Portugal car rental tips. Cars parked in a cobbled street

If you want to explore beyond Lisbon and Porto, it may be best to rent a car in Portugal to give you full flexibility over where you go and when. Car rental in Portugal is fairly straightforward if you know what to watch out for, as is driving here.

These insider car hire tips will help you save money and avoid feeling ripped off by unanticipated charges when you collect your Portugal car rental. 

There are car rental offices in all major Portuguese airports and cities but don’t wait until you get here to find a car to rent – that will always cost more than booking ahead.

Tips for getting the best price when you rent a car in Portugal

It’s never too soon to book a hire car

You can get some fantastic deals on car rentals in Portugal if you book well ahead. The later you leave it, especially at peak holiday periods, the higher the cost will be.

As an example, when I first started looking at car hire in the Azores Islands, I could have rented a car for 3 full days for about €50 in São Miguel. By the time I got around to booking one a month later, the cost had doubled. If I’d left it until I got to the airport, I’d have had to pay at least €100 per day for a tiny car.

My advice: Use a comparison website like Discovercars or Booking.com car rental to see what’s available and compare prices between rental companies e.g. Hertz, EuropeCar, Budget and others you may not have heard of. 

If you find a deal that suits you, book it up. With most companies offering free cancellation, you can always get your money back if you spot a better offer or change your plans.

Search results page at Discovercars.com
Discovercars.com search results
Compare prices with Booking.com car rental
Booking.com car rental
Booking.com car rental search page

Car rental periods

Car hire is typically charged per 24-hour period so if you pick up a car at 10 am on day 1 and return it at 11 am on day 2, you’ll end up paying for 2 days.

Avoid this by carefully selecting your pick up and drop off times. You also need to double check opening hours for rental offices away from the airports and especially in smaller cities. Many close at 7 or 8 pm during the week and at 1 pm on Saturdays for the rest of the weekend. If you can’t return your car before they shut, you may have to pay to keep it until the following working day or pay an extra fee.

Tip: If you need a car for 5 or 6 days, try altering your search to see how much it would cost over 7 days. You may find a cheaper weekly deal and there’s nothing to stop you returning the car before the end of the hire period.

One way car rentals and different drop-off locations

Although one way rentals may be described as being free within Portugal, the reality is that if your drop off point is different from the pick up location, even within the same city, you will pay more, sometimes considerably so.

How to deal with this: Plan your itinerary to come full circle so you can use the same pick up and drop off location. Look into the cost of public transport or taxis to or from pick up and drop off locations if necessary to see what is most cost-effective and convenient for you.

If you are flying in and out of different airports, it may even be worth arranging two separate car rentals.

Automatic or manual transmission?

Most cars in Portugal have manual transmission which means that automatic cars are in short supply and therefore are more expensive to hire, usually double the price.

What to do about this: If you’re not used to driving a manual car, it’s not that bad really. Get some practice in at home before you have to start dealing with unfamiliar roads and signs.

Size matters

While they may be poky compared to what you normally drive, ‘economy’ cars are generally roomy enough for two people who are travelling light. They won’t have much ooomph for overtaking and you’ll have to drop a gear or two to get up steep hills but when it comes to parking, you’ll appreciate the merits of a small vehicle. If you’re venturing into tiny villages and country lanes, or even the historical parts of bigger cities, a dinky car is a definite advantage.

My advice: ‘Mini’ or ‘economy’ cars will usually be the cheapest to hire. Choose the smallest car that can take all your luggage in the boot (trunk). If there are more than two of you and you’ll be doing a lot of driving, look for a compact or mid-sized car for better comfort levels.

Should you hire a car from the airport?

Portugal’s major international airports in Lisbon, Porto, Faro, Madeira and the Azores islands all have car hire companies on site or a short shuttle bus away. You’ll get more choice and usually better deals with airport rentals than in-city locations.

That said, I would avoid driving in Lisbon and Porto if at all possible. The public transport systems in both cities, coupled with cheap taxis, mean that having a car during your stay is unnecessary and is likely to be more of a headache than anything else. Parking is problematic, one way systems and signage can be confusing and local drivers have little patience, especially at rush hour.

Other cities are not so bad and if you have a GPS navigation system and accommodation with parking, having a car should not be a problem and will give you the freedom to explore further afield.

My advice: Plan to spend car-free days in Lisbon or Porto at the beginning/end of your trip then take public transport (or a taxi) to or from the airport/Prior Velho (the off-site location for many car rental companies) when you collect or drop off your hire car.

