Car rental continues to be one of the most addressed topics on this forum. The confusion surrounding the process of renting a car in Costa Rica seems to be tremendous and many people quite clearly struggle to comprehend the many variables that need to be taken into account. Fear not. Since you are reading this thread, you are already taking steps in the right direction!
While the process seems pretty straight-forward to me, it is just as nebulous to others to the point where they are frustrated, angry, or feel like they are being set up as cash cows.
Much of the confusion has to do with misinformation that has been perpetuated for decades and continues to sow doubt in the minds of those who are new to the process. Additionally, horror stories abound and the Costa Rican car rental industry does its best to offer a multitude of confusing options, terms, and definitions that make it very difficult to compare several quotes.
To round it all off, there are brokerage sites (such as Expedia) that do business with not so reputable companies while selling “insurance” that is not valid in CR, there are outright frauds, there are companies that use ill-defined terms (Budget, I'm looking at you!), and some that make statements that are legally correct but have absolutely no rearing in reality.
So, I'll try to provide comprehensive and accurate information to the best of my knowledge. I might miss something, so don't hold me to it. Some of my statements will be general and some companies may handle a given parameter differently than other, so please keep that in mind, too. Off the top of my head, I know that Adobe structures their insurance scheme much differently than the rest of the providers.
Let's start with a few truisms to keep in mind while researching car rentals:
1.) There are NO good deals to be had. If a deal seems incredibly cheap, you're being had and you will pay a whole lot more than the quote. You cannot rent a car for US$1 a day.
2.) If you let greed guide your decision-making process, you are asking for trouble. We all want to save money but car rentals in a developing nation is probably not the best choice for trying to maximize savings.
3.) Whatever you know about renting a car elsewhere in the world will only partially apply in CR. Pretend that you have absolutely no idea how to rent a car and need to learn from scratch. That way, your assumptions won't lead you astray.
4.) Deal directly with the rental car in Costa Rica. Do NOT use a third-party site like Expedia. Do NOT use a company's corporate site (for example, budget.com rather than budget.co.cr). As a general rule, third-party provider and corporate sites are not familiar with legal requirements in Costa Rica and consequently set you up with a rental that costs more than you anticipated. They will use their small print to inform you of this issue and tell you that you are responsible for additional costs once you are at the rental office. The only exception I have ever encountered is alamo.com. They DO include all costs and are sometimes cheaper than their Costa Rican counterpart.
5.) Read read read about car rentals in Costa Rica. The more you inform yourself, the better your experience will be.
With all that in mind, let's look at some of the issues that are most confusing to people:
Most people wonder what insurance they need to have.
This question seems like it should have a straight-forward answer, but if it did, I wouldn't be writing this!
There are two kinds of coverages that are important in Costa Rica: Liability insurance and Collision-Damage-Waiver (CDW)/Loss-Damage-Waiver (LDW). The two waivers are often used interchangeably – and that's actually alright for the purpose of renting a car since they usually mean the same thing and provide the same protection.
Let's start with Liability Insurance:
Liability insurance covers damages that you cause to other people's property while driving the rental car. If you hit their car, their fence, or their cow, this insurance will cover your costs. This insurance does NOT cover damages that you cause to your rental car. Not one bit!
YOU MUST PURCHASE LIABILITY INSURANCE! - That's the law.
No matter what type of car insurance you have at home, it is not valid in Costa Rica. You cannot use it. Ever. So please erase that thought from your mind! You MUST purchase it from the car rental company in Costa Rica! But why? You ask! Alright, here goes:
There are really two reasons:
1.) When you purchase car (liability) insurance in much of the world, the policy is attached to the person who purchased it along with any other person they add to that policy or that is, by default, added (often immediate family). Whatever car you drive, the insurance stays with you (the person) and thus, you are covered in just about any car.
In Costa Rica, however, insurance is attached to the vehicle – not the person. As long as you drive a car that is insured (and it has to be), you'll be covered. And therein lies the problem with using your insurance policy from back home. As a renter, you have no idea what vehicle you are going to end up with, therefore you cannot possibly purchase insurance for it. Additionally, since car rental companies can only operate the business of renting out vehicles, they need to insure all their vehicles or their business would simply be dead. Thus, the vehicle that you are going to rent will already carry insurance and whatever insurance you have would be meaningless and would also not conform to the legal requirement of insuring the actual vehicle and not the person driving it!
2.) For years, there was a monopoly in Costa Rica and you could only purchase liability insurance from ONE state-owned company called INS. About 15 years ago, the legislature decided to open up the market to other providers. To date, not a single one has been approved to actually provide liability insurance in CR. Thus, no matter what insurance you may have, it means nothing here because it's simply not legal. You get to purchase a time-limited share of the cost of the insurance that company has taken out. There is no law that governs how much of the cost can be pushed onto you and consequently, costs can vary quite a bit. You'll also not get away with looking at the annual cost of insuring a vehicle and then arguing that you should only be charged the amount equal to the days of your rental. That's not how it works – you WILL be charged an amount that is higher due to operating costs, financial obligations arising from non-rented (but still insured) vehicles, and so forth.
Since we got that out of the way, let's talk about actually purchasing liability insurance:
There are lots and lots of policies available that are offered by the various companies. Assumptions can lead to us to believe that one liability insurance is as good as any other – after all, they are all provided by the same insurance company – INS. This is NOT the case. Insurance coverage can vary tremendously.
Here are some policies that can be found while researching car rentals:
100% coverage, no deductible
100% coverage, US$500 or US$1000 deductible.
80% coverage, 20% deductible.
Then there are also difference in the coverage amounts, for example, $50,0000 or $1,000,000.
