Is there such a thing as car hire with no deposit? You're certainly not the first person to ask that question. Car rental deposits are a thorn in the side of many. Even if you only want to rent a vehicle for a day or two, almost all car hire firms will ask for a security deposit to pay for damage to the car that's not covered by the insurance.
Car hire deposits usually come in the form of a hold put on a debit or credit card. Rather than actually taking the funds, it remains in your account but is unavailable until the hold is removed by the car hire firm. In practice, that means some of the money in your account will be unavailable for the duration of the rental. The money will be made available again once the vehicle has been returned and processed.
Why is it necessary to take a deposit?
For many people, having money they are unable to spend is not a luxury they can afford. However, car hire without a deposit is extremely rare, particularly if you hire a car in the UK. The reason car hire firms ask for a deposit is because they need some assurance that they won't lose money if damage is caused and you fail to pay the amount you owe. Unfortunately, this can put a barrier in the way of many honest individuals.
Credit card vs. debit card payments
Whether you pay for your car hire with a debit or credit card, you will still have to pay a deposit. However, generally speaking, a credit card is the better choice for payment. That's because although a hold will be placed on funds when paying with both cards, using a credit card does not give the rental car company direct access to your bank account. It also allows you to dispute charges through your credit card company if you believe you have been charged for damage in error.
When using a debit card to pay a security deposit, there are a number of conditions that may apply that can be time-consuming. For example, some rental car companies that allow you to use a debit card to pay a deposit will run a credit check when you pick up your car. You will only be permitted to use the debit card if you pass their criteria.
Is 'no deposit car hire' available anywhere?
In the UK, the US and Canada, you are unlikely to find car hire without a deposit. However, when hiring a car in Europe or in other countries around the world, you may find firms that are willing to offer no-deposit car hire. Generally speaking though, the vehicles on offer are likely to be well-used and not kept in the same 'as-new' condition. That's something you should take into account when making your decision.
How much is a car hire deposit?
A car hire deposit can vary dramatically depending on the type of car you're renting, the country you're renting it in and the firm you're using. For a budget vehicle it will usually be around the £200 mark; however, it can be up to £2,000 in some cases.
I've taken out insurance so why do I need to pay a deposit?
You'll find that the deposit you are asked to pay is usually around the same amount as the excess on the vehicle's Collision Damage Waiver and Theft Protection policies. The excess is the amount you have to pay towards a damaged or stolen car. If the excess is not paid then the car hire firm would be left out of pocket. There is also some damage that is not covered by typical car insurance policies. That usually includes damage to the tyres and wheels. A deposit allows the car hire firm to recover this cost. Find out more about car hire insurance here.
Read the terms and conditions before hiring a car
You should always read the terms and conditions before you hire a car. While most firms will merely ring-fence the security deposit, some will take it from your account and only repay it once the car has been returned. It's essential you know how much deposit you will have to pay and how you will have to pay it before you make your booking.
Check out our great car rental deals now !