Possible extra charges when you hire a car in Portugal

Renting a car in Portugal using an online comparison and booking system such as Discovercars.com or Booking.com car rental is easy and generally reliable but make sure you read the terms and conditions carefully to avoid unexpected charges. You don’t want to end up in an argument with the rental company before you’ve even begun your holiday.

Car hire firms employ various methods to bump up their profits but savvy travellers can easily keep these extra costs to a minimum.

Excess waiver insurance

The additional fee I hate most of all is the collision damage waiver (CDW). All car rentals include compulsory vehicle insurance but there is usually a relatively small amount that isn’t covered. In practice, this means that if you have a bump that requires repairs, you’ll have to pay the first €1,000 (or whatever the ‘excess’ or waiver amount is) even if it wasn’t your fault.

If you’ve managed to bag a bargain on the car hire, the extra fee for insuring this relatively small amount could be almost as much as the cost of renting the car! Talk about extortionate.

Rental firms have you over a barrel once you get to their office. You either pay up or take your chances and spend the rest of your holiday fretting about scratches and dents caused by other drivers.

How to get around this sneaky fee: Plan ahead and take out a standalone excess waiver insurance policy that covers you for multiple rentals within a given period. CDW insurance may already be part of your credit card or other policy coverage so check to see whether any of your existing insurance policies cover you.

Important tip: Make sure you have enough available credit on your credit card to cover the excess as the car rental company will place a hold on your card to the value of the excess until you return the car even if you have separate insurance to cover this. If you have an accident, the rental company will take the money from your credit card and you will have to claim this back from your insurer.

Check the rental terms to find out how much this ‘hold’ will be before you leave home and contact your credit card company to arrange an increased limit if necessary. We got caught out by this one time in the UK and because the hold value was abnormally high, i.e. more than Mike’s credit limit, we were forced to take the extra insurance, which cost more than the actual car hire!

Another important tip: Don’t skimp on the inspection. Check that every existing scratch and dent is recorded by the company before you drive off. If possible check for damage in daylight. Ideally, arrange to drop the car off during office hours so you can get them to sign off when you return it. Take photos or a video of the car if you notice any damage.

Fuel fees

When you collect your rental car, it should have a full tank of fuel. The rental company should give you the option of returning it full or empty, in theory to save the time and stress of having to find a petrol station before dropping the car off.

If you choose full-empty, you will inevitably be giving the car hire company free fuel as you won’t want to risk running out of petrol.

How to avoid wasting your money: Make sure you opt for full-full, meaning you only pay for the petrol or diesel you actually use. You can usually filter your search for this option.

Paying for toll roads in Portugal

Almost all Portuguese motorways are now subject to toll fees. Some of them, such as the A1 between Lisbon and Porto, have toll booths where you can simply pay as you go.

Others (known as former SCUT roads) used to be free but the government decided to install electronic tolls and a ridiculous system for collecting fees which has undoubtedly caused more problems than it solved.

What this means for you is that you will either need to meticulously plan your route to avoid passing through any of these electronic tolls (not advisable) or decide how you are going to pay for them.

All car rental companies must offer you the use of an electronic device that registers any toll fees you incur while driving a Portuguese-plated car in Portugal. This is one piece of equipment I think is worth paying for – it should only cost about €1.50 to €2 per day, capped at about €20.

You can opt to prepay your tolls with the rental company, which may mean that you pay a little more than you actually use but for the convenience, it’s worth considering.

The other options are for them to collect the toll fees from your credit card after your trip is over (this is what I would do) or pay the fees yourself at a post office. This manual payment method is complicated by the fact that the post office system takes 2 days to register your tolls so if you are leaving the country within two working days of driving through your last toll, you can’t pay in person.

Tip: If you are using the electronic device, you can also drive through the green Via Verde lanes at the traditional toll booths instead of paying on the spot. This saves you time as you don’t have to stop the car and means you can pay for all your tolls using the same method.

More information about the toll system, including rates and locations, is available on portugaltolls.com

Satnav and GPS

I strongly recommend using some form of GPS navigation system to help you drive around Portugal. You should also have a good paper road map of Portugalwith you for backup and so you can easily see the bigger picture if heading off the beaten track.

Many modern car models have GPS as standard but not all. Car hire companies charge a lot for renting GPS systems, sometimes as much as €15 per day, although there is usually a cap of around €80. Always check before agreeing to rent one.

