Rental car: the excess (deductible) explained

With a rental car, the excess is the amount you pay yourself for damage before the rental company's cover steps in. It is one of the most important cost factors and the most common reason for disputes after returning the car.

An example: excess €1,000, damage €2,000 → you pay €1,000, the insurance €1,000. Accident (CDW/LDW) and theft (TP/TW) are almost always handled separately, sometimes with different amounts. The deposit is retained up to the amount of the excess if there is damage. Typical amounts are around €500 to €1,200, depending on vehicle class and tariff.

Third-party liability and collision damage waiver

Third-party liability is included in the rental price and covers damage you cause to others; abroad the statutory cover is often low. The collision damage waiver (CDW/LDW) covers damage to the rental car itself — accident, and often theft — usually with an excess. Without a collision damage waiver you are fully liable for damage you cause to the vehicle.

The add-ons and abbreviations

CDW/LDW is the collision damage waiver with excess, SCDW/SLDW without. TP/TW stands for theft protection, PAI for personal accident insurance, RAP for roadside assistance and mobility guarantee. Often not included: tyres, rims, glass, underbody, roof, interior, mirrors and lost keys — those often require a "full cover plus" package.

The four options

No excess or a high excess means a cheap rental price at high risk. The rental company's own excess reduction is convenient but often expensive, because it is charged per day. An external rental car policy through a broker is usually cheaper — but be careful: often it is not insurance but a promise of reimbursement. You pay the damage yourself first and claim the money back afterwards, which can take time. Credit card cover only applies if the card provides rental car protection; usually the rental must be paid with that card, and an excess can remain.

Deposit and credit card

The deposit is reserved on the credit card as a pre-authorisation, depending on the rental company and vehicle about €250 to €1,500, and up to around €3,000 for higher-value vehicles or vans. Many rental companies require a real credit card; debit, EC and prepaid cards are not always accepted. The card must be issued to the main driver and have enough available credit; you should know the PIN. Ask for a deposit receipt and keep an eye on the release or refund after returning the car.

What to watch when renting

Avoid double cover and check whether your credit card or your own motor insurance already provides protection. Look at the remaining excess and the liability cover amount. Register additional drivers explicitly, otherwise there is no insurance cover if that person drives. Clarify the fuel and mileage rules in advance. Check country exclusions, because many policies do not cover certain countries or regions. And document the handover with photos or video of all sides, roof, interior, rims, odometer and fuel level.

Damage and return

The burden of proof lies with the rental company: it can only claim money if it proves that the vehicle was damage-free at handover and that the damage came from your period of custody. There are no eased evidentiary requirements (BGH VIII ZR 28/04; LG Lübeck, judgment of 06.03.2024, 6 O 82/23). Without a handover protocol rental companies often fail with their claims. A handover protocol you have signed acts as strong evidence — do not sign blindly and check the damage listed against the vehicle. Stone chip damage is generally regarded as contractual use; the renter is usually not liable for it. Claims for compensation for damage become time-barred six months after return (§ 548(1) BGB). In a dispute, keep the return protocol and photos, check the claim and, if necessary, involve a consumer advice centre or arbitration body.

Abroad

The liability included in the price often has low cover abroad, too little for personal injury. As a top-up there is the "Mallorca policy" for Europe and the "traveller policy" outside Europe. Check in advance whether your motor insurance, a motorists' club or the credit card already covers this.

Typical traps

Damage is "discovered" only after the return — ask for written confirmation at return. Handling and service fees come on top of the excess. At the counter, expensive extra insurance is pushed even though you are already covered. And the deposit is not paid out despite an undamaged return — then send a written reminder with a deadline.

Quick questions

Is excess reduction worth it? It is a cost-risk trade-off; external policies are often cheaper, but watch the reimbursement route. Does the insurance apply in all countries? No, many policies exclude certain countries. Does my credit card pay? Only under its conditions, often only if you paid with that card. Who has to prove damage? In principle the rental company. Do I have to report damage? Yes, accidents and larger damage immediately to the rental company.

Note: general information, not advice or a recommendation for your individual case. What counts are the rental agreement and the insurance conditions. As at: 17.10.2026.

Weiterführende Themen

Sources

Sections 535, 538, 546, 548, 280 BGB (rental/return/limitation): https://www.gesetze-im-internet.de/bgb/__548.html
BGH, judgment of 03.11.2004 — VIII ZR 28/04 (burden of proof on the rental company)
LG Lübeck, judgment of 06.03.2024 — 6 O 82/23 (no damages without a handover protocol)
Consumer advice centres and ADAC — rental cars, deposit, insurance (as at 2026)