Renting a Car in Cabo, Mexico: What You Should Know

Wondering how to get around in Cabo? Driving your own set of wheels is an excellent way to explore!

Renting a car in Cabo and hitting the highway opens up this part of Mexico, offering up coastal drives and road trips to coves and beaches along the way.

You can head to the mountains, cruise along the oceanfront and make your way to other towns and cities on some easy Cabo day trips.

If you’re already looking forward to a trip to this desert-meets-the-sea destination, don’t miss our travel guide for Cabo. If you’re not yet at that stage, have a look at this article about planning a trip to Cabo.

We’ve visited Cabo many times, usually renting a car for some of the time.

Most recently we embarked on a deep dive into comparing Los Cabos car rentals – coming up with tips to help your trip run as smoothly as possible.

From rental car hazards to how to get the best value-for-money car rental in Cabo San Lucas, let’s get the motor running!

Do you need to rent a car in Los Cabos?

Los Cabos is a big area.

First things first, if you’re confused about the difference between Los Cabos and Cabo, then you’ll want to read this highlighted post first.

And you’ll want to read about Cabo San Lucas vs. San Jose del Cabo too – because these two towns in Los Cabos are quite different.

But other than that, the answer to “Do you need a car in Cabo?” is… It depends on where you stay in Cabo. 

For example, if you’re planning on booking an all-inclusive resort and don’t plan on lifting a finger, let alone driving (and why not!), then you won’t need a car.

The same goes if you’re planning on staying in the Cabo San Lucas area (like Medano Beach).

The town is super walkable, fun to explore, and you won’t need your own set of wheels to get around. Having a car may even be an added stress you don’t need, what with figuring out where to park and directions to the best hot spots.

However, if the idea of a day trip to La Paz or Todos Santos intrigues you, then you may want to rent a car in Cabo.

Or if you want to explore the many beaches in the Cabo area (maybe check out some beach clubs too), or go from Cabo San Lucas to the San Jose del Cabo Art Walk, again, a rental car can come in handy.

Basically having a car offers the chance to get out and explore further afield.

So while you may not need a rental car, having one can help you make the most of your time in this part of Mexico.

Is it safe to rent a car in Cabo San Lucas?

Driving in Cabo San Lucas is quite safe if you’re a decent driver.

While it may not be very enjoyable driving around the town of Cabo San Lucas itself, driving the main roads to see the sights in the local area can be a fun adventure.

If you’re thinking about renting a car in Cabo and wondering how safe it is, check out our article about staying safe in Cabo.

But generally speaking, we’d say yes: It’s safe to rent a car in Cabo and drive. The crime rates are low and you’re not likely to be car-jacked on the main roads.

The road conditions are generally pretty good, too.

There are a few hazards to be aware of, however. Actually, they’re not so much “hazards” but things to look out for.

Look out for one-way streets. Some are more clearly signed than others. But you could end up going the wrong way on others before you realize it!

Also, the locals (include those on motor bikes) drive crazy fast on the Tourist Corridor between Cabo San Lucas and San Jose del Cabo. Be especially conscious of this when merging to get onto the Corridor Highway.

Drunk drivers are another night-time hazard.

Christmas Eve, New Year’s Eve and even New Year’s Day (still!) are notorious for this. In short, driving at night in Cabo isn’t all that fun, and best avoided if you can.

Can you drive in Cabo with a U.S. license?

If you’re coming from the United States, Canada, the U.K. or the EU, your country’s driving license will allow you to drive in Mexico. A valid driver’s license from most countries is legal in Mexico.

However, if your license isn’t printed in English, you may need to get an International Driving Permit.

Best car rental in Cabo San Lucas airport

You might find that a Cabo airport car rental is more expensive than, say, renting a car from a location in downtown Cabo San Lucas.

That wasn’t the case on our last trip, though. We found when checking online ahead of time that the rates were the same no matter the rental location, so long as the pick-up and drop-off location was the same.

After checking into various car rentals in Cabo, we settled on renting a car online from Avis through Discover Cars, with pick-up from the Avis Los Cabos International Airport (SJD) location.

Discover Cars offered the best combination of good rates, reputable car rental agencies and affordable car insurance.

They’re an award-winning car rental platform operating in over 150 countries.

Our wait time at the Avis car rental office at the Cabo airport was about 30 minutes (same for dropping off the car).

The Avis customer service was good. The representative was factual and helpful in answering our insurance questions and didn’t push us to pay for the most expensive insurance coverage. (See more on insurance below.)

Cactus Rent-A-Car also gets good reviews. They have an office at the airport too.

How much does it cost to rent a car in Cabo San Lucas?

The cost of renting a car in Los Cabos will vary, depending on a host of factors.

This includes the time of year you’re traveling, the vehicle you want and the company you’re renting it from.

To start with, as with hotels and other prices in Cabo, the high season is more expensive than quieter times of the year.

If you’re concerned about the rental price, smaller cars also tend to be cheaper than their larger counterparts.

