Car rentals in Costa Rica are expensive because of the numerous processes involved, which also require money. For instance, the insurance and rental fees can cost about $500 a week or eight days. However, this can be more or less depending on the type of vehicle and car rental company you choose, but it still doesn’t change the fact that it’s expensive.
When my husband and I first visited Costa Rica and decided to rent a car, we wondered why we had to pay so much for a one-week rental. Costa Rica is undoubtedly a lovely country and attracts many tourists year in and year out, but we didn’t see the need for the expensive rental fees.
That was when our friend stepped in and tried to explain how car rental companies have to pay mandatory yearly insurance called “Morchamo,” which costs about 20 million Colones, which is about $40,000, to be able to operate. So, to meet up, they had to develop their insurance policies and start adding insurance fees to all of their vehicles.
In this guide, I’ve provided detailed information on why car rentals are so expensive in Costa Rica and how to save money on them.
Key Takeaways
- Rental cars are more expensive during the peak tourist period than during the low tourist period.
- The peak tourist season is from December through April and partly July to August.
- The best time to purchase a car rental service is during the low peak season when prices are cheap, which is from May, September, and November.
- Use comparison websites to compare prices between rental companies to get the best price.
- Take your time to read through the rental agreement and insurance options to avoid paying for services you don’t need.
- Choosing smaller vehicles will help you spend less on rental fees.
Factors Contributing to High Car Rental Costs
It is always an enjoyable experience to explore. Costa Rica on your own, or a few friends and family in a rental car. However, lately, renting a car in Costa Rica has been quite expensive, and many travelers have been complaining about the high cost.
The thing is, various factors contribute to the high car rental costs, and below are some of them:
Insurance Requirements
Costa Rican roads are pretty challenging and unpredictable for things like accidents to occur when driving.
This is why the government has put in place a mandatory insurance law that all car renters must purchase to cover for damages and injuries that may occur while driving both to the car and third-party properties and to protect you from the high costs of repairs and replacement of the rental car in the worst cases.
It is important to note that the renter’s personal accident insurance from their home country is invalid in Costa Rica, so it is best to follow all due processes for Costa Rica’s insurance before you begin your trip.
Also, before renting a car, fully understand the car rental company’s terms and conditions concerning rental fees, insurance fees, etc.
Below are some of the insurance policy options offered by car rental companies in Costa Rica.
Basic Liability Insurance: Also called Third-Party Insurance, this is the mandatory insurance that is included with your car rental deal. It covers only damages to other people and their properties caused by driving the rental car.
It does not cover your rental car at all and costs about $10 to $25 per day.
Typically, the larger the car, the more expensive it is. The same applies to your rental fees too.
It is mainly the mandatory third-party insurance that hikes the price of the rental fees.
If the rental fee of the car you choose is $50 per day and the mandatory third-party insurance for that car is $25 per day, this gives you a total of $75. Multiply that by the number of days or weeks you are renting the car to get the amount you will pay for the rental duration.
Now that basic liability insurance, also called third-party insurance, only covers the damage done to third parties and their properties, some rental companies offer insurance options that serve as additional coverage for you and the car.
Here are some of them:
Collision Damage Waiver (CDW), also called Loss Damage Waiver or Car Protection, is not actual insurance but a waiver of financial responsibility in situations of damage, theft, and accidents to the rental car.
The insurance coverage may subject you to a deductible, which means you have to pay a portion of the car’s repair costs. Depending on the damage and the rental company involved, the deductible can range from $1,000 to $1,500.
This amount is always charged from your credit card and is refundable if you return the car the way you received it.
Now that you fully understand some of the insurance policies attached to renting a car in Costa Rica, you need to know some requirements for renting a car in Costa Rica.
- You need a valid driver’s license from your home country that has your full name on it.
- You must be 25 years of age or older before you can rent a car.
- You need to present a valid credit card with your full name on it and at least $5000.
- You need to provide a current passport with a valid immigration stamp on it.