As luck would have it, those companies that provide coverage with some kind of deductible or other limitation invariably also sell additional insurance that increases the coverage – often in increments until you hit a zero deductible – or that lifts a limitation.
You may consequently see a quote that shows that the cost for insurance with company A is $20/day while company B is only $10/day – a difference that is also reflected in the quoted total. Unless you pay attention, you might assume that all is well and go for the cheaper company. However, and this is a big however, if you were to purchase the additional coverage to get to a zero deductible, you might end up paying $25/day, thereby making your rental more expensive than with company A!
What's more, please take a minute and think about what these deductibles mean. If the deductible amount is $500 and you are involved in an accident, then you will likely be charged $500. Is it worth saving $100 by not getting full coverage but risk being stuck with a $500 bill? This is where you need to assess how willing you are to take risks.
Additionally, pay close attention to companies that provide only 80% coverage with a 20% deductible. If you fail to purchase coverage that reduces your liability to zero, you might end up with a whole boatload of costs. Say you manage to total somebody else's beloved SUV that's currently valued at $50,000 – the insurance you purchased will pay $40k, but you'll be stuck with $10,000! Again, assess what risk you are willing to take.
And while thinking about this, please bear in mind that the cost of vehicles in Costa Rica is MUCH higher than in many other countries – sometimes 100% more, making that $20,000 Camry back home into a $40,000 Camry in Costa Rica...
Thus, when you compare the cost of car rentals, make sure you are comparing apples to apples!
Clear so far? Alright, let's move on to CDW/LDW:
Remember how liability insurance protected you from damages to other people's property? Well, CDW/LDW protect you from most damages to the rental car – like a coconut that fell onto the trunk. CDW/LDW does NOT cover glass or tires!
CDW/LDW is NOT mandated by law. However, every car rental company has a right and a vested interest in protecting their assets. They do so by requiring renters to enter into a contract that basically states that you pay money and they waive the right to sue you for damages to the car. Fortunately, there are several way to meet this requirement – but each comes with it's own caveats that you need to carefully consider:
1.) You can purchase CDW from the rental company. Like I said, you pay them money, they waive their right to hold you financially responsible for damages to the car. If you go that route, you are pretty safe and as long as you stick to their stipulations (don't drive through rivers, for example), you won't have a problem. Since the contract is between you and them, they already know that they won't need money in excess of the rental fee from you.
Now wait a second, you say – why would they want more money than the agreed-upon fee? Easy – you might cause damage that is NOT covered by the waiver (usually glass and tires). If you do, they want to make sure that they get paid for those damages. If you are worried about those costs – well, you can purchase still more coverage. Most people don't, though. Still, you get quite a bit for your money.
Naturally, there are also differences here. Some companies have no deductible, others have one (e.g., $500). If they have one, you can purchase more coverage to reduce the deductible to zero. This can get expensive rather quickly.
Alright, this brings us to the Deposit:
When you rent a car, the rental company will require a deposit. If you purchase the CDW from them, the deposit will be low (like $500). After all, how many windows are you going to damage? Keep this in mind while you read through the next alternative to providing CDW:
2.) You can use a third-party provider. For many North Americans, common credit cards often provide CDW. If you don't have such a credit card, you can purchase world-wide CDW's from other companies. In either case, it is in your interest to bring proof that you already have a waiver. This can be a statement from your provider that has your name and coverage amount on it, for example.
Now, if you go that route, there will be no additional charge – it's either free with your credit card or limited by the purchase price of CDW from some other third-party provider. However, and again, it's a big however, there are several caveats:
a.) you are introducing a middle man. The contract is between you and your credit card bank/provider. It has absolutely nothing to do with the rental company.
b.) if you damage the car, you are personally liable and will have to be reimbursed by your bank/provider after the fact.
c.) since this involves a higher financial risk for the rental company, the deposit will be much higher (for example, $5,000). If you don't have a high enough limit, you cannot take this route.
d.) you MUST stick to all the rules and regulation regarding eligibility for reimbursement set forth by your bank/provider. If you fail to adhere to them, you might be stuck with the cost.
e.) you will not have a deductible, no matter what.
f.) some providers stipulate certain restrictions. Some do not allow off-roading but others do not allow driving on unpaved roads. Costa Rica is full of unpaved roads! In addition, you need to understand what they mean by off-roading (if that happens to be their limitation) and make sure they don't consider driving off pavement as a violation of their terms.
g.) the very minute the car rental company hears that you were involved in an accident, they will attempt to max your card. If you have a low credit limit or only have one credit card, you might be stuck without the ability to use your credit card.
Fine, you say, but are their companies that are good? Are there companies that are bad?
Yes and Yes!
The two most highly regarded companies are:
WildRider (only SJO)
WildRider tends to have older but very well-maintained and reliable cars. Both companies rarely get a negative review (I have NEVER seen a bad review for WildRider) and many of those complaints are due to people not having informed themselves.
Next are companies that consistently get good reviews but don't stay out as much as WR and Vamos:
I've rented with quite a few of them but primarily with Alamo – never had a bad experience.
After that comes mid-field and I won't list them – since they are not in any other category, you'll know. Also, please keep in mind that this is just my personal impression from reading the forum for many years. I might have forgotten a company and if so, I'm sure somebody will bring it up in the comments.
Finally, there's the bottom rung:
Europcar – doesn't really get too many reports on this forum but they did have a time when they seemed to engage in fraudulently posting positive reviews to boost business. I don't appreciate such methods and thus, don't recommend them. I have never used them and cannot report any negative personal experiences with them.
Economy – year after year the solid winner of most negative reports. Allegations run the gamut from deception to bait and switch to made-up damages to outright fraud. I would not use them but some people have and were happy.