Liz Larroquette
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To Rent A Car Or Not To Rent A Car?

If you are considering relocating to Panama, either for retirement or business, it’s very important you experience a physical visit before making a commitment. When people tell me they have done enough research to make them positive about relocating to Panama, I’m quick to point out one can read anything on the internet. Panama is expensive. Panama is inexpensive. The beaches are beautiful. The beaches are dangerous. The traffic isn’t so bad. The traffic is a nightmare. The truth lies somewhere in the middle, although I always think the beaches are beautiful and not at all dangerous.

Along with the strong suggestion about a physical visit, comes another suggestion; rent a car while you are here so you can experience living like a local. It can be expensive, but it is an important step. It’s also a little terrifying because traffic in Panama City can be a nightmare—especially if you want to cross the Bridge of the Americas during rush hour.

Great Public Transportation

The Metro in Panama is clean, efficient and expanding.

Panama City has great public transportation. The subway is efficient and clean. There are plenty of taxis waiting to be hailed, Uber offers everything from a quick shared ride to a helicopter escape and the buses are modern and clean. But, all of that is in Panama City. If you are planning on living in Panama City and are comfortable with public transportation, then you might be able to skip renting a car, but most people need to embrace the flexibility of having an automobile.

It may seem like a simple task to reserve a rental car, but in Panama there are things you need to know before typing in your credit card numbers. You’ll see prices starting around $7 a day and going up to much more for an “exotic” vehicle. In Panama, you will not get a rental car for $7 a day. Once here, you’ll find there are staggering add ons which will double and triple the price you have been quoted. You can reduce the final price if you know how to work around what they’ll be telling you at the rental counter.

Hertz And Avis Aren’t Interested

Render Tocumen Airport

Most major car rental companies are available at Tocumen Airport but they aren't the best option for long term rental.

Big car rental companies such as Hertz and Avis are not especially interested in the customer seeking to rent for months. The idea that you should be able to get a better price by renting long-term is not in their business model. Consequently, the price you would get from them will be higher than other, just as reliable, rental car companies. Hertz and Avis need to have a presence in Panama because, as the de facto capital of Central America, hundreds of individuals arrive daily at Tocumen International Airport (PTY) for a quick business trip, needing a car just for a couple of days. These renters are not budget shopping so they’ll pay a higher price. Hertz and Avis don’t want to have their cars tied up long term when there are plenty of short-term renters willing the pay the price.

So what should you do to get the best possible deal for a rental car? There are a lot of variables to consider.

Staying 120 Days

Just for comparison, let’s say you want to stay 120 days in Panama and you aren’t sure which community might be perfect for your next home, so you’ll be doing a lot of driving and exploring.  Everyone will give you unlimited kilometers, but check to make sure. Let’s say you arrive November 2nd and return the car March 2nd, staying during high season and high demand season for rental car companies. You’ll fly into PTY and will pick up the car at the airport. Easier to transfer all that luggage you’ll be bringing.

Rent a car and explore the beautiful Pacific Coast!

The German based rental car company Sixt, is a possible option, as is National which is US based, but more aimed at the pleasure driver than other national car rental companies. They are also very well established in Panama. There are a couple of local rental car companies, Coronado Cars and Gold Coast Auto, which operate out of Coronado and are completely focused on the long-term renter.

An Older Car?

Price is certainly important, but it shouldn’t be the only factor. I know everyone is used to always renting a new vehicle, but if that isn’t important, taking a vehicle with a couple of years and kilometers on it, might save you a bundle. The rental cars are well maintained so you shouldn’t worry about break downs or maintenance.

After research, I decided to compare in this blog, Sixt and Coronado Cars. Sixt appears as the best option for a big, branded international rental company. Hertz, Avis and National all priced out much higher. Coronado Cars presented as a great option for a locally based company.

Gold Coast Autos is another reputable local car rental provider, although it does not offer any add-ons, or have the ability to reserve on-line. It does not have a pick-up point at Tocumen, but meets renters at their accommodation in the Coronado area. They do rent everything from a SUV to a small compact for the flat rate of $250 a week and it includes insurance.

Renting The Right Vehicle

The Hyundai Tucson is a typical rental in Panama and easily navigates the some times challenging roads.

While all the rental companies offer smaller compact vehicles, I recommend, if you are looking to explore and for a few more dollars more, a larger SUV. 

The roads in Panama City are fine for a small automobile, but if you go over the bridge you’ll be much happier with a vehicle that can withstand pot holes and rougher surfaces. And, unless you really like shifting gears an automatic transmission is very nice.

The Hyundai Tucson or Kia Sportage are very popular in Panama and they provide for five passengers and enough luggage space, so we’ll compare that option along with an automatic transmission.

