Last Updated on September 1, 2023 by Paige

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Renting a car is a popular way for tourists to explore Portugal, since many of the country’s most scenic villages aren’t accessible by train. While renting a car in this modern country is fairly straightforward, remember that there are a few differences to take into consideration.

Essential Tips for Renting a Car in Portugal

Book from home.

Don’t wait until you get to Portugal to rent a vehicle. It will be cheaper to book your car from the United States.

Pay for your rental in euros.

It may seem convenient to pay for your rental in euros, but Dynamic Currency Conversion is a pricey upcharge. It essentially offers you the choice of being charged in the local currency or your home currency. If you opt to pay in U.S. dollars, the rental car company converts the purchase amount from the local currency on your behalf. But this process is entirely unnecessary, since your credit card company will process the transaction in either currency, and you will pay through the nose for the non-convenience.

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It’s recommended to carry an International Driving Permit.

Getting an International Driving Permit is easy before you leave on your trip. Especially if you plan to visit off-the-beaten-path villages, you may find an IDP, which is essentially a translated version of your license, to come in very handy.

You’ll need cash or a transponder for tolls.

Hit the ATM before you hit the road and get euros for tolls you’ll encounter on Portugal’s roads. Some drivers reported paying over €100 over the course of a week in a rental car. While we usually balk at renting toll transponders from rental car companies, here’s a case where you might want to consider it. The device will allow you to travel through toll checkpoints without stopping, and you may save money in the long run.

Consider opting for the CDW.

Because Portugal has one of the highest accident rates in Europe, you should seriously think about buying the optional CDW (collision-damage waiver) insurance to bolster any coverage your credit card may provide. Always check with your card issuer before a trip to know exactly what your insurance benefit includes.

Automatic transmissions can be harder to find.

Do you know how to drive a car with a stick shift? The vast majority of vehicles in Portugal have manual transmission. If you don’t specifically request an automatic transmission, the vehicle will have a manual transmission. If you need an automatic vehicle, it can be easier to find one at an airport location.

Inspect the car before you drive away.

No matter how excited you are to get behind the wheel of your vacation car, take time to protect yourself from potential false damage claims by inspecting the car and taking note of dings, dents and scratches. Document everything with photos at the time you pick up and return the car.

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Expect steep gas prices.

In Portugal, cars often run on diesel, which is considerably higher than in other major countries. Opt for the cheaper regular grade of diesel instead of the premium one at gas stations. You can also expect to pay a small but regular “gas tax” required by Portugal’s government. A smaller fuel-efficient car will also help you save on the cost of diesel and taxes.

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