The Ultimate Guide To Car Rentals In Australia

Australia is a vast and geographically diverse continent with spectacular scenic drives that will leave you in absolute awe. If you are thinking of going on a road trip to the land down under in the coming months, we narrowed down the best budget-friendly car rental companies in the country, the cost breakdown and a few pointers to ease your travel planning!

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There are plenty of car rental companies across Australia. However, the most reliable service providers in the market are Avis, Budget, Europcar, Hertz and Thrifty based on their customer service, transparency of costs and fees, value for money, quality of vehicle, availability of vehicle and overall satisfaction.

Alternatively, we also recommend third-party channels such as Car Hire, Drive Now, Kayak, Rental Cars and VroomVroomVroom to search, compare, and book your rental car. 

Cost Breakdown for Car Rental Prices in Australia?

There are a handful of surcharges and fees contributing to the car rental rates seen on booking websites. Though the cost breakdown differs for each service provider, there are still a few charges that they share in common. To understand how the car rental price structure works, we have provided a quick overview of some of the charges that contribute to the price.??

The additional taxes and surcharges that are added to your car rental rate depend on a number of things. For example, the location you are picking up the car from, the company you are hiring from and the age of the driver all affect the price. These charges are usually charged at a daily rate. Note that even if you choose to add extras to your booking, this should not alter the base rate. Although the breakdown may be different for each of our suppliers.

The base rate is the basic cost of your rental car before any relevant taxes and surcharges have been added. Premium Location Fees, Admin Fees & Goods and Services Tax (GST) are included in your total cost, however, as per the terms and conditions of rental, the same percentages are applied to all the extras that you request. The percentage changed may be different depending on the supplier and location you are hiring from. If you choose to request any optional extras such as child seats or a GPS, these will incur an extra charge.

Example of Rental Cost Breakdown

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When receiving a quotation from the car rental company of choice, the price will include an administration fee, GST, premium location surcharge and vehicle registration recovery fee on top of the vehicle cost.

Administration Fee: A fee applied to the total cost to cover the State Contract Stamp Duty Costs.

Rental Cost: Refers to the total amount of rental charges.

Premium Location Surcharge: This is an additional surcharge charged by the car hire company when you rent a car from an airport or some city and remote locations. The amount varies depending on which car rental company you hire the vehicle from, and the location where you collect the vehicle. In Australia, this amount can range from 0-30%. The surcharge applies to all rental costs, including the cost to hire the car itself. 

Tax: Represents state and local sales tax on total rental charges.

Vehicle Registration Recovery Fee: This is a charge that reimburses the car rental company for any registration and compulsory insurance charges imposed by the states and territories of Australia.?

Driving A Rental Car In Australia 

Tip #1: Familiarise Yourself With The Driving License And Road Requirements

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For the majority of car rental services, the minimum age to rent a car in Australia is 21 years. Please note that additional charges, known as the young driver surcharge, will be incurred to the rental agreement for adults under 25. Upon registration, drivers are obligated to present a valid driving license issued from their country of residence that has been held for at least one year, three in Tasmania, and an International Driving Permit (IDP), if required. 

(Related Story: How To Rent A Car If You Are Under 25)

Australians drive on the left side of the road. Therefore, drivers from Singapore will not face complications as they are more or less familiarised with the traffic regulations. Their speed limit varies between 100 to 130km/h, so do bear in mind that this is not the autobahn.

Tip #2: Shop Around For Car Insurance

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Car rental inclusions can vary significantly according to the service provider. Most countries require the base rental rate to be inclusive of the Collision Damage Waiver (CDW) – A basic protection that limits how much a company will charge for repairs. The CDW is highly crucial for drivers to avoid forking out a hefty amount from their pockets in case of an accident. On average, the standard excess rate in Australia costs between A$4,000 to $5,000.

Upon arrival, the rental agent might offer an alternative option to waive or reduce the fees with insurance cover. Before proceeding with the offer, refer to your travel insurance and credit card benefits to confirm if it covers car rentals. Else, consider purchasing third-party insurance from a car rental broker instead. 

In the event of damage, the supplier will charge you for the excess amount first, which you can then claim back from your insurer. Even though it might take a little while to process, you could save as much as half the price of purchasing insurance from the desk. However, brokers usually charge diminishing fees for insurance whereas providers charge a flat rate.

Tip #3: Inspect The Condition Of Your Rental Car

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Before driving off on an adventure, conduct a thorough inspection of your prospective rental car to ensure that the pre-existing damages have been specified in the agreement. If there are additional damages that were not recorded in the contract, inform the rental agent immediately. 

On top of that, photograph the condition of your rental car to preserve visual evidence. Even the smallest imperfection should be documented! Doing so will help towards diffusing a fraudulent claim of damage, or an honest mistake, by the rental car company.

 Tip #4: Have An e-Tag To Pay For Toll Charges

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Toll roads are a common sight in Australia – Especially within the urban limits of Brisbane, Melbourne and Sydney. For a seamless driving experience, e-Tags, known as a free-flow tolling electronic toll collection system, has been installed into an increasing number of Australian rental cars. This encoded magnetic device will speed up the process whenever drivers pass by toll gates as it automatically covers toll costs across the country.

However, if your rental car is not fitted with an e-Tag, you can still pay for the toll online or over the phone. Bear in mind that all tolls are cashless and either need to be paid for using the e-Tag or directly with Linkt. To get an estimated cost of the toll charge, use CityLink’s toll calculator.

Tip #5: Trams Have Right Of Way

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The extensive tram network in Melbourne requires some additional care in understanding how to share the road and tram lines. There are three important tram-related rules drivers must observe:

  • Normally, cars drive over the tram tracks and there will be a dotted yellow lane marker left of the tracks which means cars are permitted to drive in the tram lane. If there’s a solid yellow line next to the tram lane, cars are not permitted to drive in the tram track lane.
  • Tram passengers have right of way when crossing the road to or from a tram (open tram doors count as a stop sign – some of them actually have a sign that comes out), so do not drive a vehicle past a tram at a stop, unless the tram is stopped at a cordoned off stop with barriers.
  • As many roads in Melbourne’s CBD have tram tracks, turning right across the tram tracks can be difficult. To get around this problem, the “hook turn” was invented. This involves turning right from the left lane. To execute a hook turn, approach the intersection in the left lane, and indicate to turn right. Proceed into the intersection as far left as possible (avoiding the pedestrian crossing), moving across until you end up being perpendicular to traffic which is heading in the direction you want to turn (who are waiting at a red light). Observe the traffic lights to your right. Once green, you turn to your right and proceed as normal. Signs indicating whether a hook turn is necessary are hung off tram power lines at the intersection. Do not attempt a hook turn at other intersections.

Tip #6: Watch Out For Wildlife (Avoid Driving At Dawn And Dusk)

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In Australia, there has been a dramatic increase in the number of native animals struck or killed by cars on the road. And with autumn approaching, even more kangaroos will be seen roaming outside their normal territories as it is their mating season. 

Though kangaroos are not the most road-savvy animals, most of them will still give way to cars passing through. Regardless, to prevent causing potential collision risks, reduce your speed and switch your lights to low beam while travelling during dusk to dawn. This is because the headlights of the cars will startle them, especially in roads without street lights.

(Related Story: 5 Things You Need To Do Before Going On A Road Trip)

Driving in Australia is an experience to be savoured. Ultimately, it is the most ideal mode of transport to soak in the wide-open spaces and magnificent natural scenery for there are numerous destinations that are only accessible by car.

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