How to Rent a Car in Australia

How to Rent a Car in Australia

Your Step-by-Step Guide to Australia Car Rental

Person Holding Car Keys Next to Silver Car
Bryan Jacinto
PUBLISHED ONDecember 1, 2023
Sydney Opera House Waterside View
Source: Photo by Sean Bernstein on Unsplash

Australia, with its vast landscapes, vibrant cities and coastal drives, is best explored at your own pace. Renting a car could be your ticket to freedom and flexibility.

Maybe you're intrigued about the car rental scene and driving in Australia? Or worried about the costs involved? This guide will steer you down the right path for driving in Australia. You'll have all the information you need for a hassle-free car rental experience. It will, no doubt, intensify your desire to hit the road and soak up the wonders of Australia while driving through its stunning landscapes and vibrant cities.

Age Requirements

The baseline rule when renting a car in Australia is that you must be at least 21 years of age. This regulation applies across all states and territories, yet individual car rental companies may have their own limitations.

Young Drivers

If you're a young driver between 21 and 24 years old, please note that there might be additional charges. This extra cost, often termed as a 'Young Driver Surcharge,' is applied due to the perceived risk associated with younger drivers. The specifics can vary, so it's wise to confirm with your chosen rental company.

Older Drivers

On the other end of the spectrum, drivers above a certain age, typically 75 years old, may be required to provide additional documentation. This can include a medical certificate or a letter from your GP declaring you fit to drive. The prerequisite is not universal but is advised to be prepared for such requests.

  • If aged below 21: unable to rent a car in Australia
  • If aged between 21-24: may need to pay a Young Driver Surcharge
  • If aged above 75: may need to submit additional medical documentation

How the Rental Process Works

Planning a trip in Australia? A rental car could be an ideal choice. Don't worry if you're new to this, the process is easy to understand. Check out this section to learn about renting a car, from reservation to return.

Do Your Research

Choosing the right car rental company in Australia is the first step, and it requires a bit of homework. Consider factors such as pricing, types of vehicles, and customer reviews when selecting a car rental company in Australia. This will ensure you make an informed decision that best suits your travel needs in the country.

Making a Reservation

Once you've chosen a reputable car rental company that suits your needs and budget, you can book the vehicle. You may need to provide details such as intended pick up and drop off dates and times, your driving license details, and your preferred car type.

Picking Up the Car

Ensure you have the necessary documents (usually a booking confirmation, your driving license and a credit card) with you when picking the car up. An inspection of the vehicle is also important. Check for any scratches or dents and make sure they are documented to avoid any disputes later on. Know what type of fuel the car uses, and how to operate key features like GPS and air conditioning before you leave.

During the Rental

During the rental period, it is vital to abide by the company's terms and conditions, which often include not driving under the influence of alcohol, not over-speeding, and not smoking in the vehicle. Ensure you take good care of the car.

Returning the Car

Before returning the car, check it thoroughly and remove all your personal belongings. Refill the fuel, if you've chosen that option. Finally, return the vehicle on time to avoid extra charges.

Keep in mind, each rental car company may have its unique processes and requirements. Be sure to check with them for any specific instructions.

Financials: How Much Does It Cost?

Car rental in Australia offers freedom to explore. Concerned about costs? Let's examine the expenses involved.

Average Daily Rates

Firstly, here's some of the basic information to get you started. The average daily rates for car rental in Australia can vary based on the vehicle type and rental location. However, to give you a rough idea:

Vehicle TypeAverage Daily Rate (AUD)
Economy$30 - $50
Compact$40 - $60
Standard/Intermediate$50 - $70
Full-Sized$60 - $80
SUV$70 - $100

Factors Affecting the Price

It’s important to understand that the daily rate is not the only factor to consider when determining the total cost of car hire in Australia. Other factors include:

  • Duration of rental: On the bright side, longer rental periods often translate to lower daily rates.
  • Type of Insurance: While collision damage waiver (CDW) is usually included, there may be charges for additional insurance such as third-party liability coverage.
  • Fuel Policy: Fuel policies can significantly impact the total cost, especially if the fuel price rises during your rental period.
  • Extra Services: Extras such as GPS and baby seats can quickly add up to the total cost.

