Last Updated on January 9, 2022 by David


Wondering how much California rental car taxes will add to your expenses? When it comes to rental car taxes and fees, California doesn’t crack the top ten states with the highest charges.

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Aside from the 7.25% state sales tax, there’s no specific statewide rental car surcharge. But California has a tourism fee that is by rental car companies at a rate of 3.5%.

California Local and Airport Taxes for Rental Cars

Aside from the state sales and tourism taxes, California cities and localities can levy rental car surcharges. In addition, airports can and do levy all sorts of additional charges, which can often increase the total cost of the car rental significantly.

California and Collision Damage Waivers

There are generally two types of car rental insurance: collision damage (CDW) and liability. Each covers a different scenario.

Let’s say you’re in an accident that damages the rental car. In general, you need damage protection (CDW). A new law in California regarding rental car CDW went into effect in January 2022. Rental car companies are able to charge up to $25 per day for over-the-counter collision insurance. (Previously, collision insurance for economy and compact cars were capped at $11 per day, while intermediate, standard, and full-size were capped at $17).

Most credit cards only provide secondary damage protection. In a nutshell, that means coverage only kicks in after the primary coverage limit is hit. If you own a car, your own auto insurance policy is the primary coverage for collision damage.

The Insurance Gotcha with California Car Rentals

Beyond taxes and fees, rental car customers should know that California has an atypical provision regarding car rental insurance. Unlike in most states, California rental car companies do not automatically provide liability protection as part of the standard rental agreement. (Some companies may provide the minimum primary liability protection to international renters with driver’s licenses that show an address outside the U.S..)

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This means drivers may need to provide their own liability insurance when renting in California. In general, US residents should already be covered by their regular auto insurance but drivers should confirm that they have the minimum level of liability insurance from their own insurance company. If not, renters will need to purchase purchase liability insurance through either the car rental company.