Once you have all the above available, you are qualified to rent a car in Costa Rica.
Pro Tip
- If you drive the rental car across a stream, a beach, or there are traces of salt in it, the insurance is voided. So ensure you are on the safe side when driving.
- There are no refunds for unused service. So, if you rent a car and do not use it or return it early, you will not be refunded.
- The insurance is voided when you drive the car outside the borders of Costa Rica.
Taxes and Fees
Apart from insurance fees, another factor contributing to the high cost of rental cars in Costa Rica is certain taxes and fees that are either imposed by the government or rental company before you can drive out with the rental car.
Below are some of the taxes and fees that you are required to pay for renting a car in Costa Rica:
Sales Tax: This is a 13% value-added tax placed on rental cars by the Costa Rican government. So let’s say your rental car fee is $60 per day, You are to pay 13% of that $60 daily for you to be able to drive the car. Most rental companies factor this amount into the rental fees, while others don’t.
Environmental Fees: You are charged an environmental fee of $2.80 per day. This applies to all rental companies and locations.
License Plate Fees: You pay $1.50 per day to use a government-issued license plate. This applies to all locations and rental companies.
Airport Fees: Most rental companies charge you an airport fee of 13% of your total price. This mostly happens when you rent your car from their representatives at the airport.
Extra Driver Fee: This is charged when you inform the rental company that you won’t be driving alone. You need an extra driver for the trip. You will be required to pay $10 to $13 per day, depending on the company and distance of the trip.
Children’s Seats: If you brought children under 12 years old, you will be required to provide a seat for the kid(s). Most rental companies already have child seats and charge $5 to $10 per day for them. It’s best you bring yours.
Under 25: If you are under 25 years old and decide to rent a car, you may be charged an extra $10 to $20 per day.
Pick up/Drop off: You only pay for this service if you rented the car in a different location and wanted it delivered to you in a different location or you are dropping off the car in another location. It costs $20 to $100.
All of these are some of the compulsory and hidden fees and taxes that would likely spike rental car costs.
Vehicle Maintenance and Import Costs
Importing and maintaining a vehicle in Costa Rica is no walk in the park and contributes to the high rental costs of cars in the country. Before you can import a car into Costa Rica and drive it, you must pay about 52%+ of the total value of the car as importation fees and custom duties, plus an additional mandatory sales tax of 13%, bringing it up to 65%+.
Now let’s say you bought the car for $40,000; you are to pay 65% of $40,000, thereby pushing the car to about $67,000 or more.Do you now see why rental cars are expensive? Cars that are affordable in other countries are very expensive in Costa Rica.
Aside from the importation fees and customs duties, Costa Rican weather is another huge problem for rental companies that own fleets of cars. The weather is very humid, which causes the metal parts of the car to rust faster, and most spare parts are very expensive to import.
In addition, most Costa Rican roads are in very bad condition, which makes maintenance very expensive and invariably increases rental costs.
Damage and Supply Dynamics
Seasonal change can affect the high demand and supply of rentals, invariably contributing to the hike in rental costs. Costa Rica is undoubtedly a lovely country with mesmerizing beaches and landscapes.
There’s always a surge of tourists entering the country to visit those tourist attractions. The peak period for tourist visits is mostly in the dry season, which runs from December through April.
Making it the most expensive time of the year to rent a car in Costa Rica, thereby causing the demand for cars to be high and the supply to be limited. So car rental companies hike their prices during this period.
Pro Tip:
To get the best deal, always book your car rental in advance, especially during the low-peak tourist season, which runs from May through September to November. This is the cheapest season to rent a car because it’s the rainy season, and there will be fewer tourists visiting the country then.
Rental Durations and Conditions
The duration of the rental determines the cost. For someone who wants to rent a car for 3-5 days, the rental fees would be higher compared to renting for 8–15 days, weeks, or even months.