Insurance Considerations

You'd better consider your insurance options when renting a car. It's not the most exciting part of your journey, but certainly a crucial one. Let's break it down for you.

Should You Pay for Extra Insurance?

When renting a car in Australia, you might find yourself pondering over the question, Should I pay for extra insurance? Indeed, this is a worthwhile consideration, especially given the array of insurance options typically offered to you. To make an informed decision, let's delve into the types of insurance typically on offer, and the pros and cons of taking additional insurance.

  • Collision Damage Waiver (CDW): This covers the cost of repairs if the rental car is damaged in an accident.
  • Liability Insurance: It covers liability charges in case you're responsible for damage to other vehicles or property.
  • Personal Accident Insurance (PAI): PAI covers medical costs following an accident.
  • Theft Protection: If the rental car is stolen, theft protection covers the cost of replacing it.

Pros of Taking Additional Insurance

  • The main benefit of taking additional insurance is peace of mind. You know that if anything happens, you're covered.
  • Some insurance options, such as CDW and Theft Protection, can save you from substantial financial losses.
  • Insurance policies like PAI can provide necessary coverage for medical expenses that your standard health insurance may not cover overseas.

Cons of Taking Additional Insurance

  • Additional insurance can significantly increase the overall cost of renting a vehicle.
  • Some coverage may be unnecessary. For instance, your credit card company or personal auto insurance policy might already offer similar or same coverage.
  • Some insurance policies come with high deductibles, which you'll have to pay out of pocket in the event of a claim.

You need to weigh the potential risks against the cost of additional insurance. If the likelihood of needing the coverage is low, or the cost of the coverage is high compared to the potential benefit, it might not be worth the extra cost. Understand your personal situation, closely read the terms and conditions of the rental contract, and consult with your own insurance provider if necessary before making your final decision.

Supplemental Liability Insurance

If you're planning to rent a car in Australia, insurance is an essential aspect you must consider. One type of insurance available is Supplemental Liability Insurance (SLI). But, what exactly is it, and do you need it?

Supplemental Liability Insurance provides additional coverage protecting you from claims made by a third party for bodily injury or property damage. This comes in handy if the expenses exceed the rental car's basic insurance.

So, do you need it?

  • If you have personal car insurance, it may cover rental cars. Evaluate your existing policy first.
  • If you lack personal car insurance, or your plan does not cover rental cars, then SLI is a wise investment.
  • If you're using a credit card, it might offer some protection. Check with your card issuer.
  • Remember, higher limit coverage brings peace of mind when driving on unfamiliar roads.

Whether you need Supplemental Liability Insurance largely depends on existing insurances and your personal comfort with risk. Be sure to conduct a thorough analysis so you can drive with assurance and peace of mind.

Best Credit Card to Use

Considering the multitude of credit cards, it can be challenging to identify the best for car rentals in Australia. Some provide perks like insurance and reward points. But which one is the best?

Visa Premium Credit Cards: Visa Premium credit cards, including Visa Signature and Visa Infinite, offer auto rental collision damage coverage. This means, if your rental car is damaged or stolen during your trip, you may be covered for the repair or replacement cost. What's more, you don't even need to file a claim with your personal auto insurance.

Mastercard: MasterCard holders can take advantage of MasterRental Insurance. This coverage, available with Gold, Platinum, World and World Elite cards, may cover you for physical damage and theft of the vehicle, towing charges, and even loss-of-use charges.

American Express Cards: American Express Cards go one step beyond, covering not just collision damage but also secondary coverage for theft and accidental death or injury. The benefits can be accessed simply by paying for the car rental with the Amex card and rejecting the collision damage waiver at the car rental counter.

There are several legal requirements you must meet to ensure a smooth and hassle-free experience. Understanding these prerequisites will save you from potential future difficulties.

