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. Hiring a car 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 rental car in Portugal.

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 Rentalcars or Discovercars to see what’s available and compare prices between rental companies e.g. Hertz, EuropeCar, Budget and others you may not have heard of. 

You can filter for a specific supplier, location or rating as well as other important features. This is what I do and I’ve had a great experience so far with both Discover Cars and Rentalcars.com.

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.

Compare prices with Rentalcars.com
Rentalcars.com search results
Rentalcars.com search results
Search results page at Discovercars.com
Discovercars.com search results

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 Rentalcars.com 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 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 Rentalcars.com, and Discovercars.com 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 Rentalcars.com or Discovercars.com 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.

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  1. Thank you for sharing these information on renting cars.

  2. Hi, I’ve read that since the UK paper counterpart has been scrapped that a code needs to be supplied to the hire company to check the validity of the driving licence…..is this the case please ?

  3. I can’t say whether or not it would be cheaper but you can get to those places by public transport. Check timetables first to plan your time as efficiently as possible.

  4. Hi Julie,
    Can we travel across Portugal by train and bus and taxi, without renting a car. Reading all the scams of rental car companies there, it just turns me off from renting one. We are coming in September for 3 weeks, is it cheaper travelling by train? We will go to Evora, Albufeira, Liisbon, Nazare, Porto, Coimbra. Thanks so much,

  5. Hello Julie, may be you know. If my driving licence is only 6 months, can I rent a car in Portugal?

    1. I’m not sure if you mean it’s only valid for 6 months or you have only had it for 6 months. Either way, it’s best to check with the rental agencies for specific questions like this.

  6. Julie,
    Your article is titled “How to rent a car in Portual and Avoid Sneaky Extra Charges”..however reading all the advice and reader’s experience as well as my own experience..YOU HAVE TWO CHOICES PAY AN EXTRA $1,000 OR HAVE A HOLD OF $2,500 PLACED ON YOUR CREDIT CARD. There is absolutely no way of avoiding these sneaky charges!!

    The first time we traveled to Portugal we had booked our rental online, and selected waive insurance as we have both travellers and our auto insurance that covers us internationally and we have rented vehicles hundreds of times without issue..so we did not expect any issues…but oh no that’s not the case for Portugal car rental companies. YOU WILL BE HELD HOSTAGE with only two choices if you still want to rent that vehicle. Horrible way to start a vacation…

    Rental companies should have to be more forthright about these hidden insurance charges. It’s time that these hidden clauses are brought to light and force these companies to justify why foreign insurance coverage isn’t good enough, or why is it that the additional coverage is $1,000, when everywhere else it’s about $19/day for insurance?

    Also best advice is to take your cell phones out and video the vehicle inside and out bumper to bumper, both at picking up and dropping off.

    Also prior to leaving, have your own waiver to be signed by car rental place to ensure your deposit is released within 24 hours not 30 days.

    This article brings light to the situation however, there is no whay of avoiding these charges!

    1. John, I think it very much depends on the rental company as to how much they hold on your credit card and you really need to check that when you make the booking so you can arrange an increased limit with your card provider if necessary.

      If you have independent insurance that covers the excess, the rental company will still place a hold on your card but will release that when the car is returned undamaged.

      I have no idea where your $1,000 came from but I’ve stopped using the cheaper companies as they are often the worst when it comes to trying to make money in other, more underhand ways like this ridiculously high hold. Last rental I did in Portugal, the hold on the card was less than €1,000 so it varies. If you turn up at the rental office without sufficient limit on your credit card, then you’re at the mercy of the company, as we found to our cost in the UK once.

  7. Great blog. I read your blog and i get the some valuable information about rent car in Portugal. Very helpful information. Thanks for sharing the great information. Good Luck!

  8. I do not recommend anyone to use DSCAR: from my experience they provide lack of information while you are signing contract and charge you extra afterwards as they have 100 euro deposit of your money. Eventually I had to pay for the transfer of money back to my account as well, what was not mentioned by company`s employer. All and all, they did not answer my emails for weeks when I asked for clarification of a charge they had taken from those 100 euro. Not a good experience at all.

  9. Hi,
    We will be in Portugal Sept 11 – 23 this year and I have really been enjoying your website and blog posts. We will be flying into the airport and traveling directly to Sintra to spend a few days. Our accommodations there have free parking, as well as paid airport pick up available. I have yet to book a car (this will be a driving trip) and am unsure if we should just plan to pick up our car on arrival, pay for a few extra days and let it sit in Sintra while we explore, or if we would be better to take either public transport or airport shuttle to Sintra, then figure out a way to go back to airport to pick up our car or reserve one at a town closer to Sintra. Either way, our final drop off will be back at the airport. (I’m figuring the extra few days of rental charges for the first scenario would be about the same as having different pick up and drop of locations in the second scenario.) Should we be unduly concerned about traffic leaving the airport between 11 – noon on a weekday morning? What would you advise?

