Summer holidaymakers are advised to book car hire early with the option of free cancellation, then keep checking prices as the departure date nears to take advantage of potential savings.

New research from iCarhireinsurance.com, a leading provider of car hire excess insurance, finds that car hire prices have fallen in many European destinations for summer 2026 since the beginning of the year, creating an opportunity for savvy travellers to secure an initial booking now, while retaining flexibility to rebook if prices drop.

Last summer, average savings across Europe¹ amounted to £63 for a week’s rental, with travellers heading to hotspots such as Nice and Crete saving around £100 by rebooking closer to departure.

This year’s early data suggests a similar pattern may be emerging, with prices falling in most destinations, but not all.

This ‘holiday hack’ is possible because many rental companies offer a 48-hour free cancellation policy, allowing car hirers to cancel an existing booking and take advantage of a new deal closer to their holiday.

The latest iCarhireinsurance.com research compared prices for a medium rental car, e.g., a VW Golf or Ford Focus, for a week from 25 July to 1 August 2026 in seven popular European destinations, depending on whether the hire car was booked in January or April 2026. Six rental companies’ (Avis, Budget, Enterprise, Europcar, Hertz and Sixt) prices are surveyed.

Average prices have fallen in Crete (down £40 to £415), Faro (down £32 to £321), Nice (down £25 to £390) and Dubrovnik (down £22 to £364). However, Barcelona has seen a sharp rise of £193, to £440, while Milan is up £17 to £460 and Dalaman up £33 to £388

While the average price across the destinations rose slightly from £379 to £397, much of this increase was driven by the sharp price hikes in Barcelona.

Ben Wooltorton at iCarhireinsurance.com said: “Last year we saw prices fall as we headed towards the summer and this trend seems to be repeating, but there’s no guarantee it will continue. Booking early gives protection if prices rise, and flexibility to benefit if prices fall - just make sure the rental company allows free cancellations.”

Table 1: Average Car Hire Weekly Rental Costs for Summer 2026

Beyond the booking strategy, there’s another significant saving most hirers overlook, excess protection. This is the amount drivers are liable for if the car is damaged or stolen - even if it’s not their fault - and can average over £1,700.

If bought from the rental desk, excess protection costs £208 on average for a week for a super damage waiver and £34 for tyre and windscreen cover – a combined cost of £242. However, a standalone excess reimbursement policy from a specialist provider like iCarhireinsurance.com costs from just £33.15² for a week, or £41.99² for an annual European policy, offering a potential saving of up to £208².

Standalone car hire excess reimbursement policies not only offer significant savings but usually include cover for damage to vulnerable parts of the vehicle such as tyres, windscreen, undercarriage and roof – areas often excluded when excess protection is purchased from the rental company. Renters should note that they will still need a credit card for the rental company to hold the excess as a deposit, as standalone excess insurance reimburses the hirer directly.

“With the cost of holidays adding up, it pays to look for savings wherever you can,” said Ben Wooltorton. “One easy win is buying a standalone excess reimbursement policy in advance, from a specialist provider like iCarhireinsurance.com, which can potentially save you over £200.”

¹ Average car hire costs for summer 2025

² £208 is calculated by comparing the price of the combined average cost of excess protection in the survey, £242, with the price of an 8-day single trip European car hire excess insurance policy from iCarhireinsurance.com, which costs £33.15.

³ £33.15 based on a 30-year-old UK resident buying an 8-day single trip car hire excess policy from iCarhireinsurance.com for use in Europe. £41.99 annual price is based on a UK resident aged between 30-80 purchasing an excess Europe annual policy excluding in-country (UK) cover.