Driving License

First and foremost, you need to have a valid driver's license. If you are not an Australian resident, you may need an International Driving Permit (IDP) for Australia, along with your home country's driving license. This International Driving Permit for Australia is essential for ensuring your driving is recognized and legal while you're in the country.

Payment Method

A valid credit card is a standard requirement for most car rental companies to secure the payment for your rental car. Ensure that your credit card has sufficient balance.

Proof of Identity and Address

Car rental companies often require extra identification documents aside from a driver's license, necessitating customers to secure a valid passport, which often suffices as ID.

Car Insurance

Vehicle rental insurance is mandatory in Australia. Some car rental companies provide this as part of their package, while others charge an additional fee. Be sure to check how to obtain car insurance before making a booking.

Importance of an International Driving Permit (IDP) in Australia

Securing an IDP is a crucial step before renting a car in Australia. It gives you the freedom to drive legally overseas and enjoy your adventure without any hiccups. If you're wondering about the significance of getting an IDP, let's break it down:

  • An IDP is accepted in over 150 countries. Meaning, you could use your IDP to rent a car not only in Australia but around the globe, broadening your travel possibilities.
  • In case of any language barriers, an IDP has you covered as it is translated into 12 different languages. This feature ensures smooth communication when it comes to your driving credentials.
  • An IDP is usually valid for a period of 1 to 3 years, making it an excellent long-term solution for frequent travelers. You won't have to go through the hassle of renewing your permit each time you plan a trip.
  • The application process is fast, easy, and guarantees instant approval. So, you don’t have to wait long or deal with complex paperwork before embarking on your journey.
  • The worldwide express shipping ensures your permit gets to you on time no matter where you are, helping plan your Australia trip without any delays.

Each of these aspects works to simplify your car rental experience in Australia, making an IDP more than just a driving permit, but a gateway to hassle-free international road trips.

Picking a Vehicle

Deciding on the perfect vehicle to rent is essential for a seamless travel experience in Australia. Your choice should align well with your travel needs and itinerary. Therefore, let's take a closer look at some options:

Solo Travel or Couple

Couple Enjoying Seaside Sunshine
Source: Photo by Mahdis Mousavi on Unsplash

If you're exploring the wonders of Australia alone or as a couple, a compact or economy car is typically enough. They offer excellent fuel efficiency, easy maneuverability, and sufficient space for a small amount of luggage.

  • Economy cars: Ideal for travel within cities due to small size and great fuel economy.
  • Sedans: Provides a comfortable ride with more boot space for luggage.

Family Trip

Family Beach Walk at Sunset
Source: Photo by Colin + Meg on Unsplash

Are you travelling with a family or a group? When extra space and comfort become non-negotiable, larger vehicles come in handy.

  • Station Wagon: It offers ample space without sacrificing the comfort of a car.
  • SUVs: A sturdy vehicle that can handle rough terrains and changeable road conditions, potentially offering 4WD.
  • Minivan: Perfect when you're traveling with a larger group since it can comfortably accommodate 7+ passengers.

Adventure Seeking

For those geared towards an off-road adventure or exploring some of Australia's rugged terrains, a vehicle adept in all terrains is essential.

  • Four-wheel Drive (4WD): Built to tackle different landscapes with ease.
  • Motorhome or Campervan: Ideal for campers, offering accommodation on wheels.

Areas Worth Exploring with a Rental Car

Renting a car lets you explore Australia more freely and gives you easy access to various locations, including the top places to visit in Australia. This allows you to delve deeper into the distinctive local culture. So, where should you drive your rental car in Australia? Here are some top places to visit in Australia that should definitely be on your itinerary:


There's no denying the allure of this iconic city. With a rental car, you can take in gems like the Sydney Opera House and Harbour Bridge, then venture out to the stunning Blue Mountains or Hunter Valley vineyards, all in one day.


Melbourne's vibrant arts and food scenes are well worth a visit. Yet, with a car, trips to the fairy-tale-like Great Ocean Road and the Penguins at Phillip Island become easy and highly rewarding.


It's often underrated, but Adelaide has a lot to offer. Drive to the world-famous Barossa Valley for a taste of Australia’s finest wines, or hit the road to breathtaking Kangaroo Island.


