Car Rental Agreement Template

A car rental agreement is a legally binding instrument and a type of contract generating an agreement between a lessor and a lessee to rent a car for a defined period of time. This template outlines the rights, obligations, and liabilities of the parties.

• Easy-to-fill car rental agreement form that work for most U.S. states
• For short-term or long-term private car rental agreements
• Detailed car specifications including make, model, VIN, and year. 
• Establishes minimum age (21+ that applies in most states), licensing, and insurance requirements for drivers.

You can tailor clauses like security deposit and jurisdiction based on your state, and then download a printable car rental agreement as a Word or PDF document.

What is a car rental agreement?

A car rental agreement is a written contract between the car owner (the lessor) and the person renting the vehicle from the lessor (the renter or lessee), which outlines the terms under which the car is rented, including which car is being rented, how long, at what price, and so forth.

Car rental agreement vs. car lease

A car rental contract provides for the temporary use of a vehicle for a few days or a few weeks, whereas a car lease agreement provides for a long-term rental agreement from six months to several years with a car buyout option at the end of the lease.

Who this template is for

Use this template to set terms when renting a car to another person or company. Our sample agreement template is suitable for:

• Individual vehicle owners renting their car
• Small car rental businesses
• Ride-share drivers offering short-term rentals
• Fleet managers leasing vehicles to employees
• Event planners arranging temporary vehicle use

Peer-to-peer hosts

Platforms like Turo and Getaround provide a booking framework, but their terms don't cover everything. If you want to set a specific mileage cap, restrict where the car can go, or write your own fuel and damage policies, a signed private agreement supplements the platform booking. 

When to use this car rental agreement template

Use this free car rental agreement template when:

• Renting a personal vehicle to a friend, neighbor, or colleague
• Offering a vehicle for rent through peer-to-peer platforms
• Renting a car for short trips or vacations
• Leasing a vehicle to a contractor or employee for business use
• Arranging temporary vehicle use for events, travel, or seasonal needs
• Formalizing a car rental without verbal agreements

This agreement template is adapted for car rentals. If you consider leasing a truck, use our Truck Lease Agreement Template that better describes the vehicle use case.

What to include in a car rental agreement sample

Each clause below explains what it covers and what you risk by leaving it vague or omitting it entirely.

1. Party and driver identification

This includes the full legal name, residential address, driver's license number, and telephone number of the owner and of every person who will drive the vehicle.

2. Vehicle details and odometer reading

Record the make, model, year, color, vehicle identification number (VIN), license plate number, and odometer reading at the time the vehicle is rented to the customer. The mileage at pickup and drop-off is the only objective record of how many miles a customer drove the vehicle, and whether any mileage limit was exceeded or if overage fees are applicable.

3. Pre-rental inspection and condition report

Before handing over the keys, make a proof of existing scratches or damage, and note the condition of the vehicle's interior. Get the renter's signature on your inspection. Without it, damage found at return is a "your word against mine" dispute.

Practical approach:

• Walk around the vehicle together before departure
• Take timestamped photos from multiple angles
• Note fuel level and any pre-existing damage on the agreement
• Repeat the same inspection at return and compare

4. Rental period and return time

You can charge a late return fee if your return date was clear and you may also be able to report the vehicle as retained.

5. Rental rate, fees, and payment terms

Give your payment rate (e.g., per day, per week, or flat fee), when payment is due and how payment should be made. Itemize other fees:

• Cleaning (if applicable)
• Additional driver fee
• Young driver fee (for renters under 25)
• Late return daily rate

6. Security deposit

The amount and timing of the deposit are given, along with the conditions, such as damage, fuel not returned, exceeding mileage limit, and unpaid fees after rental.

Example clause:

"The Renter shall pay a security deposit of $[AMOUNT] at the time of signing. The deposit will be returned within [X] business days of the vehicle's return, less any deductions for damage, fuel shortage, excess mileage, late fees, or unpaid charges. The Owner will provide an itemized statement of any deductions."

7. Mileage limits and overage fees

To limit the distance the renter may drive, include a daily or total mileage allowance, and a per mile overage fee. Record the odometer reading on the initial agreement and the final payment to calculate the distance driven at the start and end of the rental.

