For many travelers in the United States, Costco Travel has become a go to tool for finding cheaper rental cars without much hassle. At the same time, rental car brands from Alamo and Avis to Hertz and National are pushing their own websites and loyalty programs, promising members only rates, upgrades and points. When you are standing at your laptop comparing tabs, the real question is simple: are you better off booking a rental car through Costco Travel or going directly to the rental company’s site?
The answer is not one size fits all. It depends on how you travel, whether you value loyalty benefits, how flexible your plans are, and how comfortable you are managing your own insurance and fine print. For a full overview of how the Costco rental car program works, including pricing, partner agencies and built-in perks, see our Costco Rental Car Program explained guide.
How Costco Rental Car Booking Works Today
Costco Travel operates as a member only online travel agency, with negotiated rates from major rental car companies such as Alamo, Avis, Budget and Enterprise at locations across the United States, Puerto Rico, the U.S. Virgin Islands and several European countries. You must be a Costco member and the primary driver must typically be the member shown on the reservation. At the counter, you can be asked to present your Costco card to keep the discount in force, so the membership piece is not just a technicality.
One of the most practical features of Costco’s rental search is that you can reserve a car with no upfront payment or deposit on most standard bookings. Travelers can lock in a rate and keep rebooking if prices drop closer to the trip, without dealing with change fees. Consumer travel coverage has repeatedly pointed to this combination of no prepayment and easy rebooking as a key reason bargain hunters use Costco Travel to chase better prices on the same car categories that appear on the rental companies’ own sites.
Costco Travel also bundles in a free additional driver for rentals with its contracted brands in the United States. The second driver does not pay the daily fee that many rental companies charge when you book elsewhere. For couples or friends sharing driving duties on road trips, this perk alone can offset a surprising amount of the daily rate difference between Costco and other channels.
Because Costco Travel functions as an agency, the actual rental contract is still between you and the car rental company. Check in, vehicle choice within your reserved class, and any upsells or policy disputes are handled at the counter by the car rental brand, not by Costco. This split also matters for insurance and damage waivers, which are provided either by the rental company, your own auto insurer, your credit card benefits, or an optional travel insurance policy, rather than Costco itself.
Pricing: Where Costco Often Wins and Where It Does Not
In head to head comparisons, Costco Travel frequently surfaces lower base rates than rental companies’ public prices and many third party aggregators, particularly for weeklong rentals and for compact to midsize vehicles. Travel reporters and bloggers that routinely test rental scenarios often find Costco ahead by tens to hundreds of dollars over the length of a trip, even when the underlying cars are from the same major brands and at the same airport locations.
The built in free additional driver is a quiet but powerful part of that value equation. When rental companies charge a daily fee per extra driver at the counter, the true cost of a “slightly cheaper” direct booking can quickly rise above a Costco reservation once you add a spouse or companion who legally needs to be covered to drive. Over seven to ten days, this can erase an apparent saving from a direct or alternative third party booking and tilt the math decisively toward Costco.
There are situations, however, where booking direct can be equal or even cheaper. Rental companies sometimes run targeted promotions or members only rates in their loyalty programs for specific markets or dates that do not appear in Costco’s feed. A status match or elite tier with a rental car brand can include special weekend rates, one way discounts, or pre negotiated corporate codes that undercut third party portals for those particular trips. For elite heavy business travelers, those internal discounts can matter more than Costco’s broad but less personalized contract rates.
It is also worth noting that Costco Travel focuses on mainstream locations and conventional rentals. Specialty vehicles, local supereconomy brands and some city neighborhood locations might not appear in the Costco system at all, while they could be bookable at lower headline prices directly. In practice, Costco’s sweet spot remains standard categories at major airports and popular vacation destinations, especially for leisure trips of several days or more.
