Top Tips for Renting a Car in Portugal

Renting a car in Portugal offers unparalleled freedom to explore everything from beautiful wind-swept beaches to historic old towns at your own pace. However, navigating the rental process can be as tricky as the winding streets of Lisbon’s Alfama district. From hidden charges to insurance to security deposits, here’s a guide with 12 practical tips to make renting a car in Portugal as easy as possible.

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We use and recommend Discovercars.com, which is a rental car aggregator site. It allows users to easily search pricing and availability across a variety of rental car companies. A few of the features that we enjoy are transparent pricing (avoiding hidden fees and surprises) and easy options for full insurance coverage.

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Renting a Car in Portugal Highlights

• Do You Need to Rent a Car in Portugal?
• Choose a Smaller Car
• Manual vs. Automatic Transmission
• Understand Security Deposits
• Accepted Payment Methods
• Insurance Requirements
• Fuel Type: Diesel, Gas, or Electric?
• Additional Fees and Considerations
• Via Verde Passes
• Regional Requirements: Snow Chains
• Parking Rules
• Cross-Border Travel and Ferries

1. Do You Need to Rent a Car in Portugal?

Deciding whether you need to rent a car in Portugal depends largely on the nature of your visit and your itinerary. Here are some criteria we recommend using when deciding on renting a car or not:

• If you’re planning to explore major cities like Lisbon or Porto, you might find that public transportation options—such as trams, buses, and metro systems—are more convenient given the challenge of navigating narrow streets and finding parking.
• If you are planning to explore the picturesque countryside, visiting multiple regions, or if you’re keen on having the flexibility to discover hidden gems and secluded beaches at your own pace, renting a car becomes invaluable.
• If staying primarily in major cities, but you’d like to take occasional outings into the countryside, consider whether you can join a tour or take public transport. Alternatively, renting a car for the day could be a good solution.

One solution that we’ve found works well for us is to stay just outside of Lisbon and Porto. For example, we stay in Cascais when visiting Lisbon and in Matosinhos or Foz do Douro when visiting Porto. We rent an apartment with parking, so that we can easily explore the countryside. When we want to explore the cities, we are just a 30-40 minute metro ride away.

2. Choose a Smaller Car

Portugal’s old towns are charming mazes of narrow, cobblestone streets. These can be incredibly hard to navigate in larger cars and campers. Parking spots can be hard to come by in the older areas of Lisbon and Porto, as well as in smaller towns. People get quite creative with finding and making parking spots, making parking a large car very challenging.

We’ve rented a number of apartments, which have had underground parking included. The spiral ramps into the garages, as well as the assigned spots, have been incredibly narrow. For all of these reasons, consider opting for the smallest car that will fit your group and luggage).

3. Manual vs. Automatic Transmission

When renting a car in Portugal, it’s important to consider that most rental cars come with manual transmission. While automatic cars are typically available, they usually come at a higher cost. If you’d prefer an automatic transmission, be sure to reserve this up front. Don’t assume that there will be an automatic car available if you have not reserved it.

Should you rent a car with manual transmission if you are not confident in driving a manual car? Make your decision based on your comfort level with driving a manual car in hilly terrain. While there are some flat areas, much of Portugal is hilly. Don’t underestimate the challenge of this if you are not a confident driver.

4. Understand Security Deposits

Rental companies in Portugal usually require a security deposit in case of damages to the rental car. The amount is typically charged at car pickup, and is fully refundable if there are no damages or violations during your rental period. A few important considerations:

• Always check the rental conditions (see example below from Discovercars.com) to see what the security deposit charges are.
• In Portugal, we’ve seen anything from 200 – 1600 EUR security deposits during our searches. In many cases, the most inexpensive car rentals come with the highest security deposits, and the more expensive rentals come with the lowest security deposits.
• Ensure that you have sufficient free credit on your credit card before picking up your rental car (to cover not just the rental but also the security deposit fees).
• IMPORTANT: as you’ll see in the screenshot below, it is very standard that the deposit block on the customer’s credit card will not be released until 30 days after car drop-off.

5. Accepted Payment Methods

Most Portuguese car rental companies prefer credit cards over debit cards. American Express and certain other card types might not be widely accepted, so it’s advisable to have a Visa or MasterCard. We’ve frequently also seen requirements such as no online credit cards, ApplePay, and GooglePay.

6. Insurance Requirements

Insurance is a critical component of renting a car. While basic insurance is typically included in rental prices, it often comes with a high deductible. If you spend time exploring Portugal’s large cities, such as Lisbon and Porto, you’ll notice that many cars have dings and scrapes from minor fender benders. For this reason (and the risk of a major accident occurring), consider purchasing additional coverage for peace of mind, especially to cover theft or damage to the car.

