The Ultimate Guide to Renting a Car in Europe

“What are your tips for renting a car in Europe?” is the question I’m most asked in recent times. “Is it a costly affair?” “Is it safe to rent a car abroad?” Questions abound. And that’s why I’m writing this post to let your doubts about car rental in Europe melt away.

Europe, the second smallest continent lets you tick many countries off your list in just one trip.

Annnnnnd lets you add more stamps on your passport.

With several countries in close proximity that grant easy cross-border travel, Europe is made for a quintessential car journey.

Having a car not only provides the freedom and ease of travel but also saves the hassle.

The best way to get around Europe is in a rental car more so if you are traveling with a family or group as it provides a good value for money.

You can take the road less taken where public transport can’t reach. You can stop wherever you want. You can click as many Instagram worthy pictures as you want.

Drive the beautiful roads in Sweden by renting a car in Europe
A scenic road trip through the Swedish countryside

Plus you can’t really count on the unpredictable and erratic timings of public transportation when you’ve got limited vacation time.

Did you get my point?

We have traveled to around 15 countries in Europe all by a rental car. Though Europe has a good rail network but nothing matches the thrill and joy of a road trip across mesmerizing Europe.

Related Read

Complete Guide to Schengen Visa for Europe

What do I Need to Know When Renting a Car in Europe?

The whole process of car renting creates a lot of confusion and misconception among travelers. It can be a pain for the first-timers largely non-EU travelers.

There are things that you must know before hiring a car in Europe to avoid any mishaps later on.

After gaining a substantial experience of renting a car in Europe and being hit by not bargained for overcharges on a few instances, I decided to write down this guide to hiring a rental car in Europe that can help you avoid the scams, unexpected shocks, and pitfalls and have a hassle-free and wallet-friendly travel experience.

Let’s get down to brass tacks, shall we?

Here are things to keep in mind before you rent a car in Europe:

1. Choosing a Car Rental Company

Which car rental company is the best in Europe?

It’s less about the best car rental company and more about the best car rental deal for you.

If a company and a deal fit the bill, it’s best for you!

Hertz, Avis, Europcar, Sixt, Budget, Alamo, and Enterprise are the major multinational car rental companies that give you a chance to visit most of the countries across Europe in one trip.

There are local car rental companies too that offer cheap car rentals but have limited services like they have operations in a country where they are based or two. They can be a good option if you want to travel to a particular European nation.

Our Sixt Rental Car in Vienna Austria
Our Sixt rental car in Austria

We have had experience with Europcar, Avis, Hertz, and Sixt in Europe. By far, our experience with Europcar has been the best.

A hint

Good things come with a price.

Where do you start?

Start by comparing the rates for the major car rental firms to look for the best deal for you.

Research goes a long way, mind it.

If the idea of evaluating the price levels for various companies individually baffles you, try using price-comparison websites like Skyscanner or Auto Europe. or


Don't get tricked by the low rental quotes as they most likely have additional costs or fewer features. 

Please check the deal carefully.

2. Ask Away Your Doubts

Before you finalize on the best deal for you, make yourself aware of a couple of things.

Read the Frequently Asked Questions section on the rental company’s website. That should answer most of your queries.

In case you’ve confusion, call the customer care to understand the rental rules and policies.

What do you ask?

  • Does the price include everything? Are there any hidden costs or extras?

Your basic rental car price almost always includes everything – basic insurance coverage (third-party or public liability insurance), taxes, airport surcharge, and unlimited miles.

An inclusive rental car price includes – basic insurance (public liability insurance), taxes, airport surcharge, unlimited miles, plus CDW (collision damage waiver) and theft protection.

Know about the costs hidden in the fine print already.

  • What will be the total amount held on my credit card?

Car rental companies hold a security deposit on your credit card. Deposits are refundable. They release the hold minus applicable extra charges (if any) once you return the car.

  • Know about the fuel policy.

By and large, the car is given with a full tank of fuel and must be returned full.

  • Know about the cancellation policy.

The cancellation is free if made at least 48 hours before your pick-up time and date. This holds true for almost all car hire firms.