How to get around this additional cost: If you have a sat nav device at home, you may find it more economical to download a Europe map and bring your device with you. And, of course, you will be used to it’s functions!

Or, if you have access to 3G wifi, use a navigation app like Google Maps on your smartphone or tablet. This is what I do, although there is sometimes a delay or even drop out in the GPS signal so download the maps for offline use before you set off if possible.

Waze is apparently good for driving in busy cities such as Lisbon and Porto.

It’s much easier when there are two of you in the car, one driving and one navigating with technology and old school maps.

Additional driver charges

Some car rental deals include an extra driver. This is not standard and most companies will charge for additional drivers on a daily basis. The rate varies but is usually in the €7-10 range.

What you can do about this: Decide beforehand whether or not you will need more than one driver. If so, take this into account when comparing rental deals between companies. If you can’t get a deal that has a free extra driver, some hire firms will allow you to pay for specific days, e.g. if you are renting a car for 7 days but will only need a different driver on 2 of them, just pay for those periods.

Young drivers

You have to be over 18 to hire a car in Portugal and some companies won’t even consider anyone under 21 (or even 30 for some models of car!). Check age restrictions carefully before choosing your company. I believe all of them charge an additional Young Driver fee for anyone under 25. This usually ranges from €6-10 per day.

What can you do? If at all possible, make sure your driver is over 25 to get a cheaper car. Otherwise, you’ll need to do some serious shopping around to avoid paying more than is absolutely necessary.

Child safety seats

If you’re travelling with children under the age of 12 or shorter than 135 cm, they’ll need a car seat. If you need to hire one, it can cost up to €10 per day per seat. 

How to reduce the cost: It may be worth paying your airline’s extra baggage fees to bring your own car seat(s) with you. If all you need is a booster seat, they can be bought very cheaply at major supermarkets, although that only helps if you are not collecting your car from the airport on arrival.

Cancellation fees

Some companies, including Discovercars.com and Booking.com car rental offer free cancellation and amendments up to 48 hours before the date of hire while others are far less lenient.

Always check the small print for the cancellation policy before you book.

Cross-border fees

Just because Spain and Portugal share a border, that doesn’t mean you can freely drive between the two countries. You must let the rental company know in advance so that they can deal with the insurance and any other requirements. There will be a cross-border fee, which ranges from €40 to €80.

Avoid surprises by checking the ‘Extra Services (payable at counter)’ section of the rental terms (with Rentalcars) and consider whether it’s really necessary/worth it to drive into another country.

What if there’s a problem?

If you have booked your rental car through a vendor such as Discovercars.com or Booking.com car rental and are hit with unexpected fees or anything that doesn’t match your agreement when you pick up the vehicle, contact the company you made the booking with before signing for and taking the car. This will give them the chance to mediate if necessary and resolve the situation. 

You may also like these:

Top tips on your first trip to Portugal.

The N2-The ultimate Portugal road trip.

Day trips from Porto.

Pin these for later

How to rent a car in Portugal. Insider tips for hiring a car in Portugal
How to rent a car in Portugal
Car on road. How To Rent A Car In Portugal And Avoid Sneaky Extra Charges
How To Rent A Car In Portugal And Avoid Sneaky Extra Charges


  1. I am planning a trip to Portugal soon. Need to know if one needs to carry an international license to drive in Portugal?

    1. It depends on your nationality. You’ll need to check the guidelines with your rental company or on the Visit Portugal website.


    1. I think different rental companies may have different age restrictions so you’ll have to check their T&C.

  3. I understand about the CDW when renting a car. I have read several conflicting things about Third Party Liability (TPL). One of the things I’ve read is that TPL is mandatory in Portugal and thus, covered in the car rental fee. Can you confirm if this is true?

    1. Yes, as far as I know. Any rental car comes with basic insurance included, assuming you’ve done it through a reputable company.

  4. Is an international licence necessary in Portugal and Spain for Australian drivers? Will hire car companies require this I.D?

  5. Do you know of any way to file a complaint regarding a car reservation/ rental gone wrong? Details: We booked a Smart ForTwo via Azores Getaways with Hertz at PDL. When we arrived at the counter and presented our voucher, there was no car available and no record of our reservation. The counter attendant did the best she could and offered us a Mercedes Benz for an extra €100. We felt we had no choice but to pay this. Following up now with Azores Getaways and 296 Rent A Car (the actual company that operates under the Hertz name) we are being told that the reservation was sent by Azores Getaways to 296 Rent A Car and 296 Rent A Car is claiming that we chose to upgrade and thus the extra cost. My main goal in following up was to understand what went wrong and where and to help insure this doesn’t happen to someone else. The fact that no one will even apologize and admit their mistake is very concerning. I’m follow up with Hertz Corporate Office, but not sure who else should be notified – a tourism board perhaps?

