Saving Money with Car Rentals for Young Adults

Owning a car for young adults is expensive. Besides the cost of the car and maintenance, insurance companies charges ridiculous rates to get coverage. If you live in a city and only need a car a couple times a month, car rentals could be more cost effective than owning a car. Below is my analysis of Hertz and Zipcar, the 2 big names in the car rental industry:


One of the biggest secrets is that Hertz allows anyone to rent car as long as you are 18 or older, provided that you are an USAA member. Everyone can become an USAA member and enjoy most benefits, except for loans and insurance.

Hertz frequently has weekend rates for around $15-20/day. Weekend starts at 12PM on Thursday and usually ends on next Monday at noon (sometimes at midnight). If you don't have insurance like me, any credit card with rental benefits will cover the car (since you don't have insurance, secondary coverage automatically becomes your primary). American Express, as usual, is the easiest one to deal with when it comes to card benefits. However, you do have to pay for liability coverage, which is around $14/day, which bring the total cost with taxes to $40/day.


Zipcar makes car rental much more user-friendly. The rate includes insurance and gas (!), they have cars all over the cities and their website is easy to use. However, Zipcar is great only if you need a car in less than 5 hours, otherwise Hertz is a much better deal. Their rates start at $8.25/hour or $69/day, not including tax. In reality, you usually have to pay more because the $8.25 cars are usually not available. Also, be aware that there's a limit of 180 miles/day (with a hefty $0.40/mile surcharge) and there's an annual fee of $60 unless you choose one of the $19.99 or $50 monthly plan. Another disadvantage of Zipcar is that they don't have a loyalty program. Not that Hertz elite status worth anything, but at least you can earn points for free rentals.

Minimum age requirement for Zipcar is 21+. If you sign up through your college/university, the limit is 18+ with some restrictions.

(My referral link will give you $25 to get started. Feel free to share your own link under the comment section)

Why Car Rental Makes Sense

For a $2000/year budget, you could have around 100 days of car rental. With the cost average of $1,200/year in maintenance and $2000/year for insurance, car rentals make a lot of sense for young adults under 25 years old and live in a city. Moreover, you don’t have to worry about maintenance and parking. You can also pick up a car anywhere you want so it makes moving much easier.

So the next time you think about buying a car, don't forget to give car rental a chance. It could save you some serious money and headaches.


James November 30, 2012 at 02:15 pm

The Hertz USAA discount saved me numerous times as it waives the underage fee (which is a nice $25/day savings!)

What I did though, was get the supplemental rental car insurance from American Express whereby anytime AmEx picked up a charge from a major rental car company on my card, they'd automatically add the $21.95 supplemental charge to my card. It acts as primary insurance without then need to take on any sort of insurance through the rental car facility. What I would also do was pick up the car using the American Express, and if all went smoothly, upon returning the car, would swap out the card used for the rental to another one, thus saving me the AmEx supplemental charge. So I'd be 'covered' during the rental, without having to actually pay the fee from Amex in the end.

Thankfully I don't have to do that anymore since I just turned 25 last week!

rocky December 1, 2012 at 01:00 pm

Don't forget about car2go. Its a lot like zipcar but you can pick the car off and drop it off ANYWHERE within the car2go zone. I know they are in San Diego, Austin, Vancouver, BC; Toronto, Portland, Miami, Vienna, London, Berlin, stuttgart, Amsterdam, Washington d.c., Cologne, etc.

rob January 21, 2013 at 12:12 am

A better deal than the Amex one is to get a United Explorer (or Club) card - they act as primary insurance on rental cars. I just had a rental car blow a tire after hitting road debris and the Visa insurance is covering it with no deductible, no cost to me, and no reports to my insurance company. And, unlike the Amex deal, there is no extra charge for it.