Loyalty, Upgrades and Perks When You Book Direct
Booking directly with a rental car company places you squarely inside its loyalty ecosystem. Programs like Avis Preferred, Hertz Gold Plus Rewards, Enterprise Plus and National Emerald Club reward direct bookers with points, status credits and sometimes lower member only rates. Those points can be redeemed for free rental days or car class upgrades, and elite status can bring priority service lines, guaranteed availability or better vehicle choices from a dedicated aisle.
When you reserve through Costco Travel, you often can still enter your rental company loyalty number and earn credits for the rental itself, but the benefits are more limited and can vary by brand and location. Some promotions or elite qualifying bonuses explicitly apply only to reservations made on the rental company’s own channels, not via third party agencies. If your goal is building status quickly or stacking promotional offers, booking direct is usually the safer strategy.
Direct booking can also provide more control over specialized requests and negotiation at the corporate level. Companies with business accounts, for example, may have contracted insurance terms, fuel policies or fee waivers that only trigger on direct bookings under a specific agreement number. Individual travelers might also find it easier to resolve billing disputes or seek goodwill compensation from a rental company when their reservation came straight through the brand’s website or app rather than through an intermediary.
On the ground, elite status from direct focused loyalty can translate to real differences in the cars you drive. At certain airports, higher tier members may bypass the counter entirely and head directly to a row of cars to choose their preferred vehicle within a class, something not always available to third party bookers. While this priority service is not guaranteed and varies widely, for some frequent travelers it is a major reason to keep their rentals within a single brand’s direct system.
Insurance, Damage Waivers and the Costco Angle
One of the most confusing parts of renting a car is deciding what insurance or waivers you genuinely need. Costco Travel itself does not serve as the insurer for rental cars, but it connects travelers to partner travel insurance providers such as Zurich or Manulife, depending on region, which may offer plans that include coverage for rental car damage alongside trip cancellation, trip interruption and medical benefits. These plans are typically sold as add ons when you book a vacation package or certain travel products, and they are regulated insurance products with detailed terms, exclusions and purchase windows.
Separate from those third party plans, many Costco members hold the Costco Anywhere Visa Card by Citi. That card, when used to pay for a rental car and when you decline the collision damage waiver at the rental desk, provides up to a set limit in coverage for damage or theft of the rental vehicle. Recent financial guidance notes that this benefit functions as primary coverage outside the United States and secondary coverage within the country, stepping in after any applicable personal auto policy. It does not, however, cover everything. Bodily injury, damage to other vehicles, and loss of use charges imposed by rental companies can fall outside the card’s protections, which means you need to read the benefit guide carefully and consider your risk tolerance.
Whether you book with Costco Travel or directly on a rental company site, these insurance layers behave largely the same. The real differentiator is how easy it is to add specialized rental car damage coverage during the booking process. Some Costco travel insurance offerings highlight rental damage limits that can be competitive with or higher than what you might be offered at the desk, often at a flat price for the entire trip. In contrast, rental companies sell their own damage waivers and liability products per day, and the combined daily charges can outstrip the base rental rate if you accept everything.
Because U.S. personal auto policies frequently extend coverage to rental cars within the country, and many travel credit cards offer some form of rental car protection, the most cost effective move for many renters is to review their existing coverage before they ever get to the booking screen. Costco itself directs members to check both their auto insurer and card benefits, then decide if they want additional peace of mind via a travel insurance plan or the rental company’s waivers. Booking through Costco does not replace that due diligence; it simply gives you another channel with solid rates where you can then layer the right insurance choices on top.
Flexibility, Cancellations and Customer Service
One of Costco Travel’s strongest advantages over many direct bookings is flexibility. Standard rental car reservations booked through Costco typically allow free cancellation right up until the scheduled pickup time, with no cancellation fees and no prepayment. This makes it easy to book a car early, keep an eye on the market, and modify or cancel when plans change, without tying up a credit card or worrying about getting a refund processed.