    1. Hi Kelly, Sorry to hear you’ve had this bad experience and are having trouble getting it resolved satisfactorily. It’s of little consolation but the lack of apology is typical in Portugal. It goes against my long customer service background but I think people avoid doing it as they a) don’t seem to appreciate the difference it can make to the way the customer feels and b) don’t see that it’s possible to apologise for the circumstances without necessarily accepting responsibility.

      These links may help: http://www.which.co.uk/consumer-rights/advice/how-to-complain-about-your-car-hire-company

      And yes, I do think it’s worth letting the tourism board know if they have these companies listed on their websites.

  6. Hi I wonder if an Israeli driving licence is acceptable for driving in Portugal?

  7. Hi Julie,

    Great read!! Thanks for the awesome info! I’m wondering the most up to date info on – if a Canadian citizen would need a international drivers permit to rent a car in Ponta Delgada?

  8. Hi,

    I bought a policy with icarhireinsurance.com last April but I did not need to fill a claim yet. Luckily for me 🙂

    1. That’s the ideal situation 🙂

  9. Hi Julie, would you mind to share your thoughts on something slightly off-topic? Even before reading this blog entry I always bought extra insurance for my car hires abroad, most of the time via RyanairCarHire/Cartrawler/Axa, no hassle, all went well, but the extra we’ve spent wasn’t a money thrown out of the window. Feeling secured always worth it, for us at least.

    Now, for this summer we’re heading to the Canaries/Tenerife. Ryanair car hire was cheeky on the car choice, so used arguscarhire, which happens to use the same Cartlawer provider. Shock came when I’ve been quoted over 90€ for excess insurance. That’s almost 1/3 of the 2wk hire of a Hyundai IX35 via Hertz so it made me think I’ll look elsewhere for no excess car insurance.

    We always buy our annual travel insurance with multitrip.com (and had good experience with them due to an unfortunate theft on one of our previous hol’s in Mallorca, no hassle claim,paid absolutely everything we’ve claimed, etc).

    Via their sister company/site/whatever carhireexcess.com they do offer extra car insurance, almost at 1/3 of the AXA price (cover up to 5kEUR,fire, theft, vandalism,tyre,keys,window,undercarriage,CDW up to 100kUSD). On paper this looks good, but in your/blog reader’s opinion can I get into any sort of trouble thru the pickup/dropoff/hire period in Teneriffe if I pick the extra insurance thru a different channel?

    I’m thinking I should have no trouble under any circumstances, just thought I seek for the opinion of the more experienced here.

    Thanks for your advice

    1. You would need to double-check with the car rental company to be absolutely certain as I don’t know their policies. My understanding is that excess insurance is optional, therefore they can’t force you to take out their crazily-priced insurance on site.

      The only issue I can envisage is that they may still insist on placing a hold on your credit card to cover the excess even if you have insurance with a 3rd party company. In the event of a claim, you would probably need to pay the excess and claim it back from your other insurance company.

  10. Thank you, Julie. I got all the answers in the website you suggested.

  11. Thanks. By the way, you should check-out CarDelMar.co.uk. I think they are better than AutoEurope.

  12. In September we rented a car in Lisbon for a two week trip in Portugal with the device for Via Verde. It is very convenient. Just take the left lane at the toll booth and go. We spent 75 Euro in tolls.
    In June we will visit Portugal by car again and we are worried about not being able to get the device because we will pick up the car in Spain.
    Isn’t there any way of getting the device as we enter Portugal, Julie?
    Thanks in advance for your answer.

    1. Hi Cesar, I assume in that case that the car will have a Spanish licence plate, in which case, the options on this site will apply: http://portugaltolls.com/ I expect the hire car company will offer you a solution but it’s best to know what the possibilities are in advance so you can choose what suits you best.

  13. Thanks. Actually we are often renting cars here. They always try to rent us this device. I wanted to know if it’s mandatory to get it, or if we can pay the electronic only toll online by card?

    1. Hi Oliver, as far as I’m aware, the only other way to pay for electronic tolls for Portuguese registered vehicles involves going to the post office 2 working days after your journey and within 3 days to pay tolls accumulated for the car’s registration number. Simply not possible if you’ve left the country! It’s far easier to use the device.

