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Should you earn frequent flyer miles for car rentals?

SmarterTravel

For frequent flyers, earning miles for rental cars is different from earning miles for other transactions because the rental agencies tack on a frequent flyer surcharge. With the diminishing value of miles, is it worth it to pay to earn miles? I did some math to find out.

Major car rental agencies—such as Hertz, Alamo, National, and Budget—typically offer 50 miles per rental day. The surcharge for earning miles is 50 cents per day, with a maximum cumulative charge of $2.

If you rent a car for one to four days, each mile will cost you one cent. Since the value of a mile ranges from one to two cents, you’re essentially buying the miles at cost. For rentals of five days or more, the cost begins to drop, making it more worthwhile to earn miles.

American and Northwest appear to be the exception. These airlines abide by the tax relief act of 1997, which requires companies that purchase frequent flyer miles to pay an excise tax of 7.5 percent. The rental agencies turn around and charge the customers this extra amount, which usually amounts to six cents per rental day.

When earning 50 miles per day, American and Northwest members make out better than their counterparts at other airlines. These frequent flyers pay just $0.0012 for each mile, an almost negligible amount.

Ultimately, you may have to pay extra for car rental miles, but in most cases you’re buying the miles for cheaper than they’re worth. That’s always a good deal.

Have a great travel tip you’d like to share? Send your insider travel strategies to editor@smartertravel.com.

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