A car rental, rent-a-car or car hire agency is a company that rents automobiles for short periods of time (ranging from a few hours to a few weeks) for a fee. It is an elaborate form of a rental shop, organized in numerous local branches, primarily located near airports or busy city areas and often complemented by a website allowing online reservations. There are also third party websites (such as online travel agencies) which compare quotes from the major car rental agencies.

Car rental agencies primarily serve people who have a car that is temporarily out of reach or out of service, for example travelers who are out of town or owners of damaged or destroyed vehicles who are awaiting repair or insurance compensation. Because of the variety of sizes of their vehicles, car rental agencies may also serve the self-moving industry needs, by renting vans or trucks, and in certain markets other types of vehicle such as motorcycles or scooters may also be offered.

Alongside the basic rental of a vehicle, car rental agencies typically also offer extra products such as insurance, global positioning satellite (GPS) navigation systems, entertainment systems, and even such things as mobile phones.

Business models

There are two major types of car rental companies. The first group of companies own their own cars (known as a fleet) and may have agreements with car manufacturers to provide all the cars for that fleet. An example of this type of company would be Hertz or Europcar.

The other type of car rental company operate on a broker model and have commercial agreements with other car rental companies to provide access to their fleets of cars.

Rental conditions

Car rentals are subject to many conditions which vary from one brand to another. The vehicle must be returned in a good condition and must not exceed a maximum driven distance, otherwise extra fees may be incurred. Additionally, some companies set a minimum age for the vehicle driver, which in some cases is as high as 25, even in countries where the minimum legal age to hold a driver's license is much lower. In all cases a valid, current driver's license is required in order to rent a vehicle.

Recent conditions have utilized GPS technology to limit maximum speeds or driving to specific regions. Renewable fuel vehicles are available in certain areas.

The vast majority of car rental companies require the use of a credit card to make it easier for them to trace a person should they attempt to steal a car, or to charge additional fees at will if a defect is later found with the car.

Insurance

It is typical, when renting a car, to be offered insurance as an optional extra at additional cost. There are several types of insurance: Loss Damage Waiver (LDW) - sometimes also referred to as Collision Damage Waiver (CDW) - covers the costs of damage to a vehicle in the event of an accident. In some countries the purchase of LDW covers all costs after an "excess" fee has been paid (e.g. all costs are covered after the first $500). Often a "Super" insurance product may be available which makes this excess amount zero. Liability Insurance Supplement (LIS) - a product often sold in the USA which provides coverage in the event of an accident causing bodily injury or property damage to someone other than the renter and passengers. Personal Accident Insurance (PAI)- covers medical costs and accidental death for the renter and passengers in the event of an accident during the rental. Personal Effects Coverage (PEC) - insures against risk of loss or damage to the personal belongings of the renter (and sometimes the members of the renter's family while traveling with the renter) during the period of the rental. Often the specific coverage offered by insurance products can differ substantially depending on the State or Country in which the car is rented.

Car classification

To allow for a uniform classification and easy comparison of car rental prices, the Association of Car Rental Industry Systems and Standards (ACRISS) has developed the ACRISS Car Classification Code coding system. This describes the size, door count, gearbox type (manual/automatic) and whether the car is air-conditioned, encoded into four letters.