12 Tips for Renting a Car in Panama
While visiting Panama is an amazing experience, renting a car can be confusing and frustrating if you're not in the know.
The first time my partner and I rented a car here, we were stunned when our daily rate skyrocketed at the rental counter. Instead of the $7/day we were quoted, we ended up paying more than $30/day!
It took us several more times renting a car to figure it all out.
Tips for Renting a Car in Panama
In this post, I'll share 12 solid tips that we have learned to help make your experience renting a car in Panama as frustration-free as possible.
👉 Tip 1: Don't get excited about the online quoted price
This is the issue that gets people the most. Most Panama car rental companies do not include the country's mandatory liability insurance in their quoted daily rate.
So, when you see $2-$8/day online, don't bother to get excited. You'll actually pay more like $25-$40/day for a typical car.
While you can likely use your credit card company's complimentary collision coverage IF you pay for the car with the card (see Tip #4 for more info), the mandatory insurance required by Panamanian law is liability insurance. Car rental companies are not allowed to accept any out-of-country liability coverage (see Tip #3 for more info).
👉 Tip 2: If there's a chance you'll extend your rental period, get the price for the additional days in writing when you're checking out.
If you try to extend your rental later in your trip, the car rental agency may try to charge a significantly higher daily rate than what you paid for the initial rental period unless you return in person to where you rented it and sign a new contract.
👉 Tip 3: Rent an all-wheel or four-wheel drive vehicle
If you're just visiting Panama City and other cities/major towns, like David or Boquete, you can skip this tip. You'll be fine with a regular car.
However, if you'll be doing any exploring around the countryside, I highly recommend you invest in an all- or four-wheel drive vehicle.
Rough and dirt roads and common. You can also count on most driveways being dirt, some being too slippery in both the dry season and rainy season for a regular car to navigate.
The Subaru Forrester or the Suzuki Jimny are great options. You can expect to pay in the neighborhood of $40-$50/day. We've always been thankful we made this investment!
👉 Tip 4: Don’t buy any insurance online
None of the insurance you can buy online will be valid in Panama—the law requires that everyone renting a car in Panama purchase the liability insurance from a Panamanian company, so you need to buy the required insurance when you pick up the car in Panama.
👉 Tip 5: Bring a letter from your credit card company confirming your collision coverage
NOTE: See Tip #6 for more info before making this decision.
If you do want to use your credit card company's collision coverage, contact them and request a letter in both English and Spanish confirming that they will be providing it.
The amount you save will depend upon the rental company you use, but it's typically between $5 and $10 per day.
Make sure you fully understand the type and amount of coverage your credit card company provides. For example, some don't cover pickup trucks. It may or may not be worth the savings to waive the Panamanian insurance, so please don't waive anything until you fully understand the repercussions.
Then, don't forget to use that credit card card to pay for the rental car!
👉 Tip 6: Be prepared to put down a deposit
When you decline the optional collision coverage, Panama car rental companies will require you to pay a sizable deposit on your credit card. Actual deposits range from $1,500 to a whopping $10,000.
You may even be required to put down a deposit—about $300 to $500—even if you do not decline collision coverage.
Whatever the deposit, it will be credited in its entirety if there is no physical damage to the car. (See Tip #8 for more info.)
If they do find damage, they will deduct it from this deposit. Make sure to get copies of all paperwork, which you will submit to your credit card company for reimbursement once you are back home.
👉 Tip 7: Ask the agent to check that the car has enough Panapass funds
Panapass is used to pay for the toll roads around Panama City. The pass is usually mounted somewhere on the windshield and will be automatically debited and lift the toll gate as soon as you approach it. (Look for your balance on the digital screen at the gate!)
About half of the cars we've received have been short on Panapass funds—without enough balance to get us out of the city. If you're not familiar with the area and/or don't speak Spanish, it's a hassle to get it refilled.
It's ideal that your Panapass has at least $6 on it, preferably $8-$10.
If you do get stuck with one that has $2 or less on it, you'll need to find a Super 99 grocery store where you can get your card refilled by a checkout clerk. You will give them your Panapass number, which you should find on the key tag, and refill it to $8-$10.
👉 Tip 8: Check the gas tank
Two times we've been given a car on empty. Finding a gas station near the airport is not as easy as you'd expect. If you want to avoid a moderate headache, request a different car.
👉 Tip 9: Do a detailed damage inspection of the car AND take a video BEFORE you take the keys and leave
Be ruthless in your damage inspection and take a video of the entire process, making sure to film any actual damages. This is an excellent "insurance policy" against unscrupulous rental return agents!
Make sure you check the tires! It absolutely CAN happen that they give you a car with tires that are past their prime.
👉 Tip 10: If your car got filthy while you had it, wash it or expect pay a cleaning fee
Driving around the country may cover the interior and exterior of your car in dust. If you don't want to get nailed with an extra cleaning charge (sometimes as much as $75!), find a cheap car wash and get it fully cleaned the day before you return it.
👉 Tip 11: Don't forget to refill the gas tank!
Of course, after renting a car in Panama, don't forget to return it with at least the amount of gas it had when you received it.
Unlike many U.S. airports, there are not a ton of gas stations in the immediate vicinity of Panama's international airport, so this takes a little planning.
👉 Tip 12: Do not let them take the car until your final inspection and return paperwork are done
I've heard stories of some handing over a car that was totally fine, the car being driven away, and returned with a flat tire. Guess who paid for that?
Do not let anyone take your car until they complete the inspection and all of your final paperwork has been completed.
Panama Car Rental Companies
I'm comfortable recommending these companies due to either firsthand experience or solid secondhand recommendations:
Here in Panamá, we can get in trouble for saying bad things about a company even though it's true. If a company is not on this shortlist, I either left it off for a reason or I have no evidence that they are worth recommending!
Bonus Driving Tip: Use Waze!
Once you're on the road, you will definitely want to use Waze as your navigator.
Panamá's highways are infested with speed traps and Waze will give you forewarning, saving you from major headaches.
A couple of notes...
- You can change your Waze settings to "Avoid Difficult Intersections" (DO THIS) and "Avoid Toll Roads" (if you don't have a Panapass or a high enough balance).
- Waze doesn't always make good decisions in the heart of the city. On many an occasion, it's rerouted me through back streets only to spit me out where I have to make a left turn on an incredibly BUSY thoroughfare!
Have more questions about renting a car? Message me and I'll try to help!
