How Old Do You Have To Be To Rent A Car?

Dustin Hawley | Mar 15, 2021

Adulthood can be difficult to define. At the age of 18, you’re old enough to vote, buy a car, own a business, or take out a college loan. You can even risk your life in a war by joining the armed forces. But for those on leave who want to come home and crack open a cold beer with their friends? Tough luck, as you have to be 21 years old to drink legally.

how old do you have to be to rent a car

Meanwhile, there’s a persistent myth that you have to wait until age 25 to rent a car. If you’re an adult at 18 and old enough to drink at 21, how is it possible that you have to be 25 to rent a car?

In short, it’s not. The “25-to-rent” rule has long been inactive, though there were many legitimate reasons for its existence. And though you can technically rent a car if you are under age 25, there are reasons you may not want to. 

So, how old do you have to be to rent a car? Let’s take a closer look at car rental age and the factors that affect it. 

Where Did The “25-To-Rent” Myth Originate?

Insurance rates are generally much higher for younger drivers, which is the primary driver of rental age restrictions. Younger drivers are less experienced and more likely to take risks than older drivers, which leads to higher insurance rates. For decades, insurance companies have drawn an invisible line at age 25. While this unwritten rule didn’t exempt underage drivers from renting a car, rental companies would charge anyone under 25 a significantly higher rate.

Rental companies pay for a fleet policy, which allows a sizable rental firm to insure thousands of vehicles at a discounted rate. However, this rate is based upon the insurance risk pool, or the average risk of all the insured vehicles. By restricting rentals to individuals aged 25 and over, rental companies reduce the risk of their entire pool, enabling them to have much cheaper fleet insurance rates.

For this reason, many people thought that the “25-to-rent” rule was law. Yet, it was simply an industry convention designed to reduce insurance rates for rental companies.

The New Standard

As the Dylan song says, “The times, they are a-changin’.” 

By restricting their customer base to older renters, companies started to realize they were missing out on a large part of their potential market. For this reason, almost all fleets have developed a straightforward solution; they simply charge an underage fee to younger renters. 

Adding an increased fee has allowed them to offset their increased insurance costs while offering rentals to a larger demographic.

For younger drivers, the downside of this policy is obvious; while you can still rent, it will cost much more than the standard going rates. Depending on your location, you can expect to pay an underage fee of around $25 to $30 per day. On a week-long rental, that’s an extra $210!

Some Younger Drivers Can Still Rent

So, the new “invisible line” or age limit is 21 now, right? Not exactly. 

Like the old 25-to-rent rule, this new age “limit” is just an industry convention. Some companies, such as Hertz, have lowered their minimum age to 20. Other brands like Budget have even reduced it to 18, although this is a short-term “beta” test that may or may not become the company’s new standard.

Regardless of the ever changing nature of rental company policies, in some cases, state law takes precedence. For example, Michigan and New York mandate that all rental companies rent to drivers 18 and over. However, this freedom comes at a steep cost. Renters aged 18-20 can expect to pay underage fees as high as $50 per day in Michigan and up to $65 per day in New York. That could add up to a whopping $455 per week in underage fees alone. 

Furthermore, all renters under the age of 25 are often restricted from renting certain classes of vehicles. Younger drivers are typically unable to rent SUVs, luxury cars, and performance cars from most locations. So while state precedence may provide young drivers with the ability to secure a rental car, increased fees may discourage it from a cost perspective. 

Exceptions To Underage Fees

Since many of these fees are reasonably high for any young adult’s budget, it may be challenging to afford to rent a car if you are underage. However, there are several ways that certain drivers can avoid paying underage fees. 

For instance, both Hertz and Avis will waive underage fees for AAA members. That’s a significant benefit, particularly if you already signed up for AAA to get access to their roadside assistance service. But rest assured, if you aren’t a AAA member or need to use a different car rental company, there are still a couple of ways to avoid underage fees.

If you are employed, many companies have corporate accounts with a specific rental fleet that often includes a waiver for underage fees. Enquire with your employer to ask if your company has a corporate account that provides access to this fleet. 

Additionally, all US rental companies waive underage fees for US military service members on official business. This means that to qualify for this waiver, you must be reporting for duty, transferring to a new base, or reporting to another assigned location. Most companies will require proof, such as a copy of your orders, to waive their fees.

Keep in mind that this can cost you money on some return trips. For example, if you receive orders to ship out, you can get a fee-free rental to transport you to wherever you are reporting to. However, if you are simply returning home on leave and driving back to mom and dad's house to visit, this is not official business. In turn, you would still be required to pay the underage fee.

Is There a Maximum Rental Age?

As it stands today, there is currently no maximum rental age in the US. The same is true for Canada, so senior citizens can drive their rentals freely throughout North America as long as they have a valid driver’s license. 

That said, some countries restrict rentals for drivers over the age of 80 or even 75 in some areas. As is the case with their younger contemporaries, older drivers should call ahead if they’re traveling overseas and confirm their rental before traveling. This way, you’ll be able to avoid any problems before they potentially arise.

Summary

Though there is a very loose age limit applied to car rentals, the simplest way to put things is that renting a car is going to be expensive until you’re 25 years old. In some cases, it will even be difficult or sometimes unlikely until you’re 21. As a result, the expense of renting a car may not be worth it, particularly if other transportation options are available (public transit, ridesharing services, etc.). Keep this information in mind when searching for the best rental options at your disposal.

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