By The Escape desk · Last verified 11 October 2026
When you rent a car overseas, the price usually includes basic damage cover with a big excess: the amount you pay if the car is damaged or stolen. In Australia, consumer group CHOICE found standard excesses of about A$5,900 to A$6,000 at the major firms. At the counter you will be offered an excess reduction for a daily fee, often A$46 to A$74 a day, while standalone excess insurance bought beforehand can cost from about A$10 a day on a week’s hire. Expect a security deposit to be held on a credit card. For the licence, carry your Singapore driving licence plus an International Driving Permit, which the Automobile Association of Singapore issues for S$20, valid for one year.
A hire car turns a holiday into a road trip: the coast at your own pace, the farm café off the bus route. A few minutes on the small print protects the budget.
Quick facts
- Excess: what you pay after damage; around A$5,900 to A$6,000 as standard at major Australian firms.
- Counter waiver: reduces the excess, often to zero, for a daily fee.
- Standalone cover: you pay the excess, then claim it back from your insurer.
- Common exclusions: windscreens, tyres, underbody, roof and headlights.
- IDP: S$20 from AA Singapore (plus S$7 courier online); valid one year; 1949 Convention.
- Not recognised: AA says China, Myanmar and Vietnam do not recognise its IDP.
How the excess works
Think of the excess as the most you will pay if something goes wrong. If you scrape the car and repairs cost A$1,200, you pay A$1,200; if the damage costs A$9,000, you pay the excess and the rental company’s cover handles the rest. You have three ways to deal with it:
| Option | Reported cost (7-day hire, Australia) | How a claim works | Watch out for |
|---|---|---|---|
| Accept the standard excess | No extra cost | You pay up to about A$6,000 if damaged | A large bill after a minor accident |
| Rental company excess reduction | About A$46 to A$74 a day | Excess reduced, often to zero; no claim to file | Exclusions such as tyres and windscreens |
| Standalone excess insurance | From about A$10 to A$22 a day | You pay the rental firm, then claim it back | Cover limits; keep every document |
| Travel or credit card insurance | Varies | Claim from the insurer | Often only if the hire was paid on that card; check the limit |
Figures are from CHOICE’s December 2025 comparison of Australian car hire. Excesses may be higher for luxury cars, four-wheel drives and young drivers, and in other countries the structure differs, so read your rental terms.
Worked example: a week in Australia
Taking a rental firm’s excess reduction at A$74 a day for 7 days costs 74 × 7 = A$518. A standalone policy at A$10 a day costs 10 × 7 = A$70, a saving of A$448. The trade-off: with standalone cover, the rental company charges you the excess first, so you need the credit limit to absorb it and the patience to claim it back.
Deposits and the counter
- Bring a credit card in the main driver’s name; rental firms commonly place a deposit hold on it, and some do not accept debit cards. Check the amount in your booking terms.
- Inspect the car and photograph or video every panel, the wheels, the windscreen and the fuel gauge before you drive off.
- Read what you sign: decline extras you have already covered, and note the fuel and mileage policy.
- Name every driver: an unauthorised driver can void your cover entirely, as can wrong fuel, unsealed roads or driving under the influence.
- On return, get a signed check-in record and take final photos.
The licence you need
Many countries and rental firms want an International Driving Permit (IDP) alongside your Singapore licence, which it translates. The Automobile Association of Singapore issues IDPs under the 1949 Convention on Road Traffic for S$20; walk-in applicants at its three outlets usually collect within an hour, while online applications take about 10 working days plus courier, at S$7 more. It is valid for one year, cannot be renewed, and must be carried with your valid Singapore licence. AA notes that China, Myanmar and Vietnam do not recognise it, so check the rules for your destination before you book a car.
The WahLiao Verdict
Get your IDP from AA before you fly; it is cheap and saves arguments at the counter. Buy standalone excess cover in advance if you have the credit limit to front the excess, or take the counter waiver if you want zero hassle and can stomach the price. Either way, photograph the car like a detective and name every driver. Then enjoy the open road.
Questions people ask
Is the counter’s excess reduction worth it?
It is the most convenient option but often the most expensive. Standalone cover can cost a fraction as much, though you must pay first and claim later.
Does my travel insurance cover rental excess?
Some policies and credit cards include it, often with conditions such as paying for the hire on that card and a maximum amount. Check the limit is at least the rental’s excess.
Can I use my IDP to drive in China?
No. AA says China does not recognise it, nor do Myanmar and Vietnam. Look up each country’s own requirements.
What usually is not covered even with zero excess?
Commonly windscreens, tyres, underbody, overhead damage and headlights, plus anything caused by breaking the rental terms.
Sources: CHOICE, car hire excess and hidden fees (December 2025); Automobile Association of Singapore, International Driving Permit. The Escape explains; it does not advise.
Read next: Driving Overseas: The International Driving Permit and When You Need One · Travel Insurance in Singapore: What It Covers and What It Doesn’t · Back to The Escape
For what’s worth it this week, with the bill shown, read The WahLiao Week.
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