Renting a Car in the USA: Insurance, License, Tolls and Traffic Rules

Renting a car in the USA is straightforward for German travelers as long as three things are in place: a genuine credit card in the main driver's name, a valid German driver's license (ideally together with an International Driving Permit) and an insurance package with collision cover without deductible plus high supplemental liability. The minimum age is usually 21, and drivers under 25 pay an extra daily fee. An all-inclusive package booked from Germany is usually the easiest to compare and often cheaper.

Our overview Traveling to the USA for the first time only touches on rental cars briefly. This guide goes into depth: insurance codes at the counter, deposit, age rules, one-way rentals, tolls, fuel, traffic rules and what to do at a police stop or after an accident (as of November 2026). It is non-binding guidance, not legal advice. Your rental agreement and the laws of the state you drive in are what count.

Renting a car in the USA: book from Germany or on arrival?

You can reserve directly with a rental company in the USA or book through a broker or rental office in Germany. The German consumer advice center (Verbraucherzentrale) recommends booking from Germany where possible: extras cost more on site and are often unavailable at short notice. Another advantage is that a German broker contract is governed by German law, and complaints can be handled in German.

The real difference lies in what the advertised price includes. US rates booked directly often cover only the vehicle and the state's minimum liability insurance. Insurance, additional drivers, taxes and airport surcharges are added at the counter. An all-inclusive package from Germany bundles the key components. Typically included are:

• collision and theft cover without deductible (CDW/LDW, see below)
• supplemental liability, for the USA often with cover of around USD 1 million
• unlimited miles
• local taxes and airport fees
• depending on the package, an additional driver, a first tank of fuel or a navigation device

Still read the terms carefully. Collision cover does not always include tires, glass, underbody and roof; the Verbraucherzentrale recommends protection that covers these parts and stone chips. Also look for free cancellation until shortly before departure.

What insurance do I need for a rental car in the USA?

At the counter you will quickly hear four or five abbreviations. They stand for very different risks. Two of them really matter: protection for the rental car itself and liability for damage you cause to others.

CDW/LDW: protection for the rental vehicle

CDW (Collision Damage Waiver) or LDW (Loss Damage Waiver) is usually not an insurance policy in the legal sense but a waiver: the rental company agrees not to hold you responsible for damage to or theft of the car. Without CDW/LDW, many states allow the company to charge you up to the full value of the vehicle. Make sure the waiver applies without a deductible. Rental companies often sell separate add-ons for tires and glass or roadside assistance.

Liability: state minimums versus supplemental liability (SLI/LIS)

Each state sets its own minimum liability insurance, and these amounts are very low by German standards. California, for example, requires only USD 30,000 for injury to one person, USD 60,000 for injury to several people and USD 15,000 for property damage (California DMV). After a serious accident involving a hospital stay, that is nowhere near enough, and you are personally liable for anything above it.

That is why supplemental liability exists, called SLI (Supplemental Liability Insurance), LIS (Liability Insurance Supplement) or ALI depending on the company. It usually raises the cover to around USD 1 million, which is considered a sensible minimum. For rental cars abroad, the Verbraucherzentrale generally recommends much higher cover of EUR 50 or 100 million. If you want that, you can buy a separate top-up policy (in Germany often called a "Traveller-Police") that increases the liability cover of a rental car worldwide. Check the terms, as benefits vary by provider.

PAI and PEC: usually optional

PAI (Personal Accident Insurance) pays benefits for injuries to the driver and passengers, while PEC (Personal Effects Coverage) replaces belongings stolen from the car. Both often overlap with cover you already have. Medical costs are covered by your travel health insurance, which is essential for the USA anyway (see our guide to health insurance for the USA). Luggage may be covered by a baggage or household contents policy. The Verbraucherzentrale considers passenger accident cover necessary only in exceptional cases.

Beware of credit card cover: Some credit cards include rental car protection. It usually applies only if you paid for the rental with that exact card, and it often covers damage to the vehicle but not liability. Get the terms in writing before you travel and before you decline CDW at the counter.

Why is a credit card mandatory, and how high is the deposit?

Without a credit card you will generally not get a rental car in the USA, even if the rental is prepaid in Germany. At pick-up, the company places a deposit (a "hold") on your card to cover damage, missing fuel, tolls or tickets. According to the Verbraucherzentrale, deposits range from EUR 250 to 3,000 depending on the company. Three points matter:

• The card must be in the main driver's name. A partner's or company card without your name will not do.
• The credit limit must cover the deposit and your travel spending at the same time. The hold stays in place until after the return and is often released only several days later.
• Many companies do not accept debit cards (even with a Visa or Mastercard logo) or accept them only with extra checks. Do not rely on one.