Driving Grossglockner High Alpine Road in Austria by a Rental Car
Grossglockner High Alpine Road, One of the most beautiful road trips we’ve ever taken!

3. Cost of Renting a Car in Europe

There are certain factors to keep in mind that largely determine the prices for the rental car. You should know the factors that add to your rental car price.

  • Category of Car

Of course, the category of the car (small, mid-size, large, SUV or premium) you choose primarily controls the rental price.

We normally prefer small and fuel-efficient car until and unless we are planning to drive in rugged or hilly areas.

  • Different Pick-up and Drop-off Destinations

The idea of choosing the different pick-up and drop-off locations might sound relevant and easy but it’s not at all easy on the pocket.

Try to keep your pick-up and drop-off locations the same.

The different locations within the country are still fine (costs you a little or nothing) but if you select a pick-up location in one country and drop-off location in another country, the huge additional fee is charged.

We had to change our entire one-way itinerary of renting a car in Austria and returning it in Italy to round-trip itinerary (starting and ending in Austria).

Always weigh the pros and cons while choosing different pick-up and drop-off locations as it costs much higher than expected.

  • Cross-Border Fee

Most of the car rental companies charge a cross border fees for driving between Central or Western Europe to Eastern Europe or non-EU countries.

  • Additional Driver

Adding a second driver might cost you extra. There are regular deals that allow you to add a second driver at no extra cost.

Look for those if you must add a second driver.

  • Age

Young drivers (under 25) add to the cost. The same goes for the drivers over 70.

  • Manual vs Automatic Transmission

Automatic cars cost higher than the manual ones. Also renting an automatic transmission car is difficult to come by in Europe.

  • Debit Card vs Credit Card

Using a debit card over a credit card while renting a car means the extra authorization charges. In fact, some rental companies don’t accept debit cards at all.

Always keep a credit card or two actually. The backup credit card comes handy in situations where the first one isn’t working.

It happens a lot. Believe you me.

  • Airport Pick-up vs Off-Airport Pick-up

The ease of renting a car directly from the airport comes with extra airport taxes or surcharges that can be done away with.

For instance, you can catch a train from the airport and pick a car from the city center. This way you can save on the airport surcharges.

We end up picking a car from the airport though (easier to preach than practice?) as it always comes handy in terms of availability of cars (if not booked in advance), and anytime pick-up and drop-off facility.

  • GPS

GPS unit might come automatically equipped in your rental car or it might not.

If it doesn’t come with your car, you need to rent one separately which can be ridiculously expensive.

I know, it’s impossible to drive in a new country without having any idea about where you are heading to.

Using your smartphone is a smart option in that case but don’t forget to check the blueprint with your telecom partner.

  • Rental Duration

The length of the trip can save you some euros. The more the rental period the lesser the cost and vice-versa.

  • Child Seat

Carry a child seat if required. Rental car companies cost around 10 euros per day. Read this to know EU car seat laws.

  • Pick-Up Time vs Drop-Off Time

Pick and return your car on time. They are mentioned in the rental contract.

You could have to pay another full day’s rental if you return out of grace period if any.

Ask for the buffer period to your rental agent beforehand.

Early return like the late return is also subject to an extra charge in some cases.

Also, choose pick-up and drop-off timings cautiously as you might unknowingly be paying a full-day rental just for few extra hours. Rental car rates are based on a 24-hour clock.

  • Car Rental Tax

VAT taxes (15% to 30%) and local rental car taxes (1 euro to 5 euros per day) that include vehicle license fee, road tax, environmental fee or eco surcharge, credit card processing fee, road safety fee are included in your car rental quote.

There’s no way you can avoid these taxes.

  • Miscellaneous

Other common factors that add to the rental cost include Fuel, Parking, and Tolls.

Oresund Bridge from Copenhagen in Denmark to Malmo in Sweden
Øresund or Öresund Bridge between Sweden and Denmark
Take a thrilling Snow-covered Grossglockner High Alpine Road in Austria by renting a car in Europe
Another stellar pic from the Grossglockner!

