You would have thought that Costa Rica was no different to any other country when it comes to renting a car. Before reading up about it, we had no idea that there’s a huge scam going on involving both rental car companies and booking agents, which can end up costing you hundreds of dollars.
Once you do a bit of research, you realise that it’s not just something that happens with a few unscrupulous companies, unfortunately it’s much more widespread than that. In both Google reviews and Facebook groups, we read story after story of tourists arriving, only to find that the rental car company they had booked with had completely scammed them and left them with the choice other than to pay the exorbitant additional costs, or have their holidays ruined.
So we thought we’d wade in and tell you what to look out for and how to give yourself the best chance at avoiding Costa Rica’s unfortunate rental car scam.
What is the rental car scam in Costa Rica?
The insurance scam
The big scam in Costa Rica revolves around insurance - you know, that part of the contract you gloss over because it’s in the small print and you don’t really understand what it means. The scam revolves around two types of insurance normally included in the price of your car rental: third party insurance and the collision damage waiver, as well as the excesses involved.
Like the majority of the world, third party insurance is legally required for all cars in Costa Rica and can only be bought from a Costa Rican company (essentially a Costa Rican car hire company).
Collision damage insurance (or a collision damage waiver for rental cars) is also legally required, but doesn’t have to be bought in Costa Rica - more on that one later.
When you hire in most countries, these two insurance policies come as a part of the upfront package. However, the scam in Costa Rica is to withhold this from your booking cost and to spring it on you at the check in desk.
We’ve seen these extra fees amounting to as much as USD $70 a day extra, likely much more than your daily rental fee. You’ll even find this happens with multinational companies you have heard of and trust.
It doesn’t stop there, as even getting all your insurance included can lead to a hidden sting.
The third party insurance scam
As we learned in Costa Rica, not all third party insurance policies are created equal. We were alarmed to find that it is pretty common for you to have paid for a car with third party insurance included, only to find that the paperwork has a mysterious “20%” liability on it. Yes, some car rental companies will demand that you take on 20% of the liability, even when you have purchased their insurance - something we have never seen anywhere else in the world.
We don’t know the exact laws and rules in Costa Rica, but in the majority of countries, third party claims in an accident are the highest costs. For example, in the UK if you are responsible for crashing into a bus, your insurance company will have to cover the cost of the damage and medical bills for all those involved. So you can see how the costs can mount up.
However, we can’t say that the third party costs in Costa Rica ever get this high, but taking on 20% of the cost of the claim is scandalous. The alternative is another excess - the one we booked with said it would be up to $1,500 extra, and could be reduced to zero with (you guessed it) purchasing an excess reduction policy from them.
What makes this even worse, is that you only find out about 20% liability scam when you’re handed the paperwork at the check in desk.
The dilemma
What makes the scam a huge problem is that there is a big demand for car rentals in Costa Rica, so many companies sell out. By the time you have found out about this scam you have three options:
1) Pay up for the additional insurance
2) Pay the same or more with the few companies left (who could also be running the scam) or
3) Travel around Costa Rica on public transport, or with some pretty pricey drivers - which really curtails your freedom, especially if you have limited time in the county.
So how do you avoid it? Well, here’s our tips to hopefully help you avoid the scam, and get a rental car for a reasonable price.
How to avoid the insurance scam
Here’s a quick checklist to consider before booking any rental car (we’ve elaborated on each point below):
1. Know what you need
As we said earlier, all cars in Costa Rica need two insurance policies:
Third party insurance
Collision damage waivers.
Whilst you have to get the third party from the car rental company, technically you don’t have to buy the collision damage waiver from them. Whilst this policy is also mandatory, we’ve read that you can buy your own insurance policy to cover this. However, we don’t recommend this as a lot of rental car companies will make your life very difficult if you don’t take theirs (if it isn’t included before you booked).
Many companies will find a way to reject any insurance that you have bought. The reality is that the rental car companies have the right to reject giving you a car with little to no excuse, and they will happily stand firm until you buy the policies they tell you to.
To avoid all this hassle, we recommend booking a rental car where it clearly states that both insurance policies are included in your package.