Example clause:

"The rental includes [X] miles per day. Any mileage exceeding this limit will be charged at $[RATE] per mile. The odometer reading at pickup is [READING]. The Owner will record the odometer reading in return and invoice any excess mileage from the security deposit."

8. Fuel policy

The most common version is full-to-full: you get the car full and, if you do not return it full, the cost of refilling is deducted from your deposit.

Example clause:

"The vehicle will be provided with a full fuel tank. The Renter agrees to return the vehicle with a full tank of fuel. Failure to do so will result in a refueling charge of $[RATE] per gallon, plus a $[FEE] service fee, deducted from the security deposit."

9. Authorized drivers

Other drivers not listed are unauthorized drivers. If an accident occurs with an unauthorized driver, your insurance may not cover the claim, and you will have limited options against the driver unless your contract states otherwise.

In some states, such as Florida which follows the "dangerous instrumentality doctrine" and makes automobile owners responsible for the negligent acts of anyone authorized to operate their vehicle, limited authorization is necessary.

Example clause:

"Only the following individuals are authorized to operate the vehicle during the rental period: [NAMES]. Operation of the vehicle by any unauthorized person is a material breach of this Agreement and may result in immediate termination and forfeiture of the deposit."

10. Geographic restrictions

If you don't want the car driven out of state, across the country, or into areas where your insurance doesn't apply, say so.

Example clause:

"The vehicle may only be operated within the state of [STATE]. Any use of the vehicle outside this area requires prior written consent from the Owner. Unauthorized use outside the permitted area is a material breach of this Agreement."

11. Prohibited uses

Common prohibited uses to include:

• Using the car for rideshare or delivery services (Uber, Lyft, DoorDash)
• Subletting or loaning the car to a third party
• Off-road driving or use on unpaved roads
• Racing or speed events
• Transporting illegal substances
• Towing or hauling without prior written consent
• Driving under the influence of alcohol or drugs

12. Insurance requirements

Example clause:

"The Renter must provide proof of valid automobile insurance at the time of signing, covering a minimum of $[AMOUNT] in bodily injury and $[AMOUNT] in property damage liability. The Renter's insurance is primary. The Owner's insurance, if any, is secondary and does not substitute for the Renter's required coverage."

13. Damage, accidents, and repairs

The renter should be required to report all accidents and damage to the owner immediately, file a report, cooperate with insurance claims, and pay for any uncovered damage.

Example clause:

"In the event of an accident, the Renter must: (1) notify the Owner within [X] hours; (2) file a police report if required by law; (3) not admit fault or make statements to third parties without Owner's consent; (4) provide the Owner with full details of the incident in writing. The Renter is responsible for any repair costs not covered by applicable insurance, including the Owner's deductible."

14. Late return policy

Example clause:

"If the vehicle is not returned by [DATE/TIME], the Renter will be charged $[AMOUNT] per additional day or partial day. If the vehicle is not returned within [X] days of the agreed return date, the Owner reserves the right to report the vehicle as unlawfully retained."

15. Termination

Common reasons are non-payment of rent, violation of rules, unauthorized use, illegal activities, and abandonment.

16. Governing law and jurisdiction

This is important if you are renting to an out of state resident or own rentals in different states.

How to write your car rental agreement

While this car rental contract template is appropriate for most U.S. states, you may want to tweak certain clauses to fit your rental terms, risk profile, and state law.

1. Enter information of both parties. List the owner's name and address and contact information. List the renter's name, driver's license number, state of issuance, and contact information.
2. Recording vehicle details. Fill in your vehicle's data and model, year, and VIN. For luxury cars, you may include pre- and post-delivery inspections with a written condition report. In many states, a landlord may only withhold a portion of the security deposit if they document pre-existing damage.
3. Choose the rental period. State exact pickup and return date and time. Many states, including California and New York, have consumer protection laws prohibiting misleading and vague fees. Never use ambiguous or open-ended language.
4. Enter in all fees. State the rental rate, deposit, fuel policy, mileage limit and overage rate, and all other charges, including the names and amounts of each.
5. Set your use restrictions. The authorized drivers, geographic restrictions, and prohibited uses sections should not be left blank.
6. Confirm insurance. Gather proof of their renters insurance before handing over the keys, and have them include the policy number and insurer in the lease.
7. Choose governing law. Enter the state governing the terms of the agreement.
8. Sign before you hand over the keys. Both parties sign and retain a copy.