4. Rental Car Insurance

Do you need to buy rental car insurance?

This one’s tricky.

Be assured, your car rental agent will reel off the list of the atrocious possible repercussion of refusing the extra coverage.

Been there done that.

We paid for the extra insurance cover or rather for peace of mind to our car rental company.

Rental car insurance costs anywhere around 30 euros to 35 euros a day. Ridiculously expensive!

Most of the times, it comes to be more than the actual rental price.

Before you buy the rental car insurance, please check if you’re already covered by your own auto insurance or your credit card issuer.

And before you check that, be aware of the common car rental coverage acronyms:

  • Loss Damage Waiver (LDW) or Collision Damage Waiver (CDW)
  • Supplemental Liability Insurance (SLI)
  • Personal Accident Insurance (PAI)
  • Personal Effects Coverage

The Four Types of Rental Car Insurance, Explained.

Now check if and how much you are covered so you don’t end up paying extra for the crazily overpriced insurance by the car rental company.

Don’t assume. Assumptions are dangerous. Talk. Get clear information.

Talk to your car insurance company to make sure if they cover your rentals abroad. Ask them if the coverage extends or can be extended to rental cars based on the coverage offered by your car insurance policy.

If they offer complete liability coverage plus comprehensive and collision coverage then it’s safe to decline the SLI and CDW/LDW by the car rental company.

It’s worth checking your health insurance, home insurance, and travel insurance as well.

If you have the required health insurance, the rental company’s personal accident insurance is redundant.

You can happily refuse the personal effects coverage by your rental company if you already have home insurance that covers your belongings.

Check if your travel insurance covers the rental car collision damage. It’s the same as LDW by your car rental company.

All the major credit card companies in the USA and Canada – Visa, MasterCard, Discover, and American Express provide rental car insurance coverage as long as you have a good ranking.

The rental car coverage from your credit card comes with its own set of limitations though.

Talk to your credit card company to clear your doubts. Make an effort to know exactly what it covers and whatnot and understand the pros and cons.

Make the car reservation only using a credit card that offers car rental insurance to use the benefit.

You’ll also need a letter from your credit card issuer that explains the rental car insurance cover you have and the countries where the cover is valid.

Read this article about credit car rental insurance to know more. I found it extremely helpful.

Lastly, if you are unsure about if you have enough coverage or not; spending money on insurance cover actually could be a sensible move.

We can’t assume what’s ahead of us or what’s going to happen on the road, so sometimes it’s worth paying a few euros more and buy the peace of mind while vacationing.

As Franz Kafka said: “Better to have, and not need than to need, and not have.”

Did you catch my drift?

Swedish Countryside Kaseberga Village in Skane Scania
Driving on your own takes you to places like this: teeny-weeny charming hamlet, Kaseberga in Sweden

5. Road Tolls and Vignettes

A good number of roads (motorways or expressways), bridges, and tunnels are subject to a charge in Europe.

It’s mandatory to buy vignettes (a pre-paid road tax stickers to be affixed on car’s windscreen) that indicate you have paid the toll or highway tax in many European countries.

You don’t need a vignette if you are just driving the secondary roads. Like, we didn’t need one during our day trip to Bratislava from Vienna since our GPS completely skipped Slovak tolled highway.

We rented a car in Austria, so the vignettes for Austria and Germany were already included by our rental company. They asked us to purchase the vignettes for the rest of the countries on our list.

You can buy the highway vignettes at the specific gas stations.

Buy one at the gas station close to the entry point into the country. The vignettes can be purchased for a period of 7 days, 10 days, 3 months or even a year. A 10-day vignette costs somewhere around 15 euros.

The countries that require vignettes are Austria, Bulgaria, Czech Republic, Hungary, Moldova, Latvia, Romania, Slovakia, Slovenia, and Switzerland.

Some like Austria, Hungary have electronic vignettes (e-vignettes) and some countries like Slovenia have a classic sticker vignette.