2. Scrutinise the comparison sites
Once we knew about the insurance scam and what to look for, we were really surprised to see that often the comparison sites can make it hard to know what’s actually included. Here’s what to look out for when you use a comparison site:
Firstly, if it looks too good to be true, it is a scam. If you see a price of $10 USD per day for any car, it is very likely that you will be met when picking up the car with a whole list of additional fees. Costa Rican car hire is not cheap and no one is actually going to hire you a car for that low a price., even in the rainy season.
Secondly, do not book anything until you clearly see what is, and isn’t included. Look through all the information you are served and find the part that relates to third party and collision damage waivers. If they’re not there, don’t book. I know this is painful - especially if you’re looking through a lot of results - but this will hopefully stop you getting scammed.
3. Read up on the car hire company and then call them
This is a tricky one, because as soon as you start researching, you inevitably find out that most rental car companies in Costa Rica have terrible reviews. However, we recommend digging deeper to find out what the complaints are about.
The best way to do this is to look at the reviews on the comparison sites (many have ratings and detailed feedback on each company), Google reviews and anywhere else you can find them. Be aware that 90% of people who review, tend to do it because they’ve had a bad experience. But if you see a deluge of bad feedback, all happening within a short space of time, then you know there’s a problem. The key is to read what the actual problem is.
If you see a recurring theme of being charged insurance they thought they had at the check-in desk, then you may want to avoid them. If there are no qualms about the insurance policies in the reviews, we still recommend getting in touch to check their policy on the third party excess - remember you want to avoid that 20% liability!
It is worth noting that the reason many car rental companies get bad review scores is because a lot of the rental cars in Costa Rica are old, beaten up, or both. There are a lot of companies that will make it look like you booked a shiny new car and then give you a car that is 15-20 years old and has 200,000 kms on the clock.
If this is important to you, then do a quick search for the model on the listing, and quite often you’ll see the car is no longer being manufactured (we found out that there aren’t many new Toyota Rush’s in the rental car market), but we weren’t personally worried about that.
From the reviews, you can normally gauge how scammy the company is. However, if you have an agent who guarantees the insurance policies, then even if the company has bad reviews, you should be ok.
4. Book a car with free cancellation & check your email confirmation
This one is important to negate the next problem - if you’re booking through an agent, make sure you book a rental car with free cancellation (up to 48 hours before pickup). We chose to do this after my anxiety over the scam and I’m glad I did as it saved us a lot of grief with our original booking.
When looking for a car, the comparison site said that it included all the relevant insurance. Satisfied, I booked the car….. only to find that the email countered that. You can click on the images below to zoom in and read the contradictions.
When I checked the small print of the email, I was shocked to see “The car rental company will offer you: third party: $45 per day, CDW $25 per day”.
To my surprise, when I emailed the comparison site, they apologised for the confusion, but stated that these were additional costs and that it was a mistake on their website…..
Luckily I was able to cancel for free, but it taught me a valuable lesson: check everything!
5. Book with a credit card
We did hear about people getting to the check in desk and the fees were so high they no longer wanted to take the car - outside of the free cancellation period. If the booking said insurance was included and it wasn’t in reality, then the credit card company will usually cover the cancellation fee, however you don’t end up with a car, so it’s still far from ideal.
Other things to know about renting a car in Costa Rica
The “local fees & tax”
Another scam that rental car companies practice is not including some mandatory fees and local tax in the price you are quoted, even if you have a booking saying “What you need to pay at pick up: $0”. Then you turn up to find you need to pay an additional 13% in tax and maybe some other fees too.
This scam seems pretty hard to avoid, as most comparison sites and companies caveat that “local costs & taxes may not be included” somewhere in their small print. One time we had to pay the tax, another time we didn’t, so it’s a lottery. We recommend asking the agent and the rental car company before you arrive what costs to expect on arrival, but be prepared that you may have to pay the taxes.
Survey the car closely and take time to snap a lot of photos
Due to the scammy nature of a lot of companies, we highly recommend taking time to closely look at the damage on your car before you drive off. Take as many pictures as possible as evidence of the damage, and make sure you tell the member of staff about anything not marked on the paperwork.