So if you want to pay lower rental fees, consider renting a car on a long-term basis. And apart from the rental duration, there are other conditions that can hike your rental fees.
Underage Driver: The legal age for renting cars in Costa Rica is 25 years and above. However, most rental companies allow drivers from the age of 21 to rent cars, which do not come free or cheap.
If you are less than 25 years old, you will be charged an additional $10 to $20 per day in rental fees. So, if you were supposed to pay a $25 rental fee per day, you will end up paying between $35 and $45, depending on the rental company and season.
Additional Drivers: Asking for an extra driver can also raise the rental fee, likely because you are not physically able to drive for a long distance or you just need extra company.
Requesting for an additional driver comes at a cost of $10 to $13 per day. Now multiply that by the number of days you need this driver for and add it to your rental fee, and you will find out that you are paying more.
One-way Rental: This occurs when you want to pick up or drop off the rental car in a different location. It costs between $29 and $100.
Fuel Costs
Another factor increasing the cost of rental cars is that most cars have already been pre-fueled by the car rental company. So, they charge you for the already-filled tank.
Most smart rental companies will add it to the rental fee without you knowing, while others will charge you outrageous fees for it.
So, to avoid excessive extra fees, know that a gallon of gas costs $5.25 for regular and $5.56 for super. Now that you know this, you can reject any outrageous fuel costs attached to the rental fee.
Finally, learn to manage your fuel when driving so you don’t spend too much buying fuel. Simple things like turning off your AC when not in use can help you save fuel, thereby reducing costs.
Cost-saving tips For travelers
Book in Advance
To avoid paying high rental fees, I advise you to book your rental car in advance, preferably 3 to 4 months before your travel date or during the rainy season, when the rental fees are very cheap.
Doing this will not only help you avoid rental price hikes but also give you a broader selection of vehicles, giving you a broader option to choose the kind of vehicle you really want.
And you will also have enough time to make cancellations and get a refund if you don’t want to continue again, and the best part is that you will be at ease when planning a trip to avoid the stress and disappointments that come with last-minute bookings.
Compare Rental Companies
Another way to save costs is by comparing rental prices of different rental companies on comparison websites to get the best price.
When I discovered these websites and started using them, I was able to save a whopping $150 on my rental fees. Ever since, I always use comparison websites to check the best prices before booking a rental car for my tours, and I’d advise you to do the same.
You can use many comparison websites, such as Expedia, Kayak, and Rental Cars, for this.
Consider Small Vehicles
One thing that can help you save costs is choosing smaller vehicles. They are way less expensive than bigger vehicles like the 4×4 SUV, both in peak and low tourist periods.
Aside from the low rental fees, you also spend less fuel on the car compared to bigger vehicles like 4×4, and you can drive with ease and convenience.
Understand Insurance Options
Fully understanding the different insurance options presented by rental companies can help you save costs.
I’ve seen a couple pay for two insurance options that seem different but are almost the same.
So before signing any rental agreement, ensure you read through the lines, ask a lot of questions from the rental company representatives, and read reviews from online forums and more knowledgeable people.
And read through the terms and conditions and all other additional requirements. In the end, you will discover you have saved yourself from paying extra fees for the same service.
Additionally, if you’re debating whether you really need a 4×4 vehicle, take a look at our guide on Do You Need A 4×4 To Drive In Costa Rica? to help make an informed decision.
Conclusion
Costa Rica is a unique tourist destination because of its stunning beaches, landscape, and varied wildlife.
All year round, tourists from different parts of the world troop into the country to see these different attractions, and with that influx of tourists, especially during the peak tourist season, comes a hike in the price of rental cars due to the high demand, coupled with the additional insurance and tax fees.
To get the best price, I would advise booking 3–4 months ahead of your trip.
About Michelle Schmidt
Born in California, Michelle traveled extensively through the USA and Europe before moving to South Florida during the pandemic. Her career in Marketing has taken her all across the world. Her favorite country is France but she'll never turn down a beach vacation!