  10. Hi Julie, Do you have any opinion or know anything about Payless car rental in Faro?
    I am looking to rent two vans and they have the best price, but I cannot find much info or reviews about them online! Thanks

    1. Hi Daniel, I’m afraid I haven’t even heard of them so can’t help.

  11. amazing, i’m a driver and traveling, i’ve been to Portugal. This is an ideal place for me and if I read the previous article I was able to hire myself a car to explore this wonderful country more. Anyway, I will be back soon on a nice day. Thank you for sharing this very interesting information

  12. Thanks for sharing the article.You solved all my problems. I was scared to rent a car because I heard so many things . I am glad that I read your article . Thanks .

  13. Hi! Thanks so much for the very helpful post! I’m trying to book through the autoeurope website you mentioned and at the end it says the following:

    “We strongly recommend you select an increased coverage option above. If you do not and the driver’s credit card does not include coverage for a rental car, you will be required to purchase additional coverage at the counter in order to pick up the vehicle.”

    I’d prefer to buy a standalone policy as you suggest but this makes it seem like you HAVE to buy increased coverage through them. Do you know if this is correct?

  14. Hi Julie,

    Thanks for such great wealth of info! Like everyone else here, we have a question regarding driving and renting a car while in Portugal! We will be visiting Portugal at end of Sept for 2 weeks! The places we’ll be visiting are (in order): Sintra, Obidos, Batalha Monastery (stop on our way to–>) Aveiro, Porto, Douro Valley and Lisbon! Oh we are so excited!! But at the same thing, a bit stressed!! Please help! Here’s our (4 adults and one toddler) main questions:

    1) Should we drive WHILE in Sintra–as we hear parking can be a huge challenge for these places we plan on visiting(we will visit: Day 1: Just tour around Cascais on day of arrival for walking around and meals. Day 2: Quinta da Regaleira Palace, Palacio Nacional de Sintra, Santurio da Peninha, & Cabo da Roca. Day 3)Pena Palace, Castle of the Moors, & Convento do Capuchos (the palaces of visit can be modify to best suit the best getting-around method).

    2)This question also depends on what we do from question #1. If it’s not advised to drive while in Sintra, then:
    a) How should we get around with those attractions in mind–taxi, bus, etc.?
    b) Where should we rent a car for the remaining tours of Portugal (as we hear there’s no car rentals in Sintra. We plan to end our Portugal trip with 3 days in Lisbon before flying back home)?

    What should we do Julie? Thanks so much for taking the time to read and answer our questions in advance! We really would appreciate giving us insights in this stressful part of the planning!

  15. Hi Julie, I read your site with great interest, obtained Excess Insurance cover from MultiTrip, and used a price comparison site to list Portugal Airport cars. I booked a March 2018 seven day trip, selecting a small car (VW UP), with InterRent, and have been quoted only 7.05 euros for the week! This quote lists Full to Full petrol, CDW, Unlimited Mileage, Roadside Assistance, Theft waiver, Third Party insurance and VAT included (all in writing) .. is this a mistake, or am I heading for massive hidden costs somewhere when I pick up the car? How can it be so cheap?
    Regards, Jim A.

    1. I can see why you’re wondering if it’s too good to be true, Jim. Unfortunately, I can’t answer that. It all seems to be in order and if you can’t find anything suspicious in the T&C, it should be fine. If CDW is included, you don’t even need that separate policy, although I’d double-check that. March is off season so that might be why it’s such a good deal.

    2. Hi Jim,

      Wondering how that car rental deal worked out for you? Were there any hidden costs?

      thanks… planning ahead for Sept 2018.


  16. Probably but you should check the conditions on your credit card, because it depends on those and not the rental car companies.
    What usually happens with third party insurances (which is the case) when a problem occurs, is that the rental car company will still keep the money authorized in the credit card. You can then ask for the credit card company to activate your insurance and reimburse you of the amount paid. Again, check your credit card terms of use for the details on how to operate in this case.

  17. Most credit cards, especially travel related ones cover CDW. Is this adequate in Portugal?


    1. I would think so but expect to have the excess ‘held’ on your credit card until the car is returned safe and sound -see previous comments.

  18. This is one reason I always rent directly with the rental agency. I never use any intermediaries. So far I haven’t had a problem like this.

  19. This is probably not a timely comment but I think it’s important to point out anyway: most cheap car hire contracts do not allow border crossing. Your insurance becomes void as soon as you cross the border. Make sure to read the fine print about this, if you’re planning to rent a car to travel through more than one country.

    1. Good to know. Thanks for the tip, Paulo.

  20. Hi Julie – We are planning a 3 month family trip to Portugal for May-July 2018. Flying in and out of Lisbon (from US). Do you have any advice or information regarding long-term car rental, or short-term lease? I have just discovered your very informative site, so I’m sure your readers will see me asking questions on other topics too! Thank you for this great resource!

    1. Hi James, other than what I’ve covered in this article, I have nothing more to add on the subject of car rentals, I’m afraid. I’ve only ever needed short term rentals but I know that it’s possible to arrange longer ones.

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