We take a lot of photos and claim absolutely everything we can as damage: any mark, scratch, scuff, dent or anything that doesn’t make the car look brand new. It’s rare that the company will challenge anything you claim as damage before you drive off.
Check their policy on damage, as some companies will charge you for literally anything (including returning the car dirty) and some will allow fair wear and tear, and even scratches up to the size of a coin. It’s best to reduce your risk and take hundreds of photos and point out everything you can, no matter how small. If you get the car especially dirty, it’s better to clean it yourself than pay their cleaning fee.
This leads onto the next point.
Get rental car excess insurance before you arrive
Yes, another insurance policy, but this one will help reduce your potentially liability. The car rental company will often offer you a zero liability insurance for $30+ USD per day, but you can often buy a much cheaper policy online, or even get one included with a credit card or travel insurance policy.
Either way, this will shield you from the hefty excesses you have in Costa Rica, which can be in the thousands of dollars. You will still have to pay for the damage yourself, but the insurance policy should reimburse you.
The contracts can be ridiculous
This last part isn’t a scam, but it’s something you should be aware of: the rental car policies for some companies are just ridiculous and have incredibly inflated charges if something goes wrong. Technically it’s not a scam, because if nothing goes wrong, you pay nothing. However, many car rental companies will transfer costs for almost anything onto you, and there’s nothing you can do, because you can’t see these policies in advance and by now it’s too late.
Many companies will not include damage to tyres, windscreens, under carriages, roofs, wing mirrors and the vast majority of the car in the insurance you paid for, and many will include hefty charges for lost keys and towing for accidents that aren’t your fault. Our agreement even had a fixed cost of $200 a day for extending the rental (despite having originally paid only $40.50 a day).
We were the victim of this, and by the time we had got to this point realised that there was little we could do except be super careful to avoid any accidents, damage or losses. Hopefully your rental car excess insurance will cover you in these eventualities.
You can see some of the inflated and ludicrous charges below.
You can save money by hiring for longer
This trick is for those who are flexible with dates, but we learned when searching for a rental car to keep changing the length of time needed as well as the dates. Here’s what happened to us: we knew we wanted to explore Costa Rica for a month, but no matter how we did it, the price for 30 days kept coming up as over $3,000 USD or $107 USD per day.
It wasn’t until we tried adding two days that everything changed, and we suddenly got a price of $1,296 USD or $40.50 USD per day. By booking for 32 days we suddenly found a company that gave a big discount. However, some companies will charge you extra money for handing it back early (we saw a company charge $50 per day you handed the car back earlier than the contract stated), so don’t book a month and use it for a week!
Of course this situation may not be possible for everyone, but it shows that it can pay off to test different dates and lengths of your car rental if you are lucky enough to have that flexibility.
Don’t let this put you off!
Whilst securing a fair rental car can seem like trying to navigate a minefield, we don’t want this to put you off independently exploring Costa Rica. It is possible to avoid the scams and get a great deal on your car hire, but it pays to know what you need to look out for.
Having a car will enable you to set your own timetable and access all kinds of gems you just wouldn’t be able to get to otherwise. We saw it as an invaluable part of our Costa Rica experience.
How to find a rental car in Costa Rica
Firstly, we recommend searching for pick ups at San Jose International Airport (it can sometimes come up as Juan Sanatamaria Airport or Alajuela). This has the biggest selection of rental car companies, some of which are in the airport, and some are a shuttle bus away. You can look at other places such as Liberia, La Fortuna or other tourist towns, but we found the prices were substantially higher.
We use RentalCars.com, as they present a lot of the key information in the search results before you even click. As we’ve mentioned above, this is particularly important for avoiding scams in Costa Rica! You can see below that the listings show important aspects such as free cancellation, unlimited mileage and a review score of the company that are offering the car. But again remember to check the fine print in your conformation email to make sure it matches up.
From here, click on the Important info tab -> full rental terms and then included in the price (and also what’s not included). Here you’ll find out how scammy the company are. Hopefully you’ll get something like the screenshot below!
Then click book and make sure you read that confirmation email! As we mentioned above, with free cancellation you can always cancel and try again with another company rather than lose your money.
You can check the latest rental car prices by filling in the boxes below.
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