Direct rental company policies can vary more widely. Many brands now split their offerings between pay later and pay now rates, with prepay discounts that are cheaper up front but carry stiffer penalties for changes or no shows. A deep discount prepaid deal direct may save you money over a Costco rate on the day you book, but if your trip is uncertain or your flight schedule is likely to shift, those savings can evaporate once change fees or forfeited deposits are factored in.
Customer service is another point of comparison. With Costco Travel in the middle, issues can involve two parties: the travel agency and the rental company. For routine changes before pickup, Costco’s call center agents can generally modify or cancel reservations quickly, and many travelers appreciate the ability to deal with Costco member services. Once you are at the pickup desk or already on the road, however, you are primarily working with the rental brand. Billing disputes, claims about damage, or arguments over fuel charges are resolved under that company’s policies.
When you book directly with a rental car company, there is no intermediary, which can sometimes speed up resolution. Elite members may have access to dedicated service lines or email contacts. At the same time, you lose the leverage of a big retailer advocating for you. Some Costco members have reported that when a rental company problem escalates, Costco Travel can occasionally help nudge the provider toward a better outcome, motivated by protecting the broader member relationship. These experiences vary case by case, but they are part of why many travelers like having Costco as a layer of support.
Which Travelers Benefit Most From Costco vs Direct?
Leisure travelers who rent cars a few times a year, especially families and couples on vacation, tend to get the most straightforward benefit from Costco Travel. The combination of competitive base rates, many locations with a free additional driver, no prepayment, and easy rebooking is tailored to the way most non business travelers plan trips. If you are not loyal to any one rental brand and you care more about total trip cost than about building points or elite status, Costco’s model fits comfortably.
Costco is also particularly strong for members who like simple, predictable deals. Executives and planners who do not want to fuss with corporate codes, targeted email promotions, or the fine print of every loyalty offer can search Costco once, see the contracted rates for major brands, and have reasonable confidence they are close to the low end of the current price range. For those who value time and predictability more than potentially shaving an extra few dollars through aggressive comparison shopping, this is a major appeal.
On the other hand, frequent business travelers, road warriors and rental car enthusiasts may prefer to book direct most of the time. If you rent dozens of times per year, elite status with a single brand can lead to shorter lines, more flexible availability during peak periods, and better vehicles. Those practical perks can outweigh Costco’s broad discounts. Business accounts also often require employees to book through approved direct channels, both for tracking purposes and to ensure that corporate insurance and liability arrangements are correctly applied.
There is also a middle ground. Some experienced travelers use Costco Travel as a rate benchmark. They will first price out a rental through Costco to get a sense of what a good negotiated rate looks like for their dates and destination. Then they check the direct sites of their preferred rental brands to see whether loyalty discounts or promotions can beat the Costco figure once points and benefits are factored in. In many cases, Costco still wins, but having both numbers lets them feel confident in the decision either way.
The Takeaway
When choosing between Costco Travel and booking your rental car directly with a rental company, you are really balancing three things: price, perks and flexibility. Costco Travel often delivers very competitive base rates from major brands, bakes in valuable benefits like a free additional driver at many U.S. locations, and lets you book with no prepayment and easy cancellation. For many Costco members planning leisure travel, that combination makes the warehouse club’s portal the default starting point and often the final choice.
Booking direct, however, still has a strong role, especially for travelers cultivating loyalty status or tapping unique corporate or promotional discounts. Direct bookings are also the clearest path to guaranteed program benefits like priority lines, vehicle choice from dedicated aisles, and special elite guarantees that third party reservations may not fully trigger. For some renters, those operational advantages and the chance to stack points are more valuable than a modest headline saving.
Insurance and protection do not fundamentally change between Costco and direct bookings, but the way they are presented can. Costco’s partnerships with travel insurers and the rental car protections offered by popular travel credit cards, including those marketed to Costco members, mean you must look at your broader financial toolkit rather than assuming the booking channel itself is the key factor. Checking your personal auto policy, card benefits and any add on travel insurance options is essential regardless of where you click “reserve.”