Our guide Paying in the USA explains card types and foreign transaction fees.

Minimum age for rental cars in the USA: what applies to young drivers?

Most major companies rent cars in the USA from age 21. Drivers under 25 almost always pay a daily young driver fee (also called an "underage surcharge"). Depending on the company and location it is often between USD 20 and 40 per day and can make a rental much more expensive. Young drivers are also frequently barred from larger SUVs, sports cars and luxury classes.

Two states go further: in New York and Michigan, rental companies are generally required by law to rent to people aged 18 and over. They may still charge an age surcharge, which is usually considerably higher for 18- to 20-year-olds.

For all drivers: everyone who will drive must be listed in the rental agreement. If an unlisted person drives, the insurance cover lapses, the Verbraucherzentrale warns. Many companies charge extra for additional drivers; some all-inclusive packages already include one, often the spouse or partner.

Driver's license and International Driving Permit: what do I need?

As a tourist you can generally drive in the USA with your valid German license, but each state sets its own rules. According to the US government site usa.gov, not every state requires an International Driving Permit (IDP). It must be obtained before your trip in your home country, because the USA does not issue IDPs to foreign visitors. Rental companies may also ask for one.

Germany's diplomatic missions in the USA put it this way: German licenses are legally only "tolerated". An IDP is generally recommended in addition and is even mandatory in some states. The background is that Germany and the USA belong to different road traffic conventions. The German IDP under the 1968 Vienna Convention, presented together with the EU card license, is usually accepted as a courtesy.

How to get an International Driving Permit in Germany:

1. Find the right office: It is issued by the driver's license office (Führerscheinstelle or Fahrerlaubnisbehörde) where you live; in some cities, such as Berlin, the citizen service offices (Bürgeramt) handle it too. Automobile clubs do not issue it.
2. Bring your documents: ID card or passport, a current biometric passport photo and your driver's license. If you still hold an old paper license, you may need to exchange it for a card license first.
3. Pay the fee: usually around EUR 15 to 20; in Berlin, for example, EUR 15.
4. Collect the permit: it is usually issued on the spot. It is valid for 3 years, never longer than your national license, and cannot be extended.

Always carry both documents when driving, because the IDP is valid only together with the original license. You also need your passport to pick up the car.

One-way rentals and crossing into Canada or Mexico

Many road trips do not end where they start, for example Los Angeles to San Francisco or Miami to Orlando. With a one-way rental you return the car to a different location, and companies charge a drop-off fee for it. The fee depends on route, season and car class and ranges from nothing to large sums, especially across state lines. Compare the total price including the one-way fee and have it shown at booking. Sometimes a loop back to the starting point is cheaper than any return flight.

Driving abroad is a special case. Whether you may cross the border is determined solely by your rental agreement:

• Canada: Many companies allow it, often only with advance notice and for certain vehicles. Get the permission in writing. Canada's eTA is required only for arrivals by air.
• Mexico: Many companies prohibit trips to Mexico or allow them only from border locations with additional Mexican liability insurance. US policies generally do not apply there.
• Returning to the USA: At a land border, German citizens also need a valid ESTA or a visa. A side trip to Canada or Mexico does not reset the ESTA's 90-day period, as explained in ESTA or visa. For what to expect at the border, see US entry: CBP and customs.

Tolls with a rental car in the USA: E-ZPass, SunPass and Toll-by-Plate

There is no nationwide highway toll in the USA, but many bridges, tunnels, express lanes and some highways charge tolls, especially in the Northeast, Florida, Texas, Illinois and California. More and more roads are cashless: there is no booth, and tolls are collected electronically in one of two ways:

• Transponder: A small device on the windshield pays the toll automatically. The best-known system is E-ZPass, which according to the E-ZPass Group works in 20 states, now including Florida's Turnpike and the Central Florida Expressway Authority. Florida also has SunPass, California has FasTrak.
• Toll-by-Plate: Without a transponder, a camera photographs the license plate and the bill goes to the registered owner, which for a rental car is the rental company. It passes the bill on to you, usually with an administrative fee.

That is why most companies offer a toll program. A common model is a flat fee per rental day plus the actual tolls, sometimes capped per rental. Check whether the fee applies to every rental day or only to days with toll usage; otherwise, on a long trip with a single toll bridge, the fee can be many times the toll itself.

