A new study of European car hire costs during May half term reveals that prices have not only fallen year-on-year but are now cheaper than pre-pandemic levels.

In 2019, it cost £199 on average to hire a medium compact car, e.g., a VW Golf or Peugeot 308, compared to £190 for the same week this year. In 2022 the cost soared to £344, falling to £280 in 2023 and £225 in 2024, meaning that prices are now 16% cheaper than last year, 32% cheaper than 2023, and 45% cheaper than 2022.

The study by iCarhireinsurance.com, a leading provider of car hire excess insurance, looked at the cost of hiring a medium compact car for a week, from 24 – 31 May 2025, in five destinations (Barcelona, Faro, Larnaca, Nice and Tenerife) with six rental companies, Avis, Budget, Enterprise, Europcar, Hertz and Sixt, and compared these to the same week in 2019, 2022, 2023 and 2024.

Average weekly car rental rates in 2025 range from £77 in Tenerife (£135 in 2024), £120 in Faro (£204 in 2024), £189 in Barcelona (£211 in 2024), £225 in Larnaca (£213 in 2024) and £339 in Nice (£363 in 2024).

The study reveals that optional ‘extras’ bought at the rental desk can significantly increase the cost of hiring a car. In 2025, drivers face average charges of £73 for an additional driver, £71 for a child’s car seat, £85 for a sat nav and £223 for excess protection (including £167 for theft and collision damage and £57 for tyre and windscreen damage). Altogether, these extras can add up to £453, bringing the total cost of a week’s car hire to £643.

While it may be useful to have an extra driver on the rental policy, costs vary from £34 in Larnaca, on average, to £91 in Barcelona.

The most expensive place to rent a sat nav is Nice costing £122 on average, compared to £64 in Larnaca.

A child’s car seat varies in price from £42 in Larnaca, on average, to £87 in Barcelona.

Excess Liability is the amount to pay if the hire car is damaged or stolen, even if it is not the hirer’s fault. The study found that the average excess liability for damage and theft across the study was around £1,600.

Car hire excess protection , which protects drivers from this excess liability, is usually the largest outlay for travellers at the rental desk. Many car rental companies offer different policies, commonly known as super damage waiver (£167 average cost) and tyre and windscreen cover (£57 average cost), with a combined average cost in this study of £224 a week in Europe, which is significantly more than a standalone car hire excess reimbursement policy from a specialist provider, like iCarhireinsurance.com, charging only £33.15* for a week's policy, covering damage, theft, and tyres and windscreen cover. With Annual European polices starting from £41.99*. 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.

Ben Wooltorton, from iCarhireinsurance.com, said: “It’s great to see prices coming down, but it’s important to remember that prices do fluctuate. Many rental companies offer 48-hour free cancellations, so it can be a good idea book your hire car as soon as you can but then check as you get closer to your holiday to see if there is a better deal available."

“The price of extras does vary considerably between providers so if you do need an extra driver, sat nav or child car seat, make sure you check the price when booking so there aren’t any expensive surprises. Considerable savings can also often be made by buying a car hire excess reimbursement policy from a specialist insurance provider, like iCarhireinsurance.com, rather than the excess protection sold at the rental desk.”

*£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.