What is a Premium Location Surcharge?

When renting a car in Australia, you might encounter an unexpected fee called a Premium Location Surcharge. This surcharge can add significantly to your rental costs, sometimes increasing the daily rate by as much as 20-30% or more. Understanding what these charges are and how to avoid them can help you make rental decisions that will leave you with more money in your travel budget.

What are Premium Location Surcharges?

A premium location surcharge is an additional charge that car rental providers add to the base rental rate for vehicles picked up or returned at certain high-demand or high-cost locations. These fees are designed to cover the rental provider’s additional operating expenses at these sites, including costs such as higher rent, premium concession fees, and increased staff costs. The surcharge is typically calculated as a percentage of the entire rental fee, meaning any extras added to the rental agreement will also incur the surcharge. For example: if you require a baby seat, the percentage will be added to the cost of the baby seat as well. Lastly — and this is important — a Premium Location Surcharge applies for the entire rental period regardless of where you drop the vehicle off.

Where you’ll find these charges

The most common locations that levy premium surcharges in Australia are airports. Major hubs like Sydney Airport, Melbourne Airport, and Brisbane Airport almost universally attract these fees, as rental providers must pay substantial concession fees to operate on the airport property. In practice what this means is that the convenience of collecting your car immediately upon arrival at an airport comes at a premium price.

Downtown CBD locations in major cities mat also apply surcharge fees, particularly in Sydney and Melbourne where commercial property costs can be high. Tourist hotspots present another category — think Cairns during peak season or rental desks near popular holiday destinations like the Gold Coast. Some rental companies even charge premiums at hotels and resorts where they maintain a presence.

Strategies to minimise or avoid Premium Location Surcharges

The most effective approach to avoiding premium location surcharges is to pick up your rental car from suburban or neighbourhood locations rather than airports or city centres. Many rental companies operate branches in suburban shopping centres or industrial areas where operating costs are lower. While this requires additional transport — perhaps a taxi ride or a short trip by public transport — the savings can be substantial, often $100-300 or more on a week-long rental.

Compare rental providers carefully, as not all levy premium charges at the same locations or at the same rate. When comparing rental car quotes online, always check the breakdown of fees to understand the total cost.

For airports in particular, some rental car providers operate what is called an “off-airport” depot and provide shuttle services from the airport terminal to their depot. While there is a little inconvenience with this approach, as already mentioned, the savings can be substantial. Booking well in advance and looking for promotional deals can also help, as some providers occasionally waive location fees during special offers or for loyalty program members.

Although Premium Location Surcharges are an industry-standard in Australia, you can significantly reduce or eliminate these costs by using an off-airport depot and booking well in advance — and every dollar saved is an extra dollar you can spend on your holiday.

Important

Premium Location Surcharges apply to your entire rental

Premium Location Surcharges are typically calculated as a percentage of the entire rental fee, meaning any extras added to the rental agreement will also incur the surcharge. What this means is you you add a baby seat to your rental car, the Premium Location Surcharge will also be applied to the cost of the baby seat. Lastly — and this is important — a Premium Location Surcharge applies for the entire rental period regardless of where you drop the vehicle off.