A few points to consider:

• In Portugal, all drivers are required by law to carry unlimited third-party liability insurance coverage. 3rd party liability is therefore typically included in the price of the rental car (do confirm this each time).
• Collision damage waiver and Theft protection are frequently included, though the customer is responsible for costs up to the deductible. In the example in the screenshot below, the customer would be responsible for up to $5700 in damages in case of an accident.
• Many credit card companies provide some level of car insurance coverage. Do check the details of this prior to reserving renting your car in Portugal. Even if they do cover the costs in full, the customer is normally responsible for paying for repairs up front. The customer will then be reimbursed by the credit card company.

7. Fuel Type: Diesel, Gas, or Electric?

Diesel cars are commonly available and can be more fuel-efficient for long drives. Gas cars are also common. While they are easily filled at gas stations, they are less fuel-efficient.

Electric vehicles are an eco-friendly option, with many charging stations available in cities. However, if planning longer journeys into rural areas, charging points may be sparse.

8. Additional Fees and Considerations

Check the rental conditions carefully to be sure that you are aware of extra charges, as these can accumulate quickly. Some of the additional fees to consider:

• Additional Drivers: Fees for additional drivers,
• Equipment: GPS systems, child seats.
• Young and Old Driver Fees: Drivers under 25 or over 70 may incur additional fees.
• Cross-border travel: Most car rental conditions will list out fees for taking the car into another country. Be sure that the country you are traveling to is on the list of acceptable cross-border crossings. In the example below, this is 63 EUR; we recently were charged 125 EUR for a non-Portuguese border crossing.
• After-Hours Returns: Returning the car outside of business hours may result in extra charges. We often take an early morning flight back from Portugal. Because most rental car agencies don’t open until 6 or 7 am, we either need to return the car the night before or have to pay an extra fee so that they open early. The last time we paid this in Portugal in 2024, we were charged 30 EUR. This will vary depending on the rental car agency.
• One way rental fees can vary significantly, so it’s best to check options across different rental companies.

9. Via Verde Passes

Many rental cars come equipped with a Via Verde transponder, or are available for rent. This device allows automatic payment at toll booths and can also be used for some parking facilities, saving time and hassle.

• Discuss the Via Verde transponder at rental car pickup if you’d like to use this feature;
• Tolls: if you have the Via Verde transponder, simply drive through the Via Verde/Green lane. If you opt to not get the transponder, go through the toll lanes and pay with currency or credit cards.
• For parking lots with entry and exit gates, simply select Via Verde when entering and exiting the lot. If you take a ticket on entry, you will typically not be able to pay with Via Verde when exiting).
• For parking lots with entry and exit gates, simply select Via Verde when entering and exiting the lot. If you take a ticket on entry, you will typically not be able to pay with Via Verde when exiting).
• Typically, the rental car company will reconcile your actual Via Verde costs on rental car drop-off.

10. Regional Requirements: Snow Chains

In winter, particularly in northern regions like Serra da Estrela, snow chains may be compulsory temporarily, based on conditions. If you will be traveling to the northern, mountainous areas from December to March, check the rental conditions to see whether your rental company provides them.

11. Parking in Portugal

Parking in Portugal can be challenging, especially in major cities. Look for officially marked parking areas and adhere to local parking rules.

• Most urban areas have designated parking zones, indicated by signs or road markings—blue zones usually signify paid parking, while yellow or red lines indicate no parking areas.
• It’s essential to pay for parking using meters or digital parking apps where available, during the controlled hours. In many places, parking is paid during weekdays but free on weekends.
• For street parking: Download the Via Verde Estacionar App, and use this to indicate start and planned end times vs paying at the meter. A few big advantages are that you can pay for a fraction of an hour, and that you can extend the time if you are late getting back to your car.
• In smaller towns and rural areas, parking might be more relaxed, but it’s still crucial to respect signage to avoid fines.
• Many Portuguese cities have started implementing stricter policies in historic centers to preserve the area and reduce congestion, limiting access to non-resident vehicles.

12. Cross-Border Travel and Ferries

Many visitors rent a car in Portugal with plans to drive through both Portugal and Spain. Most car companies charge an extra fee for this. They may also restrict or require additional insurance for driving into other countries. If you plan to cross borders, whether to Spain or beyond, check the car rental conditions carefully to ensure that you are aware of possible fees and any restrictions preventing your travel to those countries.

Additionally, using your rental car on ferries (such as Madeira to Porto Santo) may require prior approval and extra documentation or insurance.

Final Thoughts

Renting a car in Portugal can dramatically enhance your travel experience. It gives you the freedom to explore this diverse country on your own schedule. By understanding and preparing for the rental process, you’ll ensure a smooth and enjoyable journey. Remember, the key to a successful rental experience lies in asking the right questions and reading the fine print. Safe travels!

We use and recommend Discovercars.com, which is a rental car aggregator site. It allows users to easily search pricing and availability across a variety of rental car companies. Search for your rental car on Discovercars.com below:

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