The Pros and Cons of Renting a Car Through Costco

There's a reason Costco has developed a cult-like following among those in search of a bargain. The list of daily living expenses that the big box retailer tackles head-on is indeed impressive, and diverse.

Among the most popular of its discount offerings is the rental car program available through Costco Travel, a membership perk that some fans admit is the prime reason they keep paying Costco's annual membership fee year after year.

What's that? You're not familiar with Costco's car rental program? Consider this your primer on all things Costco car rental—the good, the bad, and everything in between.

Goodbye pesky fees

The wholesale corporation (which is the fifth-largest retailer in the world), has serious bargaining power, which is apparent throughout its car rental program.

For instance, the company has negotiated special discounted rental prices for its members with its four participating car rental brands, says Casey Livingston, a buyer for Costco Travel. (Though Livingston was not at liberty to reveal just how significant a discount members get compared to booking rentals on other platforms, travel industry experts say they rarely find car rentals cheaper elsewhere.)

The perks of booking a rental car through Costco also include not having to pay those maddening "additional driver fees" that companies so often charge. While the exact amount of the additional driver fee varies by brand and rental location, it can be anywhere from $10 to $15 per day, says Livingston.

Elimination of that extra cost can quickly translate into meaningful savings, says budget lifestyle expert Andrea Woroch.

"Comparatively, if you book directly through Avis, you'll pay an additional $13 per day, per additional driver in most U.S. states," says Woroch. "Their maximum additional driver fee for a rental period is $65."

It's also worth noting that there are no cancellation fees when using Costco's car rental program, meaning you have more flexibility to change your plans as needed, says Woroch.

Side-by-side price comparisons

Another popular feature of Costco car rental is its side-by-side price comparison format, which allows consumers to assess the spectrum of rental prices quickly and easily. As helpful as this feature is, however, it's still a good idea to do your homework before making a final selection.

"Costco typically has the lowest price on car rentals, but it's important to compare prices across other sites to confirm you're getting the best available rate," she says. "I like using CarRentals.com, since it provides price comparison for most popular car rental companies all in one place. I then compare those prices with Costco to see where I can save the most."

Steve Sibley, president of Red Ventures and also The Points Guy, says Costco's pricing is also very transparent. In other words, there are no hidden fees.

"They show the price with everything included, so it's actually what you pay," says Sibley.

Limited partners

As already mentioned, Costco currently partners with four car rental companies: Alamo, Avis, Budget, and Enterprise. The limited selection can have downsides.

"You know you're working with top options. However, there are so many smaller rental car agencies these days, that you could miss out on bigger savings if you don't check all options before booking," says Woroch. "For example, you may be able to find a better rate with Thrifty, Dollar, or Payless."

Recently expanded car styles

While its brand partners may be limited, Costco expanded the car categories available to members in mid-July, in response to an uptick in demand for vehicle styles that were not previously available, says Costco Travel assistant vice president Chris Hendrix.

In addition to typical sedan rentals, consumers can now also rent hybrids, pick-up trucks, Jeeps (both two-door and four-door), large luxury SUVs, compact SUVs, sports cars, premium crossovers, and electric vehicles.

Additional ways to save on car rentals

Of course, renting through Costco is merely one approach to saving money on a vehicle when traveling. Woroch also suggests comparing prices from different car rental pick-up locations to score a deal.

"Sometimes car rental prices are cheaper at a city location rather than an airport pick-up. That's because demand is usually higher at the airport car rental office," she explains. "If you have a friend or family member who can pick you up or your hotel offers a free shuttle, you could find a car rental office close to where you're staying and potentially find cheaper car rental options."

Alternatively, taking an Uber or a taxi to a non-airport car rental location may not cost too much, and could end up helping you obtain a cheaper rental, says Woroch. Using a credit card to book your car rental may also shave off some of the overall rental cost.

"In most cases, a credit card provides some sort of extra protection when renting a car, such as car insurance, which means you can skip the additional insurance add-on offered at the rental counter," says Woroch.

Finally, don't assume the smallest vehicle is always the cheapest. Car rentals prices are driven by supply and demand. Therefore, a smaller economy car may end up costing the same or even more than a mid-size sedan or even a small SUV, if inventory for economy vehicles is low.

"Always make sure to compare all sizes across all rental car agencies to find the best deal," says Woroch. "Sometimes, you can even get a free upgrade. If you book the cheaper smaller car, just ask at the rental counter if they have any larger options, and they may be able to waive the upgrade fee."