Which Points Should I Redeem to Book a Rental Car?

May 22, 2016

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TPG reader Heather sent me a message on Facebook to ask about rental cars:

“I’m trying to rent a car using points; I could rent through Ultimate Rewards with my Sapphire Preferred card, or transfer points to United or Southwest and rent through one of those programs. Which method do you recommend?”

To get the most out of your travel rewards, it’s important to know whether to pay cash or redeem points, as well as which program will give you the best value when you decide to book an award. When it comes to booking rental cars, you have plenty of options: In addition to the rewards offered by rental agencies themselves, you can redeem points from many frequent flyer and hotel programs, as well as bank-sponsored programs like Chase Ultimate Rewards. While rental cars generally aren’t a great use of points, some of these options are clearly better than others.

Booking through the Ultimate Rewards Travel Portal is probably your best bet. As a Chase Sapphire Preferred cardholder, you’ll get 1.25 cents per point toward travel expenses. That redemption value is below average, but I’ve found that Chase often has excellent rental car rates, so at least the low value isn’t compounded by inflated prices. Furthermore, you’ll still be still eligible for the primary rental insurance offered by Sapphire Preferred, so long as you redeem points specifically from that account.

United lets you book rental cars directly using MileagePlus miles, but the rates are terrible. For example, a four-day rental in San Francisco over Fourth of July weekend prices out at 33,550 miles (or higher if you want to actually pick your own car). By comparison, Priceline has cars for the same dates starting from $210 total. That works out to a redemption value of roughly 0.6 cents per point, which is just tragic.

Southwest doesn’t let you redeem points directly for rental cars; however, you can redeem for vouchers from National, Alamo, Budget, Hertz and Avis at a rate of 1 cent per point. Not only is that a poor redemption value, but also those vouchers come with restrictions and may be subject to expiration. In my opinion, you’d be better off paying cash.

Spend your MileagePlus miles and Rapid Rewards points on flights rather than rental cars.

There are some other good options. You can get decent value by booking rental cars through the ThankYou Travel Center if you have the Citi Premier Card. You won’t get the benefit of primary insurance like you do with Sapphire Preferred, but you’ll get 1.25 cents per point, and Citi offers comparable rates on rental cars. I value Ultimate Rewards points highly, so I’d rather spend ThankYou points if all else is equal.

Another good option would be to redeem fixed-value rewards like Barclaycard Arrival miles or Capital One Venture miles. You’ll get a lower redemption rate of 1 cent per mile, but that’s the best you can do with those rewards anyway. Again, you won’t be eligible for the Sapphire Preferred insurance, but you’ll earn rewards for charging the rental cost to whichever card you use.

For more on maximizing car rentals and Ultimate Rewards points, check out these posts:

If you have any other questions, please tweet me @thepointsguy, message me on Facebook or send me an email at info@thepointsguy.com.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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