Avoiding the potholes along the car rental road

(CNN) -- Going somewhere and don't want to take your own car? Or are you flying/boating/railroading in and need a way around that doesn't involve the inconveniences of public transportation, cab fares or hoofing it?

The answer: rent a car.

The basics: Pick a company, make a reservation, and show up to pick up the keys. But the prudent traveler should keep in mind a few tips on the rental car road.

Basic rates

Generally speaking, there are four:

• a daily rate with a mileage charge
• a daily rate with a limited number of free miles
• a daily rate with unlimited mileage
• a rate with free mileage over an extended period

Rates, of course, vary depending on the size and type of vehicle, and between companies -- and from city to city. And they fluctuate -- rental car companies run specials, some organizations offer discounts, etc. (Some discounts are linked to airlines -- ask your travel agent.) Shop around for the best deal -- and shop early to lock in your best rate.

Rental car companies usually charge a drop-off fee if you don't return the car to its original location, either in the same or a different city. Tell the clerk if you plan to bring the car back somewhere else.

Weekly rates are generally better than accumulated daily rates -- most companies offer five- to seven-day weekly rates. If you're not sure exactly when you'll be back, or if there's a chance you could be delayed, you'll most likely be better off with the weekly rate than with rate charges, often levied per hour (as much as $12-15 per hour). Companies usually offer a one-hour grace period for late returns.

Insurance

Do not drive any vehicle without insurance. If your personal insurance does not cover rental cars, you need to sign up for coverage when you rent the car. Otherwise, the renter is responsible for damage ranging from a few hundred dollars up to the value of the car and third party damages.

The rental company will offer four coverages -- check with your own insurance provider to see if you're already covered.

• Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW): Releases renter from liability for loss or damage up to the full value of the car. Void if renter is in violation of rental agreement. Costs range from $8 to $12 per day, but some vehicle rentals include this waiver. Some credit card companies offer the waiver as a cardholder benefit, but it is often only supplemental to your own insurance.

• Personal Accident Insurance (PAI): Provides accidental death and medical coverage for renter and passengers

• Personal Effects Coverage (PEC): Covers loss of personal belongings from the rental car

• Additional Liability Insurance (ALI): Protects renter and other authorized drivers from claims by third parties for bodily injury/death and property damage

For the record: If a renter wrecks under the influence of alcohol or drugs, most contracts and insurance policies won't cover damages and medical expenses.

Incidentals/Underage or additional drivers

• Taxes: Taxes vary from state to state and are added to the cost of the rental. For international car rentals, taxes could add up to 30 percent to the bill. In addition, some airport rental locations add an airport surcharge of about 10 percent.

• Gasoline: Fill up the tank before you return the car, unless your rental agreement includes a flat rate for gas. If you leave this detail to the rental car company, it will cost you about $3/gallon or more.

• Additional drivers: Additional drivers must be noted in the rental agreement, and additional charges may be added.

• Underage drivers: Most agencies require that renters be at least 25, although some agencies allow drivers as young as 21 with an additional charge. Some small companies allow 18-year-old drivers -- again, usually with an additional charge.

• Credit card payment: Most car rental companies will accept their own pre-paid vouchers (obtainable through a travel agent) in lieu of a credit card, although many require a credit card to guarantee payment even with the vouchers. Some require a "cash qualification questionnaire" so that your credit history may be checked.

Without a credit card, most companies require a sizable cash deposit that may exceed the estimated charges.

International rentals

Many countries (Spain, and most countries outside Western Europe) require an International Drivers License, available at automobile association offices. The license is valid for a year, and requires two passport-sized photos and a valid U.S. license. Fees vary from $5-$15. Carry both the international license and your U.S. license when driving abroad.

Generally speaking, U.S. insurance is not valid outside the country, although it may apply in Canada, Mexico or other Central American countries. However, U.S. insurance is often inadequate for those countries and additional coverage may be necessary. Canada, for example, requires at least $200,000 in liability insurance, and Mexico requires a bond of up to half the value of the vehicle if your insurance does not carry theft, third party liability, and comprehensive insurance. Check with your own insurer before leaving the country.

Some agencies will not rent to people over 70 or under 25, and gasoline is expensive abroad.

Of course, know the rules of the road for the country in which you will be driving.

Essential extras

Is there anything else you need to know? Yes.

• Check the vehicle thoroughly before you leave the lot, noting any damage already incurred. You don't want to be charged for something you didn't do.

• Know the laws in the area where you'll be driving. For example, most states require car seats for children under 4. If you don't bring your own, it's possible to reserve one in advance with the car rental company (sometimes a small fee is added). Almost all states require seatbelts -- buckle up.

• Ask for maps. Most companies hand them out.

• Lock the car. And don't leave valuables in it.

• You are responsible for any parking and traffic violations you incur. Some police jurisdictions won't bother to track you down -- but some will. Best to pay up before you go home.