How to avoid toll traps:

1. Check your route: Plan whether and how often you will use toll roads. Navigation apps can avoid them.
2. Read the terms: Ask at pick-up how the toll program bills and what the daily fee and cap are.
3. Ask about the transponder: If one is installed, ask whether it is active and how to deactivate it if you do not use the program.
4. Check direct payment: Some toll operators let you pay a plate-based toll online yourself within a few days. Ask whether your rental company allows this.
5. Watch your statement: Toll charges often appear on your credit card weeks after the trip, so keep your rental agreement until then.

Fueling up in the USA: prepaid fuel, ZIP codes and gallons

Gasoline ("gas") is sold by the gallon. One US gallon equals 3.785 liters, so divide the pump price by just under 3.8 to get the price per liter. For most rental cars, the cheapest grade, "Regular", is fine.

At pick-up you will often be offered prepaid fuel: you pay for a full tank in advance and may return the car empty. This only pays off if you actually return it nearly empty, since unused fuel is not refunded. A full-to-full policy is usually cheaper. If the company refuels the car for you, it costs much more than at a gas station.

Many pump terminals ask for a ZIP code (US postal code) to verify the card, which often fails with a German card. In that case, go inside and pay at the register first ("prepay"): name your pump number and an amount, or leave your card.

Which traffic rules differ from Germany?

The basics are similar, but some differences surprise many visitors:

• Right on red: Turning right at a red light is allowed almost everywhere after coming to a full stop at the line and yielding to pedestrians, unless a "No Turn on Red" sign prohibits it. In New York City it is generally prohibited unless a sign allows it.
• 4-way stop: If every approach has a stop sign ("All-Way"), the driver who stopped first goes first. If two vehicles arrive at the same time, the one on the right has priority.
• School bus: When a yellow school bus stops with flashing red lights, you must stop in both directions until the lights go off. In California, the exception is a bus on the opposite side of a divided highway; violations there can cost up to USD 1,000.
• Speed limits are posted in miles per hour. Residential areas are often 25 mph (about 40 km/h); rural interstates are mostly 65 to 75 mph (105 to 120 km/h). Some states allow 80 mph, and one stretch in Texas 85 mph (according to IIHS).
• Alcohol: In every state except Utah the limit is 0.08 percent blood alcohol; in Utah it is 0.05 percent. Open alcohol containers in the passenger area are banned in most states. The safest choice is not to drink at all before driving.
• Phones: 49 of 50 states ban texting while driving, and 33 states plus Washington, D.C. ban any hand-held phone use (GHSA, as of June 2026). Use hands-free only.
• Emergency vehicles: When an emergency vehicle approaches with siren and warning lights, pull over to the right edge and stop.

Police stops and accidents: how should I behave?

Traffic stops in the USA are more formal than in Germany. The California DMV Driver's Handbook sets out the key rules, supplemented here with proven tips:

1. Signal right as soon as you notice the officer, and pull completely onto the right shoulder.
2. Stay in the car unless the officer tells you to get out.
3. Keep your hands visible, ideally on the steering wheel. Passengers should do the same.
4. Reach for documents only when asked, and say first where your license, rental agreement or passport is.
5. Stay calm and polite. You may decline a search, but never resist physically.

After an accident, stop, secure the scene and call 911 immediately if anyone is hurt. Exchange names, addresses, license and insurance details with everyone involved. Photograph the damage, the scene and license plates, and note any witnesses. Inform the rental company right away via the emergency number in your agreement and have a police report taken, even if the damage seems minor. Some states add reporting duties: in California, every driver involved must report an accident with injuries or more than USD 1,000 in property damage to the DMV within 10 days.

Important: Sign the damage report at return only if it describes the damage correctly, and keep a copy. Without a police report, settlement with the rental company and insurer can become difficult.

Checklist for pick-up and return

At pick-up:

• Have your passport, driver's license, International Driving Permit, the main driver's credit card and your booking confirmation ready
• Compare the agreement with your booking: insurance, additional drivers, mileage, fuel and toll rules
• Decline extras at the counter that your package already includes
• Photograph or film the car all around, including wheels, windows, roof, interior, fuel gauge and mileage
• Have existing damage recorded in the handover report

At return:

• Refuel shortly before and keep the receipt
• Return on time, or you may be charged an extra day
• Photograph the car again, including fuel gauge and mileage
• Sign the report together with staff; document especially thoroughly for after-hours returns
• Check your credit card statement in the following weeks for extra charges

Next steps

Before you book a car, sort out your entry: our Visa Check shows in a few minutes whether ESTA is enough or you need a visa. If you are taking a domestic flight before picking up your car, our guide Connecting flights and domestic flights in the USA covers connection times and TSA rules. Frequent travelers save time on arrival with Global Entry before heading to the rental counter. We are happy to support you with visas and Global Entry; see our services. For route ideas, read our California road trip and national parks in the West guides.