But don’t necessarily go for what seems to be the cheapest rental!

Many companies offer rental cars at the Cabo San Lucas airport. You may not always get the best price here. But certainly renting from the airport is convenient if you’d like a car for your whole trip.

As mentioned, it’s best to book in advance for cheaper rates.

You also pay extra for additional drivers, baby seats and the like.

Cabo San Lucas car rental insurance

The cost to rent a car in Cabo San Lucas is one thing.

Car insurance is another. Expect to pay extra for car insurance – quite a bit more. And this is true no matter which company you rent from.

In fact, the insurance can sometimes double the cost of renting a car, depending on the insurance coverages you get.

Note: We found it very difficult to get complete insurance information online in advance before renting a car in Los Cabos. Just be prepared to pay more than you budgeted for various insurances when you get to the rental counter in Cabo – and you’ll be less peeved.

There are different types of Mexican car insurance.

Basic third-party liability insurance

Mexican law requires basic third-party liability insurance.

This insurance is intended to help pay for injuries suffered by another driver and passengers (plus damage to their vehicle) arising from an accident that you cause.

Your U.S. or Canadian car insurance policy isn’t accepted in Mexico for this.

It seems that this mandatory Mexico insurance is included in the rental cost (but it’s best if you confirm this when renting).

The kicker, though, is that this basic mandatory liability insurance is very limited. We’ve read that the minimum is 50,000 pesos (about $2,600 USD) for property damage and 100,000 pesos (about $5,150 USD) for bodily injury. (Of course, this could go up in future.)

The point is that this basic insurance won’t go much beyond covering a fender bender – and it certainly won’t cover claims for any serious injuries or damage you cause in an accident.

Supplemental third-party liability insurance

Because the basic insurance coverage is so limited, it’s recommended that you buy additional third-party liability insurance to the tune of at least $300,000 USD. (We always buy it.)

We understand that in Mexico, if you cause an accident resulting in death, your insurance has to pay the minimum wage multiplied by 5,000 (plus funeral expenses) per person. And the state can multiply this amount again by up to five times.

You’re at risk of being held by police and tossed in jail if you can’t prove that you have enough insurance to pay for any damage or injury you cause in an accident.

Coverage of $300,000 USD should be the minimum you get, but you might want to consider buying up to $500,000.

When you get to the car rental counter at the Los Cabos airport (or elsewhere), you’ll be offered this additional liability insurance. It’s not mandatory, though many rental agencies will tell you it is (or let you assume it is).

The cost?

For our most recent trip to Cabo, Avis was quoting $16 USD a day for additional liability insurance to a maximum of $1 million USD of coverage.

Collision damage waiver (CDW)

This insurance is also called Loss Damage Waiver (LDW).

It partially covers damage to the rental vehicle. You’re responsible for paying the rental company for such damage – no matter who is at fault for an accident.

Again, you could be jailed until you pay the full amount.

This included additional third-party liability insurance. It also included CDW to 80% (i.e., a deductible of 20%). So if we had damaged the car, we’d have been responsible for 20% of the repair cost.

Additional loss damage waiver (LDW)

We’re not finished yet!

There’s additional “gap” insurance offered by Cabo car rental companies.

Take Hertz. For renting a car at the Cabo San Lucas airport from them, the CDW deductible (for our last trip to Cabo) would have been $900 USD for a Chevrolet Beat Sedan and $1,400 USD for a Chevrolet Aveo.

But we could have opted for their “Super CDW” for $35 USD day to “further reduce” our CDW liability.

Or we could buy their full loss damage waiver coverage for $45 USD day. This way, had we rented from Hertz, we would have had full insurance for the vehicle, i.e., no liability for loss or damage to the car (including theft).

For full CDW or LDW coverage with Avis, the cost would have been about $65 USD a day. For this package price, we would have been fully protected – full protection for any damage to the car, along with the additional third-party liability insurance.

When picking up our Avis car rental at the airport, we asked the representative which insurance package most customers go with. The answer: The “standard” 80% CDW insurance (so a 20% deductible) plus additional third-party liability insurance (the package we went with).

“Full coverage” insurance offered by Discover Cars

For the Nissan Versa car rental in Cabo that we booked through Discover Cars recently, we opted to get their so-called “Full Coverage” insurance.

The cost was a little under $7 USD a day.

Note: For the coverage to work, you need to have CDW or LDW insurance. Discover Cars’ insurance is supplemental insurance that requires having CDW or LDW insurance.

Basically, it tops up or completes the CDW or LDW insurance.

So, for example, if you accidentally scrape the wheels along a curb in Cabo, this insurance would kick in. (Remember, wheel damage isn’t usually covered in typical CDW insurance offered by the rental car.)

To recover, you’d pay the car rental company for the damage, and then submit your claim to Discover Cars. They aim to process claims and issue refunds within 48 hours.

Personal accident insurance (PAI)

None of the types of insurance outlined above would cover you for medical or hospital expenses if you’re hurt in a car accident in Cabo.