  14. Is the Via Verde device mandatory if we are going to drive through electronic tolls only roads?

    1. No but you’ll need to find another way to pay the tolls. If you’re renting a car in Portugal, they can provide the device. If you have a foreign-plated car, see your options here: http://portugaltolls.com/

  15. Planning our trip for the end of the month just now. Your car rental tips helped a lot! We’ve decided to take the train for some places and drive some places. This site has been super helpful!

    1. Happy to help, Stacy. Have a great trip!

  16. Hello,
    I would like a clarification on the ‘full-full’ and ‘full-empty’ policies. You mention that ‘full-empty’ is bad because you give them free fuel … wouldn’t it be the opposite?

    Also, is there any way to avoid the credit card to be charged in advance and, if not, when will they give you back the blocked amount? Is there a document to ensure they will do so? We will leave the country after giving back the car so I would appreciate to have a way of being sure about it.

    Finally, this all CDW thing is confusing me: if the company includes CDW they will not take the ‘franchise’? 100% sure?
    How can I know in advance if they will refuse my national company assurance?

    Thank you very much for your tips! Very helpful!



    1. Hi Michele, By returning the car full, you only pay for the petrol you use. If you return it ’empty’, it’s hard to guess how much petrol you’ll need to leave in the car to avoid running out of petrol on the way back to the hire depot. Invariably, you will play it safe and put more in than you need. The only way I can see this full-empty being to your advantage is if you’re not driving far enough to require topping up with petrol.

      As far as I am aware, they do not actually charge your credit card, they just stake a claim on an amount until they are sure you don’t owe them any money, usually when you return the car undamaged. You’d have to check the T&C to be certain about time periods – they may vary between car hire companies.

      As for CDW, if the company includes it but you already have a policy and don’t want to be paying extra for this coverage, again, the only way to be 100% certain s by checking with the hire company. Basically, CDW is an optional add-on insurance to cover the excess levied on an insurance claim. Rental companies make money by charging clients an exorbitant amount for insuring this sum, which may be in the region of €1,000. I don’t usually take out this extra insurance and simply take the risk. I reckon I’ve saved more than €1,000 over the years by not having this extra coverage, at least at the rates charged by car hire companies. If you have an independent policy that covers this CDW amount in the event of a claim, you don’t need to pay for it again through the car hire company. They may, however, insist on placing a hold on the value of the CDW on your credit card, which is what they do when you have no insurance, because they won’t be certain of your insurance coverage.

  17. Hello – we plan to rent a car in Porto. The excess waiver insurance you speak of – where is that obtained? from the rental company?

    1. Hi Nick, If you wait until you collect the car, you will have no option but to forgo it or pay the exorbitant fees that the rental company imposes. If possible, try to take out an independent excess waiver policy from an insurance company in your own country so that you can decline the offer from the rental car company with confidence. You may still need to allow the rental company to place a hold on your credit card to cover the amount but in the unfortunate event of having an accident, you can claim the amount from the independent insurance company.

  18. Hello Julie, thanks for the great information. We are planning on renting a car in Porto in order to travel to Arcos de Valdevez – arriving at Campanha train station and then going to collect the car. We have gone through Expedia to rent from Enterprise. Is it best to rent from a company in Europe from the link you provide? Have been reading many of the forums on Tripadvisor and it has made me weary on renting at all. If the CDW is included, do we need to buy extra insurance? We prefer public transportation, but being that we will be in Arcos were advised to rent a car to get around and travel to Porto/Douro. Thanks for any help!

    1. Hi Janet, If the CDW is included, you shouldn’t have to take out any extra insurance. I should think your booking is sound – both companies are well known and have a good reputation. It is possible to get to Arcos by bus: https://www.rome2rio.com/s/Porto/Arcos-de-Valdevez but that won’t give you any flexibility for exploring, unless you use a guide or taxi.
      Having a car will certainly make it easier and quicker to get to the Douro, too.

  19. Julie, a week or two ago I discovered that I was getting lower quotes for car rentals by following the links to autoeurope on your page, but now the links are gone. Am I going crazy or what?

    1. Sorry Rick, a temporary hiccup. Should be resolved now but if not, here’s the link to AutoEurope PT, just change the country at the top of the page.

  20. Nice to read this article…. Thanks for sharing this article…….

Over to you. Please share your thoughts in a comment.