Why do rental companies have an age restriction to rent cars?

Answer 1

Would you loan your vehicle to a typical under 21 male driver? Rental agencies are protecting their property by not allowing customers that generally have a poor record to rent their property. While that's partially the reason.. the real reason is because basically an insurance company insuring a rental agency would charge substantially more if the company rents to a high volume of younger drivers (Rental agencies have ALOT of liability)... so they largely rent to those 21 or above for that reason because they are getting insured at a much more affordable cost. Sometimes you will see underage fees associated with renters under 25 but are at least 21 because of the same reason, the charge is just to try to re-coupe some of the costs associated with higher insurance premiums. Works about the same as your own personal insurance, the younger the driver the more the yearly premium - at the magical age of 25 your premium tends to drop as insurance companies typically see you as an experienced driver. Imagine the liability incurred on hundreds of thousands of drivers under 21 as compared to hundreds of thousands of drivers 25 or older. Which would u insure? Hope this helps.

Great answer you nailed it! :) Car rental companies work according to the rule that a driver shoud either be older that 23 or have at least 3 years drivers experience. If you only qualify for one of these criteria, they'll charge a "youn driver surcharge". Car rental companies will also not rent out a vehicle to a person older than 72, for the same obvious reasons. However, the last case does not have the option to be waivered.