There are other countries that don’t ask you to buy vignette but have highway tolls that are paid as per the distance traveled on the toll road. You can pay by card or cash. Croatia has a mix of automatic toll (cashless) and toll-booths (cash or card).

The list of countries that have toll roads includes Belarus, Croatia, Bosnia and Herzegovina, France, Ireland, Greece, Italy, Macedonia, Norway, Poland, Russia, Portugal, Serbia, Spain, Turkey, and the UK.

I found the highway tolls system rather costly than buying a vignette.

In Sweden, Denmark, Netherlands, and Andorra just the specific tunnels and bridges carry a toll.

Please make sure to check the road rules for the countries you are planning to visit. Do keep your eye on the signboards about vignettes at motorways.

If you are caught driving the motorways without vignette, you have to pay a fine which is 10 to 20 times higher than the price of the vignette.


If you don’t pay heed you’d be bankrupt. Sigh!

On our road trip to Europe, we forgot to buy a vignette before entering Slovenia (unpardonable mistake of course).

I mean, how could we?

As we entered the border checkpoint, a young lady officer waved us to exit the line into the lay-by. After taking our passports and rental car documents, she asked us to pay 300 euros fine for driving the Slovenian roads without vignette otherwise she threatened to confiscate our documents.

She was generous enough to lower the fine to 150 euros looking at our sorry faces.

Sorry Faces after being fined by Slovenian Road Tax Officer

Lesson learned. A costly one!

A hint

The people who learn from other's mistakes are smart 😉

6. Fueling Up the Rental Car

Fueling up and paying for the fuel is more or less similar in the European countries. Make a few things clear beforehand to avoid any confusion later.

Check with your rental car representative if your car takes petrol or diesel.

Now to select the right fuel at the petrol station, know the fuel types in Europe. Here’s a list of local names for fuel in Europe to get you going.

Unlike India, they have self-service petrol stations. Some countries in Europe have a prepay option where you first insert your card in a machine, key in the pin and then fill the required fuel as we did in Nordics.

Some have an option to refuel first and then pay at the filling station’s convenience store by quoting your pump number and pay by cash or card as we did in Eastern and Central Europe.

Midnight sun in Bergen Norway
Driving in Bergen, Norway while enjoying the beauty of the Midnight Sun

7. Urban Driving and Parking Rules

If you are planning to spend a lot of time in big cities like European capitals, then renting a car is not advisable.

Parking and traffic jams are real problems.

Finding parking that too for less or no cost is a task. So, avoid urban driving at all costs.

We left the rental car at our Airbnb and used public transport instead.

You can do it too. Easy-Peasy!

What about the scenarios where you can’t avoid but drive into the city? What do you do then?

First and foremost, pay attention to the parking laws.

Plan the city excursions on weekends. You ask why?

Because parking in most of the European cities is FREE on weekends and the traffic is also lesser.

Pure happiness and joy!

We planned our day-trips from one capital city to another like from Vienna to Bratislava on weekends. This saved us a huge amount of money and hassle.

Free parking in big cities in Europe that too on weekdays is a mission of sorts!

The moment when you finally get a free parking spot
That moment when you finally get a FREE parking spot 😉

There are street parking areas outside the center where you can park for free. Obviously, not as safe as garages or lots plus far away from the city.

A hint

Don't hassle around looking for free parking. Save time not money.

You can find a parking space on the streets, in parking garages, park & ride garages, and parking lots.

The street parking in the center aka short-stay parking zone is limited to 2 or 3 hours. The average cost of street parking is 3 euros an hour.

Expensive like hell. Plus of no use to people who are looking to spend an entire day exploring the city.

A hint

If you want to park for another 2 or 3 hours you'd have to return (wherever you are) after your parking time ends and pay for another ticket.

You can pay by the exact amount of change or card using parking pay machines. Don’t forget to display the receipt on your car’s dashboard.

Renting a car in Europe is not as difficult as finding a parking in European cities
Finding a parking spot in European cities is tough!

There also are free for limited-time spots. If you find one, don’t forget to set your arrival time in a parking clock on your dashboard. The clock comes with rental cars. Mostly.

