Will you pay less for car hire this summer? How much a rental costs in 12 popular holiday hotspots in 2025

It is one of the most stressful, time-consuming, and convoluted parts of any summer holiday - and arranging car hire is also an expensive facet of any well-earned trip abroad.

This became an even bigger issue once pandemic-related travel restrictions were lifted, which saw huge demand and a lack of supply of rental vehicles send prices skyrocketing at the peak in 2022.

So, the big question many Britons will be asking as they day dream about cocktails by the pool and strolls along the beach is: will I be paying through the nose to rental a car in summer 2025?

Well, there's some good news...

According to an annual study of vehicle hire prices across a number of popular holiday destinations, car hire costs are likely to be less than you paid last year.

The historical report, compiled by iCarhireinsurance.com, reveals the average cost of week's rental in summer 2025 is £369 - which is around £11 less than a year ago and a massive £283 cheaper than 2022.

We exclusively reveal how much you can expect to pay to book a motor for a seven-day getaway in 12 summer holiday hotspots...

The car hire excess insurer has been monitoring the cost of vehicle rental in the same 12 popular destinations before the outbreak of Covid-19. This makes it one of the key identifiers for the average cost of car hire and whether pricing is rising or falling.

And while 2022 saw the average week-long rental ring in at an eye-watering £652, costs have gradually been on the decline since then.

However, this year's average is still some way short of pre-pandemic pricing, when a seven-day hire of the same 'compact' class of car - think a VW Golf-sized motor - in the 12 destinations was just £310.

This year's report looks at average prices for the peak period of 26 July to 2 August - the first full week after schools break-up for the summer hols.

Averages are taken from six of the biggest rental companies: Avis, Budget, Enterprise, Europcar, Hertz and Sixt.

The best value destination of all is Faro, Portugal, which services the hugely popular southern-coast Algarve region.

A compact model for the busiest week will cost £254 in 2025. This is a third less than last year, when average prices were £375.

Munich, Germany, is the next cheapest option for those who prefer city-based breaks. A Golf-equivalent for a week-long stay is £307, down marginally from £311 12 months earlier.

Another in-demand holiday location where pricing is reasonable is Barcelona, Spain, where a seven-day rental of a family hatchback is £316 - however, this is an increase of £10 on 2024 pricing.

Dalaman in Turkey, famous for its sandy beaches, blue water, and historical sites, is another hotspot where an week rental is £325, down from £360 in the peak period in 2024.

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In contrast, the most expensive place to hire a car for a week is the prestige destination of Geneva, Switzerland, where a compact car will cost holidaymakers £576. This is up £116 on last year, though is almost half the price it was during the 2022 peak (£933).

Rental costs in Crete, Greece is subject to a slight year-on-year increase to £429 in summer 2025, while Nice in France (£399) and Milan, Italy (£382) are also towards the steeper end of the 12 locations but prices are much lower than they were 12 months earlier.

People travelling to the furthest destination in the analysis - to Sydney, Australia - will pay more this summer than they did last, with the cost of car rental down under up by £68 to £365.

For those travelling from overseas to London for their summer getaways, the cost of renting a compact car for a week during the peak holiday period is up from £366 last year to £400 this time around.

Ben Wooltorton from iCarhireinsurance.com, said it is 'encouraging' to see average rental prices falling closer to pre-pandemic levels, though warned holidaymakers to take additional measures to avoid being stung with additional charges.

'Hiring a car is a brilliant way to explore your holiday destination, and with prices stabilising, more travellers will be able to include it in their plans.

'That said, holidaymakers should keep checking car hire prices for potential late deals and avoid unnecessary rental desk extras.

'Bringing your own sat nav or child seat and arranging standalone excess reimbursement before you travel could save you hundreds.'

It's analysis found that adding car hire excess protection increased costs by an average of £189, a sat nav by £72, putting an additional driver on the policy hiked prices by £68, and the inclusion of a child car seat is another £70.

Tyre and windscreen excess cover is also another £53.

In total, these amount to £451, taking the average rental cost to a more difficult to swallow £821.

Savvy holidaymakers should purchase insurance excess cover beforehand, which costs just £3.49 per day or £41.99 for annual European cover - a significant saving on the £189 you'll be stung with at the hire car provider's desk at the airport.

The cost to rent a vehicle soared post-pandemic when travel restrictions began to ease.

This was due to rental firms selling their fleets of vehicles to stay afloat in 2020 when demand hit rock bottom as flights were grounded and people were restrained from travelling overseas.

However, when restrictions were eased and travel was once again permitted, hire car companies were unable to replenish their stock due to the huge decline in new vehicle production.

But now that car makers are back to full production capacity, rental firms have been able to turn over their vehicle fleets as per the pre-Covid norm.