This optional insurance should be unnecessary, however, if you have your own travel medical insurance.

Security deposit on your credit card

Despite having valid CDW or LDW insurance coverage, chances are the rental company will put a sizeable charge or hold on your credit card as a security deposit.

Hertz would have placed a security deposit or hold of $1,600 USD on our credit card if we had gone with them for our recent car rental in Los Cabos and declined their CDW.

Avis placed a $3,000 USD hold on our credit card – and we had bought CDW insurance from them to the tune of 80% of any damage to their rental vehicle.

Best car rental company in Cabo San Lucas town

So what is the best place to rent a car right in the town of Cabo?

That’s difficult to answer. It depends on your criteria.

On our most recent trip to Cabo, a family member also rented an economy car cheaply from Ten Car Rental for a day to visit Todos Santos.

The Ten Car Rental has an office conveniently located behind Medano Beach in Cabo San Lucas, just a few minutes’ walk from Medano Beach resorts.

Their vehicles are a few years old, so the rental price is cheaper than that offered by the big name car rental agencies.

The rental car was definitely not new looking and had a crack in the windshield – it blended in well with the local vehicles! And it got us all to Todos Santos and back just fine.

The rental cost for 24 hours was about $70 USD, which included all insurance. See their no-worries protection program.

Tier 1 car rental companies like Avis, Hertz and Thrifty also have offices in Cabo San Lucas. For a newer vehicle and perhaps a greater comfort level, you may prefer one of these more familiar rental companies.

Tips for driving in Los Cabos

Still wondering “Should I rent a car in Cabo San Lucas?” Here are some additional things to know:

Gas stations

You’ll want to know where to fill up your Cabo San Lucas rental car with fuel.

It’s always a good idea to fill up when you see a gas station, especially if you’re heading out on a day trip.

Most gas stations in the country are operated by Pemex, which is owned by the Mexican government.

These gas stations can be found all over, both in Cabo San Lucas, San Jose del Cabo and the Tourist Corridor. There are a few gas stations run by other companies as well.

When you pull up to a Pemex gas station, the attendants will fill the car up for you. Knowing how to get the fuel cap open (and what side of the car it’s on) is something you should figure out beforehand.

Attendants may also perform other checks on the car or even wash your windshield. You should give them a tip (a dollar or 20 pesos is good).

Also make sure you have cash on you, as they don’t always take credit cards. It’s also best to pay with cash to avoid the risk of your card being compromised.

Speed limits

Be very aware of the speed limits on the roads around Cabo. If you’re caught speeding, you’ll have to pay a fine at the local police station. And if nothing else, speeding is dangerous.

Speed limits are usually 55 mph (90 kph) on highways and up to 37 mph (60 kph) elsewhere. Always watch for posted speed limits.

Toll roads

There’s a new(-ish) toll road that connects Cabo San Lucas with San Jose del Cabo and the airport nearby. You’ll have to pay in cash; pesos and dollars are acceptable.

Other toll roads also exist on highways further afield.

Road signs

Signage can be hit or miss in Mexico. It’s not always easy to locate.

Because of this, it’s best not to rely entirely on road signs to get you to where you want to go. Google Maps or some other GPS can help guide you to your destination.

However, Baja California Sur generally has up-to-date road signs, particularly if you stay on the highways.

In the cities and towns, it’s another story. (Remember what we said about one-way streets earlier?) This can make missing your turn, or finding where you want to go, a bit of a nightmare without good GPS.

Speed bumps

Another hazard to keep in mind are frequent speed bumps (sometimes marked as topes).

These large speed bumps turn up in the strangest of places. Although they’re meant to keep us all safe by slowing down traffic, they sometimes seem more dangerous than what they’re trying to prevent.

Just keep an eye out for speed bumps and you should be fine.

Unlimited mileage

Make sure when you’re renting a car in Cabo that you have “unlimited mileage” included in the rental rate.

Otherwise, there’s a limit on the amount of miles you can drive, meaning you will to have to pay extra for any miles you drive over this cap.

That wraps up our guide to renting a car in Cabo, Mexico!

It’s a great idea to rent a car in Cabo to explore places like Todos Santos and La Paz on day trips.

Every time we visit Cabo, we usually rent a car for at least a day. It’s safe, so long as you use common sense and avoid night driving in the countryside. Driving defensively is a good idea too.

Don’t be surprised if the insurance is about the same cost as the car rental, however.

In the high winter season, expect to pay about $100 USD total a day for a vehicle from the big-name car rental agencies. This will cover both the car rental cost and the insurance. When it’s less busy, you should be able to rent for less.

To avoid unhappy surprises, we suggest that you only rent direct from reputable agencies like Avis, Hertz, Enterprise and so on, or via a platform like Discover Cars (where you may get a lower rental rate for the same vehicle from one of these companies).

We hope this helps. But make sure you also do your own research and get up-to-date information before going on your trip!

Photos: 2, 4, 5, 6 © Janice and George Mucalov, Cabo Visitor