In the end, the most effective approach is to treat Costco Travel as both a powerful option and a benchmark. Price your rental through Costco, note the total including taxes and fees, and then compare that number against any direct rental company offers you qualify for once perks and loyalty are taken into account. If Costco is clearly cheaper and you do not rely on elite perks, book there with confidence. If a direct deal comes close while also advancing your status goals, it might be worth paying a little more. With that framing, the choice between Costco and booking direct becomes less about brand loyalty and more about systematically finding the best fit for your travel style.
FAQ
Q1: Do I need a Costco membership to book a rental car through Costco Travel?
Yes. You must be a current Costco member to book through Costco Travel, and the primary driver on the reservation is generally required to be the member. At pickup, the rental counter can ask to see your Costco membership card to honor the Costco rate and benefits.
Q2: Can I still earn rental car loyalty points if I book through Costco Travel?
Often you can, but it is not guaranteed for all brands or promotions. Many major rental companies allow you to add your loyalty number to a Costco reservation and will credit points for the rental days, although certain targeted bonuses or elite qualifying offers may only apply to reservations booked directly on the rental company’s site or app.
Q3: Is booking through Costco always cheaper than booking directly with a rental company?
No. Costco frequently offers lower or very competitive rates, especially for standard leisure rentals, but there are exceptions. Direct bookings can win when a rental company runs a strong members only promotion, when you have a corporate or discount code, or when you hold elite status that unlocks special prices for specific dates or locations.
Q4: Does Costco Travel include rental car insurance in its prices?
No. The base prices you see on Costco Travel do not include insurance or damage waivers. Coverage typically comes from a combination of your personal auto insurance, any rental car protections attached to the credit card you use to pay, optional travel insurance policies purchased through partners, or the waivers sold by the rental company at the counter.
Q5: What is the advantage of the free additional driver benefit with Costco rentals?
With eligible Costco Travel rentals in the United States, one additional driver can usually be added at no extra daily charge. Many rental companies charge a fee per day for each extra driver when you book through other channels. If you and a spouse or travel partner plan to share driving, this perk can save a meaningful amount over the course of a trip.
Q6: Are Costco Travel rental car reservations prepaid?
Most standard Costco Travel rental car reservations are not prepaid. You generally provide your details to hold the reservation and pay at the counter when you pick up the car. This structure makes cancellations and rebookings simpler and allows you to reserve early without tying up funds on your credit card.
Q7: What happens if I have a problem with my rental car booked through Costco Travel?
Operational issues with the car itself, such as mechanical problems, billing errors, or disputes over fuel or damage, are handled by the rental company because you ultimately sign its rental agreement. For booking related questions or unresolved service problems, you can also contact Costco Travel customer service, which may assist in communicating with the rental provider on your behalf.
Q8: Does booking directly with a rental company give me better cars or upgrades?
It can. Travelers with mid or high tier status in a rental company’s loyalty program often receive priority service, access to special vehicle aisles, or complimentary upgrades that depend on booking directly. While some of these perks may still apply to agency bookings, rental companies typically design their best upgrade benefits around reservations made through their own channels.
Q9: Can I modify or cancel a Costco rental car reservation without a fee?
In most cases, yes. Costco Travel rental car reservations can be changed or canceled online or by phone without penalty up until the scheduled pickup time, because there is usually no prepayment involved. Always review the specific terms for your booking, as specialized rates or locations may have different rules.
Q10: How should I decide between Costco Travel and booking direct for my next rental?
The most practical method is to compare total costs and benefits. Price the same dates and car class on Costco Travel and on the websites of your preferred rental brands, including any member discounts or corporate codes. Factor in perks such as a free additional driver, loyalty points, elite benefits and flexibility. Choose the option that offers the best overall value for your priorities, not just the lowest base rate.