The sunniest city in Oz deserves a spot on your itinerary. After soaking in city life, set course for the enchanting Pinnacles Desert or go south to the Margaret River region, a foodie's and nature lover's paradise.

Don't forget, the real beauty of Australia lies not only in its cities but its natural wonders. With a rental car, you can appreciate both.

Choosing Rental Companies and Insurance Providers

Wondering about the best rental companies and insurance? We're here to guide you through each step and give you some examples.

Car Rental Companies

Renting a car in Australia involves choosing from many rental companies. Each has unique offerings. Therefore, comparing rates, services, and customer reviews is critical to find the best fit for your trip.

Some of the well-known car rental companies in Australia include:

  • Enterprise
  • Hertz
  • Avis
  • Budget
  • Europcar

Now that you have an idea of car rental companies in Australia, are you ready to dive into more in-depth information? Do you want to understand the specific attributes of each company, including pricing details, the type of cars available, customer service reviews, and more? There's a lot to consider, isn't there?

If your answer is yes, then you need to check out our comprehensive article on "Top Car Rental Companies in Australia". It provides an in-depth comparison of the leading car rental companies that will help you make an informed decision while planning your Australian road trip!

Car Rental Insurance Providers

There are several reliable car rental insurance providers in the country that offer comprehensive coverage. Let's quickly go over some of these popular providers.

1. AAMI: Known for their wide range of coverage options.

2. Allianz Australia: Recognized internationally for their superlative service and variety
of plans.

3. NRMA Insurance: Prized for their detailed policies that cater to several rental models.

4. RACV Insurance: Renowned for their competitive prices and flexible plans.

5. SGIO: They distinguish themselves by offering specialized packages for different types
of renters.

For a more in-depth analysis of these providers and others not mentioned here, we strongly recommend you read our related article on the best car insurance in Australia.

Pick-up and Drop-off Locations

Choosing the right pick-up and drop-off locations can make your journey smoother, more efficient and less stressful. Here's some insight into this crucial aspect of car rental.

Considerations for Pick-Up Locations

The selection of a pick-up location depends largely on your travel plans. So, it's important to answer the following questions first.

  • Will your journey start from an airport? Most car rental companies have offices at major airports. Picking your car up from the airport can be convenient, especially if you're flying into the country.
  • Are you planning a city stay? Consider picking up your car from within the city. Many car rental companies have offices in the city center, making it easy for you to begin your journey.

Choosing the Right Drop-Off Locations

The drop-off location is another crucial factor. Make sure it aligns with your travel itinerary.

  • End of journey: If your journey ends at a major city or airport, choose a drop-off location there.
  • Return at a different location: Most car rental companies in Australia allow for different return locations to provide flexibility to your travel plans.

Additional Charges and Extra Costs

Exploring Australia's beauty in a rented vehicle could be expensive due to additional charges beyond the rent. Let's understand these charges.

  • Late Return Fees: Car rental companies operate on strict schedules, and late returns can disrupt their flow of business. Consequently, returning your rented vehicle late often incurs additional fees. It's generally measured on a per-day basis, and depending on the rental company, it could be higher than the daily rental cost itself.
  • Extra Mileage: Some car rental agreements include a mileage limit, and driving beyond this limit incurs surplus charges. Always check the kilometer limits in your contract so you can plan your journeys accordingly.
  • Early Return Fees: A less known fact: returning the car earlier than scheduled can sometimes also result in fees. This is due to the potential loss rental companies face when they can't rent out the car as initially planned.
  • Fuel Charges: If you don't return the car with a full tank of gas (unless specified otherwise in the contract), you may end up paying a premium for the fuel needed to fill the tank.
  • Additional Driver Charges: If more than one person will be driving the car during your rental period, be aware that some companies may charge extra for each additional driver.

Money-Saving Tips

It's important to be smart about your expenses when renting a car in Australia. Costs can increase rapidly if you're not careful. But don't worry, we're here to help. We've put together a list of tips to save money and ensure a smooth, affordable rental car experience. Let's get started.