If not, consider buying one from any of the gas stations or tobacco shops in the city.

There are public and private parking garages (latter being costly) where you can freely leave your car for as long as you want, however, every hour adds.

In fact, adds a lot. You know what I mean.

The parking lots (open parking spaces) are also the option but cost more or less the same as parking garages (closed parking spaces).

Last but not least, you can safely leave your car at one of the P+R (Park & Ride) Garages at the outskirts of the city.

It’s super cheap as your P+R parking ticket costs anywhere between euros 2 to 3 and includes the parking fee plus a shuttle bus ride (roundtrip) to and from the city center.

Needless to say, P+R is the best option.

Check European Union’s Car Parking website for detailed information about where to park for a reasonable price. 

8. Driving Rules In Europe

Each country has its own set of driving quirks.

But there are some general rules that apply to all the European countries.

  • Almost all the countries in Europe drive on the right-hand side of the road with the driver’s seat on the left-hand except the UK, Ireland, Malta, and Cyprus.

The rule of thumb while driving is always staying to the right side unless you are overtaking a vehicle. You are supposed to leave the passing left lane as soon as you overtake.

As an Indian who’s accustomed to driving on the left-hand side of the road, we normally follow a defensive approach until we are accustomed to the change. You should too.

  • At roundabouts, traffic moves anticlockwise. Moving traffic always has the right of way whereas entering traffic gives way.

To take a correct exit on a roundabout has always been tricky for us 😉 On one occasion, taking a wrong exit had cost us a hell lot of time. Now, we prefer to go round and round until we figure out the right one with the help of navigator haha…

How to exit the roundabout in Europe
  • While most of the European nations use more or less similar signs and speed limits, it’s advisable to know the European Road Signs before you take on the roads. You can visit the country’s official website of the highway authority.
  • The speed limit for motorways varies between 100 to 130 km/hour. Primary roads mostly maintain the speed limit of 90 km/hour, secondary roads have around 50 km/hour and city roads have a 30 km/hour speed limit. Look for the speed limit signages.
  • You must also review the tram system and cycling laws as they normally have preference over car traffic.
  • Right turn on a red light is prohibited unless there’s a sign indicating otherwise.
  • Your car should be equipped with safety equipment.

Most countries in Europe expect you to carry a reflective safety vest (Austria does), red safety triangles, and/or a breathalyzer.

The car rental company provides these pieces of equipment for you. Make sure to check at the time of taking the car.

  • Kids (under the age of 12) aren’t allowed to sit in the front seat in some of the European countries.

We always make mini-me to sit in the back with a seat belt on for our road trips in Europe no matter what.

  • Like in the rest of the world, the seat belt is mandatory here too.
  • Check the drink driving law in the country you intend to visit. Don’t risk it as they have strict Blood Alcohol Content (BAC) drink driving limits.
  • You are not allowed to use your phone while driving.

Europe takes its rules and laws sternly, so should you. Abide by the laws to stay happy and safe on vacation.

Check the European Union’s website for more information on driving rules in Europe.

9. You Need Green Card to Enter Certain Countries in Europe

Green Card is an international cross-border motor insurance document that acts as proof of insurance to drive in Europe.

The Green Card System includes some but not all countries in Europe.

The car rental companies issue the Green Card with the reservation like when we were trying to hire a car in Croatia for Montenegro and BiH, the rental company was showing the Green Card in inclusions.

Roads in Montenegro
Montenegro it is! Photo by Damien Checoury on Unsplash (Edited by Travel Melodies)

10. Do You Need an International Driver’s Permit for Europe?

The rental car company asks for the rental car confirmation number, your passport, and driver’s license before allocating you a car.

There are chances that they ask for your IDP (International Driving Permit) issued by your home country.

An IDP is mandatory if the driver’s license issued by your country of residence isn’t in English or rather is in your country’s native language.

The countries with a native language other than English might ask for an IDP. The IDP imposition varies depending upon the car rental company and the country you are renting a car from.

An International Driving Permit is an additional travel document which basically translates your driving license to 10 different foreign languages.

