your rental is applicable).

For other options, check out TPG’s post on cards that offer primary rental insurance.

Somehow I always feel like the rental car companies have gotten the best of me at the counter. Photo courtesy of Shutterstock.
Somehow I always feel like the rental car companies have gotten the best of me at the counter. Photo courtesy of Shutterstock.

How to Maximize Earnings from Rentals

Since a rewards credit card won’t necessarily be your focus for earning points and miles on rentals, let’s look at other options. TPG Senior Points & Miles Contributor Jason Steele wrote a synopsis of car rental loyalty programs, but unfortunately they’re pretty uninspiring compared to hotel and airline programs. None of them make it particularly easy to earn free rentals, and in my experience, their IT systems are lacking (I’ve had to email, call, and submit receipts more often than I’d like to get my points and credits).

Instead of collecting points in a rental car program, I look for ways to earn bonus frequent flyer miles or hotel points. Rental companies typically offer weak earning rates for partner programs (e.g., 1 mile per dollar or 50 miles per day), which might get you a free flight after a few years of renting. However, you can often find coupon codes that boost your earning significantly (like 6 AAdvantage miles per dollar and 35% off with Hertz).

Easiest Ways to Earn Free Rentals

While you can earn free days with car rental loyalty programs, I think your easiest path to earning award rentals is to use points that you can redeem for general travel expenses. Of course, these redemptions should count as paid rentals, so you’ll still earn rewards with the rental agency. Here are some loyalty currencies you can redeem to cover your costs.

Chase Ultimate Rewards — You can redeem points earned from the Ink Cash Business Card or Chase Freedom Card for statement credits at a rate of 1 cent apiece, while points earned with the Sapphire Preferred and Ink Plus Business Card can be redeemed for 1.25 cents apiece. Points can be instantly transferred from one card to another within your Ultimate Rewards portfolio and between spouses, but not between unrelated parties. That means if you have both the Freedom card and the Ink Plus, you can easily transfer points from Freedom to Ink Plus to redeem them for any travel at the higher rate.

To be sure, 1.25 cents per point is not the best use of Ultimate Rewards, but it can make sense for cardholders who just want to minimize out-of-pocket costs and would rather use points than cash.

Chase Ultimate rewards produces cheap rates and lets me redeem my URs for 1.25 cents/point.
Chase Ultimate Rewards offers cheap rates and lets me redeem my points at 1.25 cents apiece.

Citi ThankYou Points — Like with Ultimate Rewards, most cardholders will be able to pay for car rentals at a rate of 1 cent per point. However, Citi ThankYou Premier cardholders can redeem at 1.25 cents per point, and Citi Prestige cardholders can redeem at 1.33 cents per point. Ultimate Rewards are more valuable than ThankYou Rewards, so you’re sacrificing less value when you redeem ThankYou Points at these rates (instead of transferring to airline and hotel partners). 

Other credit card options — Cards like the Barclaycard Arrival Plus World Elite MasterCard and the Capital One Venture Rewards Credit Card allow you to redeem your points at a rate of 1 cent apiece for statement credits to cover the cost of rentals and other travel expenses. While Barclaycard recently announced plans to reduce its award rebate from 10% to 5%, it still has a leg up over the Capital One program.

Keep in mind that the rental insurance offered by your credit card won’t apply when you pay with Ultimate Rewards or ThankYou Points, so these aren’t good options if you’re not covered by personal auto insurance and you don’t want to pay for the rental agency’s collision damage waiver. Also note that you can’t book one-way rentals with these two programs. The Arrival Plus and Venture Rewards cards only offer a secondary collision damage waiver (CDW), but you can still take advantage of it for award redemptions since you only redeem points after the rental is complete.

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AutoSlash is a convenient and effective tool to save on car rentals.

Finding the Lowest Price

Your best friend in paying the cheapest rental car rate is Simply enter a reservation you made with a rental car company, and the website will automatically search for lower rates for your rental until the day you pick up your car. If AutoSlash finds a lower price, you’ll receive an email confirming that you’d like to be automatically rebooked. It’s a pretty simple process, though you’ll need to keep track of emails to know which company and reservation number is correct.

When searching on the open market for cheap rates, I’ve found Costco Travel and Chase Ultimate Rewards Travel to have competitive prices. I also usually check the car rental threads on Flyertalk, where you’ll find an array of coupon codes. These threads have saved me cold hard cash in the past. When possible, avoid one-way rentals and picking up from airport locations, since those are the most expensive options.

Other Considerations

My strategy for rental cars focuses on having primary insurance coverage through my credit card, paying the lowest price and looking for a bonus coupon code to earn a few thousand bonus miles. Many times the bonus coupons are tied to specific rates, so do the math to see whether the bonus miles you earn are worth paying extra compared to the lowest available rate.

One important question to ask yourself is whether a rental car is really necessary. Many destinations offer comprehensive public transportation, and between Uber, Lyft and other ride apps, there are plenty of alternatives. You should weigh the flexibility of having a rental car at your disposal against the added costs (like fuel and parking) and responsibility. If you decide renting is the best option, I hope these tips will help make it a more affordable one!

How do you get the most out of your car rentals?

Chase Sapphire Preferred® Card

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  • Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
  • Named a 'Best Credit Card' for Travel Rewards by MONEY Magazine
  • 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
  • Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening
  • No foreign transaction fees
  • 1:1 point transfer to leading airline and hotel loyalty programs
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
  • No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards
Intro APR Regular APR Annual Fee Foreign Transaction Fee Credit Rating
N/A 16.24%-23.24% Variable Introductory Annual Fee of $0 the first year, then $95 0% Excellent Credit