  • Know What You Need: First things first: be crystal clear about what you need. Are you traveling solo or with a family? Is your trip business or leisure? The answers to these questions dictate the type of car you need—a compact for one, a luxury model for a group, or maybe an SUV for off-roading adventures. Knowing your precise requirements can rein in any unnecessary expenditure.
  • The Early Bird Gets the Worm: Next up, be an early bird. Rental car prices tend to rise as your travel date nears, so book your car as far ahead as possible to lock in the best rate. But what if you find a better price later, you might ask? This is where free cancellation comes in; it allows you to secure a low rate early on and then continue to monitor prices.
  • Avoid Airport Rentals: While airport rentals may be convenient, they're often more expensive due to additional airport fees. Instead, consider renting from an off-airport location. Sure, you'll have to find transportation to the rental location, but the savings could be worth it.
  • Return it Full Always: return your rental car with a full tank of gas. Many companies charge a premium rate for refueling, which can significantly inflate your final bill. Fill it up yourself before returning the car to avoid surprise charges later.
  • Consider Insurance: Last but not least, consider the insurance options. While it might seem like an unnecessary expense at first, having proper coverage can save you a lot of money in case of accidental damage.

Understanding the Rental Agreement

It's paramount to understand the rental agreement before signing to ensure there won't be any surprises or unexpected costs at the end of your rental period. Here's what you need to keep your eyes peeled for:

  • Term of rental: The duration of the rental agreement is vital. It's essential to confirm both your pick-up date and time, and drop-off date and time. Avoid confusion and additional charges by clearly understanding these times.
  • Rental rate: Make sure to understand how the rental fee is calculated, if it's per day or per hour, and if there are any charges for additional mileage or hours.
  • Insurance: Check if the rental includes insurance coverage. If not, you might want to invest in rental car insurance for peace of mind on your trip.
  • Fuel policy: Rental companies can have different fuel policies. Some may require you to return the car with a full tank of gas, while others may fill it for you and charge you for it afterwards.

Take a careful look at these sections as well:

  • Damage policy: This will detail what happens in the event of any damage to the vehicle. Be aware of what you're liable for.
  • Additional driver rules: Ensure you understand the rules and costs involved if you plan on having more than one driver.
  • Early return or late drop-off fees: Some companies may impose charges if you return the car either earlier or later than agreed.
  • Traffic violations: You should understand your liability for any potential traffic violations during the rental period.

Types of Rental Contracts

Entering the Australian car rental scene can be overwhelming due to numerous rental contracts. Here's a simplified guide on the common rental contracts in Australia.

Short-Term Rental Contract

Chances are, this is the type you'll most likely come across as a tourist or temporary resident. It provides you with a vehicle for a short duration, generally between a day and a month. Flexibility is key with this contract, allowing for extensions or reductions as needed.

Long-Term Rental Contract

Planning on sticking around for a while? A long-term rental contract might be more your speed. Ranging anywhere from one month to a couple of years, this agreement gives you the use of a car without the concerns of ownership.

Lease Contract

Think of a lease contract like a long-term rental but with more commitment. You'll agree to rent a vehicle for a fixed time period (usually 2-3 years), and at the end of your term, you have the option to purchase the car or return it.

One-Way Rental Contract

One-way rental contracts might be the solution if you're planning a road trip and don't want to double-back to your starting location. This contract lets you pick up a car at one location and drop it off at another.

Closing Thoughts

Renting a car in Australia can be a straightforward process with the right approach. Whether you're on a business journey or an exciting adventure, having a rental car at your disposal allows you to navigate the land Down Under at your own pace. Remember, being informed and prepared are the keys to smooth car hire experiences.

So, are you ready to hit the road and explore the boundless beauty that Australia has to offer?

Feel free to revisit the vital points in the article, or click on the provided links for more comprehensive details. This way, you can ensure a hassle-free and enjoyable journey through Australia.

Get your International Driving Permit in 8 minutes

Instant approval

Valid for 1-3 years

Worldwide express shipping

Back to Top