If It’s Not Printed There Isn’t Any Insurance

The first thing you’ll be hit with is the fact Panama requires third party insurance. Unless you can produce a written document stating you are covered, you will not be able to leave with a rental car unless you buy insurance through the rental company. Most North American car insurance is not valid in Panama. Many visitors arrive and claim their credit card provides insurance and it probably does. However, if you read the fine print, you’ll see there are variances which might render that insurance void. The car companies know all the tricks and will work hard to deny that you have coverage.

Most major credit card companies car insurance but will only provide coverage for 30 day rentals.

Both American Express and Chase Visa, like most standard credit card companies, will provide insurance, even in most foreign countries, when you use their card for the rental, but it will only be good for rentals of 30 days or less.

So, in addition to contacting the credit card company prior and arranging for them to send you a hard document indicating you are covered, you will also need to rent the car in four separate transactions—each of the four months of the 120 days you will be in Panama. Many companies will not guarantee that you’ll have the same car or will juggle the rentals to accommodate the 30-day rule and you’ll need to go back to the airport for each transaction along with a new printed document taking responsibility for the insurance. If you are covered, you must have a written document stating that and it must be in either English or Spanish, even for a German rental car company.

The base price for the Hyundai Tucson is $22.04 a day through Sixt and it is $30 a day with Coronado Cars. Coronado Cars automatically includes third party insurance in their daily pricing and Sixt charges for insurance at the rate of $11 a day, bringing their daily rate to $33.04.

$180 Pick-Up Fee!

Because Coronado Cars is located in Coronado, about an hour outside Panama City, they do not have an airport location. If you want to pick up the car when you arrive at Tocumen, you’ll need to pay an extra $90 each way for Coronado Cars to bring the vehicle to the airport and meet you once you walk out of arrivals and then pick-up the car at the airport after you leave. Sixt does have an airport location so renters would not incur the extra $180, but they do have a “Premium Location Fee” for being at the airport. This will be charged at 12% of the overall rental balance and usually is more than $180.

You Need The Panapass

All the toll roads in Panama are automated and are paid with a Panapass.

Panama has a wonderful network of roads in and around Panama City and some of those roads carry a toll. Tolls are only paid electronically and if you don’t have a “Panapass" you will not be able to drive on those roads.                                                      

I’ve seen a lot of stunned drivers pull up to the toll gate and not know what to do when they have been stopped for not paying the toll. The drivers usually just sit frozen and the few agents posted at the automated gates, often times don’t speak English. Rapidly cars start to pile up. Honking and screaming usually begins well before the driver figures a way to back up and out of the lane. Panapasses are not sold at the toll booth so it’s generally a bad scene. You’ll absolutely want to rent a car with a Panapass!

Needing a Panapass is exacerbated by construction around the airport. The Metroline 2 construction is in full swing and you pretty much have to take the toll road just to leave the airport. Sixt charges $6.99 a day for unlimited Panapass usage and Coronado Cars charges $5.00 a day.

A Smart Phone and A GPS

One thing I really like about Coronado Cars is the fact you have the option of renting a smart phone with the Waze navigation application, so along with a navigation tool, you also get a telephone. I personally would stay lost without a GPS or Global Positioning System. Sixt also offers a navigation tool, but it is not a phone. Coronado Cars rents their system at $7.00 a day and Sixt rents theirs for $9.34 a day. You can, of course, use your personal phone if you have international calling and wifi. If you don’t need a navigation system but need a phone in Panama, Coronado Cars will rent a basic cell phone for $3 a day.

Having the use of a smart phone as part of your navigation system is a real plus unless you can use your own phone from home.

When you consider that it is relatively inexpensive to rent a condominium looking out over the Pacific Ocean for 120 days, adding a rental car is a big consideration. I recommend it highly however, because you will need the freedom to explore Panama as a country and a possible new location. It’s a big decision about where you want to take the next chapter in your life and you’ll need all the tools to do the research.

So if you rent a Hyundai Tucson through Sixt with a Panapass, navigation system and third party insurance for 120 days in high season, your bill including the required 7% tax and premium location fee, will come to $6,550.20. If you rent through Coronado Cars with third party insurance, a smart phone with Waze, a Panapass, 7% tax and both a pick-up and drop-off at Tocumen International Airport, your total bill will be $4,948.75.

The problem with Coronado Cars is they have a limited supply and their cars book up quickly in high season. Sixt, and any of the other national car rental companies have more inventory and the ability to transfer cars from other locations. The price difference is considerable so think about booking early.

It’s important that I add, I don’t have any financial interest in Coronado Cars, Gold Coast Auto or Sixt. I do think it’s nice to share local information that otherwise would be hard to access and that is somewhat the case with Coronado Cars and Golf Coast Auto. Renting locally also gives you the option of knowing someone is available to answer questions and provide support during your stay in Panama. 

Happy researching!

feet sticking out of a car

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About the Author Liz Larroquette

Whether you are looking to retire in Panama, relocate your family, or buy property as an investment Liz is a wealth of knowledge you can and should tap into.

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