We didn’t have one last year when we explored the Nordics in our rental car for a month or so and no one asks for one.

We got one this time after reading the driving rules in Austria that clearly mention that you need an IDP to drive in Austria.

Though no one asked for it including the car rental company. We were relaxed as we had it just in case, you know.

Driving like a King when you've got all the car papers
That Feeling When you’ve got all the car papers 😉

Getting an IDP is quite an easy process. Indians need to visit the local RTO (where the license was originally issued) with a valid Indian passport with a visa stamp, flight tickets, Indian driver’s license, local ID proof like Aadhar Card, 4 passport-sized photographs, duly filled and signed CMV 4-A form (it can be filled online), and a Medical Certificate and form (CMV 1 and CMV 1-A) signed by a registered medical practitioner.

Carry the originals plus photocopies of the documents. It costs around INR 500, takes a day or two to get one, and is valid for a year from the date of its issue.

Americans can apply for an IDP online or in-person through local AAA (American Automobile Association) or AATA (American Automobile Touring Alliance) office by filling a short application with basic information and paying a small fee of $20.

11. You are Not Allowed to Take the Rental Car into Certain European Countries

Yes! This came as a shock to us too.

We planned to explore Austria, Slovakia, Germany, Slovenia, Croatia, Montenegro, Bosnia, and Herzegovina and Hungary.

The plan was to rent a car in Austria and drive further down to Balkan countries and end our trip in Hungary.

The entire plan came to naught when our car rental company informed us about the policy stating we cannot enter Montenegro and Bosnia and Herzegovina with our rental car.

All the big multinational car rental companies have more or less the same rules and policies.

Our company, Sixt, allowed us to enter Croatia though there are some car companies that don’t even allow us to enter Croatia.

Driving the Islands in Croatia by a rental car
Driving on Croatian Island

By and large, the cross-border restriction applies when driving from Western to Eastern Europe.

Also, luxury car brands have more cross-border restrictions than mid-range or budget cars.

Please read the rental rules and policy documents of the car rental company to know the list of countries that are included and excluded in their insurance coverage before making the itinerary.

It hurts when the plan fails.

We ruled out Bosnia and Herzegovina. Excluding Montenegro was out of the question as the country was high on our bucket list so we booked a day trip to Montenegro with Viator.

12. Can you Carry the Rental Car on a ferry?

It makes sense to load your rental car on a ferry. The cost of taking our car on a ferry to Vis Island in Croatia was less than hiring a bike or car on the island to get around plus leaving our car in the garage in Split.

As far as I know, some of the premium car brands aren’t allowed to take on the ferry.

Jadrolinija Ferry Vis to Split in Croatia
Jadrolinija Ferry on Vis Island

Things to Keep in Mind to Reduce the Rental Car Cost

  • Book as far in advance as possible to save money.

The ideal and the cheapest time to book your car is 2 to 3 months in advance. Prices skyrocket as the availability of the cars drop.

Booking ahead isn’t a problem even when you are uncertain about your trip as most rental companies provide free cancellation. Check the cancellation policy and the time limit set to it.

  • Playing around with the pickup and dropoff timings and locations can fetch you a good deal.
  • Don’t give in to the pressure of the car rental staff.

When a car rental staff tries to pursue you to pay for extras like extra insurance cover, car breakdown cover and whatnot by making horror stories; decline politely if you are already covered.

They are not concerned about you but doing their job. Let them. Think twice before you shell out your hard-earned money.

  • Don’t forget to fill up the tank before you return the car. Otherwise, the fuel amount (more than the fuel cost) will be deducted from your deposit amount.
  • Keep an eye on your credit card statement to know if hold amount has been released and if yes, are the deductions valid.

I sincerely hope that this post helped you learn something about renting a car in Europe and if yes then please share it with the world and I’ll send some pixie dust your way.

Also, those of you who have rented a car in Europe, If I’ve missed any point about renting a car in Europe, let me know in the comments section to get it added to the post. Let’s help each other to travel the world more often and that too for cheap.

Need Ideas for your trip to Europe? Here are the ideas to get you started!

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