To Rent a Car

Renting a Car in Portugal: What You Need to Know

Renting a car in Portugal is easy, but there are a few things to keep in mind to avoid surprises. 

I recommend paying attention to local car rental companies. They are usually much cheaper, at least.
Many of them can be found through popular search platforms like Booking, Expedia, Rentacar, etc.
You can make a reservation directly through a search platform, although I personally don’t recommend it, even though, for example, Booking sometimes offers a discount. An alternative is to go directly to the website of the company you choose.

Everywhere, you will be offered the option to purchase insurance. I’ll talk about that a little later.

You will need to use your credit (not debit) card!

1️⃣ Deposit

Most rental companies block a security deposit on your credit card, usually several hundred euros. This isn’t charged unless there’s damage, traffic fines, or missing fuel.

2️⃣ Insurance Options

The price of insurance can vary a lot depending on where you buy it. You cannot rent a car without it. There are several ways to get coverage.

The cheapest - essentially free - insurance is the MasterCard benefit (call your credit card and check if you have it), if you have that program with your credit card. Trust me, rental companies don’t love it because they don’t make money on it, but they accept it. It covers:

• CDW / TP (Collision Damage Waiver / Theft Protection)

• Third-party liability within the card’s limit

• Deductible (partially or fully, depending on the card)

IMPORTANT: Before your trip, you can call the MasterCard Benefit service and request a Letter of Coverage – they will send it to your email immediately.

It is also important to book the car using the same credit card that is linked to your MasterCard Benefit plan.

If you don’t have this benefit, insurance can be purchased:

• Directly from the rental company, usually expensive, sometimes even more than the car rental itself.

• Through a broker, for example, Sunnycars, which offers an all-inclusive package with extended coverage.

a) Direct Rental + MasterCard Insurance

• Basic coverage (CDW, TP) comes free with certain credit cards.

• If there’s damage, the rental company may block the deposit, and you’ll need to file a claim with your credit card company.

• Savings come at the cost of potential stress: the deposit may be held, disputes can arise, and claim processing can take weeks.
  
  

b) Sunnycars / All-Inclusive Rental

• Full coverage included: CDW, TP, glass, tires, roof, undercarriage, towing, and sometimes keys/documents.

• You pay a bit more upfront (~€150 for 8 days), but the rental company won’t charge you for minor scratches or damages - Sunnycars handles it.

• For major accidents, you might need to provide documents for the claim, but you won’t pay out of pocket.

c) Direct Rental + Local Insurance

• Insurance can be more expensive than Sunnycars, but the deposit is usually smaller.

• Local insurance often has exclusions (glass, tires, roof) and franchises/deductibles.

• Risk of additional charges for small damages is higher.
  
  

3️⃣  In Portugal, there are many toll highways. All rental cars are usually equipped with transponders or, sometimes it is called a "toll device" (Via Verde), for which the rental company charges an additional fee. Keep this in mind. This fee usually depends on the number of rental days (usually ~€1.5–2/day) or it could be a fixed cost from €17 to €25 or €25 for one whole rental period.

Later, after returning the car, you will receive a toll bill, and the total amount of tolls will be charged to your card.

4️⃣  If your plans include crossing the border, for example, traveling to Spain, you will need to pay an additional fee. Depending on the company, it can range from a few euros per day up to €150 for the entire rental period. If it’s more expensive, it’s usually not worth it.

5️⃣ Document Everything!

Take photos and videos of the car before and after your rental.

In case of damage, have the following ready to make a claim easier:
 

• • Booking reservation

  • Rental agreement / Contract (Contrato de Aluguel/ Contrato)

  • Accident report / police report (if applicable) (Relatório de Acidente)

  • Damage report from the rental company (Relatório de Danos) / Vehicle Condition Report (Relatório de Condição do Veículo)

  • Photos of the car before and after (Fotos antes do aluguel e após danos)

  • Receipts for repair or towing (Comprovantes de reparo ou serviços)

  • Contact and insurance of third parties (if the accident involved another vehicle) (Contato e informações de seguro do outro motorista) and photos of their vehicle damage (Fotos dos danos do veículo deles)

  • Correspondence with the rental company and proof of credit card coverage

  • You will also need a credit card statement showing the same exact amount of the resting cost
    
    

✅ Summary

• Sunnycars = peace of mind, slightly higher upfront cost, minimal stress.

• MasterCard insurance = free coverage, but higher risk of disputes and deposit issues.

• Direct local insurance = potentially more expensive, but smaller deductible and no headache about anything, including disputes, issues, and surprises on damage you are not even sure happened while you drove the car.
  
  TIP: Always document everything at pickup and return — it makes life much easier if a claim arises.