Free Car Rental Agreement Templates & Forms (Word)

free car rental agreement template 1

A car rental agreement template is an agreement between the owner of the car and the person renting a car. The agreement states that the car was taken in good condition and will be returned in good condition. The reasons for hiring a car are traveling, car damages resulting from accidents, a private need, and more.

What is a car rental agreement?

A car rental agreement is a legal document that comes into handy while requesting a car hire service. You must fill and sign this document as it legally binds you the car rental company. The main purpose of this agreement is to specify the terms and conditions that both parties have to follow during the car hire process.

Furthermore, every rental services have different terms and conditions that parties have to follow during the car rental period. Before signing the agreement, you must read it keenly and understand every aspect of the agreement because it holds you liable for the car throughout the rental period.

How to write a car hire agreement?

The two parties bring together by a car hire agreement. These two parties might be strangers or people who have met before. The agreement must be binding strongly. This is because it is the guarantee between them that the car was hired in good condition and will be returned in good condition.

Moreover, every detail of the car condition at the time of hire and the details of the person hiring should be included in the agreement. This way, you can claim compensation from the person who hired your car under the law in case of defaulting. Include the following details in the car hire agreement;

Details of the car

In the first paragraph of the agreement, the vehicle rental agreement should capture the following details of your car;

  • The make of the car
  • Model
  • Year of manufacture
  • Engine capacity
  • Vehicle identification number
  • Body-color

Terms of rent

Typically, the rental duration, with the person renting your car, begins from the day and hour you sign the agreement. It runs through the agreed number of days until the car is received to you in good order and condition. The vehicle hire services terms include the following;

  • The date and hour when the car was hired
  • The returning date that indicate when the car shall be returned
  • For extending or shortening the rental period, an allowance

How will the car be used?

You, as the owner of the car, must know the reason that why the person is renting the car or what they intend to use it for. Include your terms on what the car should be used for under the law in your car rental agreement template. This is because the person may hire your car to use for criminal purposes or for carrying narcotics.

In addition to this, some may also hire your car for sub-leasing. So, you should clearly indicate in the agreement that the car is not for sub-leasing until there is a mutual agreement towards that purpose. Keep in mind that according to the places your client intends to visit, set the geographical region within which your car must not exceed. The form must include the following information;

  • The person renting
  • The driver (if the renter has a driver)
  • Any additional driver
  • Vehicle operator’s driver’s license number


At the time of signing the car rental contract, include the vehicle’s mileage and specify if there will be any limitation of mileage. Mention the cost per mile on any extra mileage the vehicle shall cover in the case of mileage limitation as well as the reading at the time when the vehicle is returned. In the mileage section, include the following;

  • During departure, mileage reading
  • Reading during arrival
  • Total mileage covered


The car rental agreement must add the payable fees that can be calculated on a 24-hour basis or per mile basis. There is a down payment before the renter departs that they should make as a commitment fee or security for the car. The details of the fuel must be mentioned at the time of rental and check whether the gas tank was full, half, quarter, or whatever amount. You will be protected from incurring gas-related losses in case the fuel shall be charged or the renter should return the vehicle with the same amount of gas.

Moreover, there might be other situations in which the renter hires a car with an empty tank and may return it in the same condition. There must be a line showing any excess mileage and the total amount payable that are the following;

  • Rate per day/ per mile
  • Deposited amount
  • Fuel available
  • Excess mileage charges
  • Net fee payable


Sometimes, the renter may use the car against the agreed terms. You may notice that the car requires repairing or replacement of some accessories such as a spare wheel, spanner, or jack. Hence, ask for security to protect such losses. It is the amount deposited to take care of any repairs or replacements as a result the way renter used the car.


Any losses that could be incurred due to accident or theft while the renter owns the car then the company insuring the vehicle takes care of them. But, the insurance asks for deductibles at times. In case of an accident, the car rental contract should specify who will be responsible for any insurance excesses/deductibles. In this situation, it is the renter’s insurance that should take care of the deductibles. Also, the renter should give evidence that they have the cover.


Include an indemnity statement that states against any legal suits, losses, or damages that could incur as a result of the renter carelessness, the renter indemnifies himself not to hold the owner responsible. The renter carelessness may include road user rules, mishandling of the vehicle, careless driving, parking fees, and more.


The warrant should state that at the time of rental, the vehicle was in good condition and the renter agrees to use the vehicle within reasonable road conditions and rules. For operating the vehicle, the renter has the necessary legal documents and the vehicle must be returned in good condition and order.


In the end of the car rental agreement, leave space for signatures for both parties, date signed, and any witness. You should also check the pinewood derby templates.

Which factors disqualify you from renting a car?

Here are the factors that disqualifies you from renting a car;

Invalid license

A car rental company or an individual may not provide the services in case your license is not renewed or has been expired or suspended. It is essential to make sure before renting a car that your driver’s license is valid. In case, your license has been expired or suspended then first sort out this issue with authorities.

Reckless driving

You will not be qualified from renting a car in case you have a record of recklessly driving on the roads. Always drive your car well in order to avoid such frustrations as well as be mindful while driving.


If car rental service provider finds in your records several accident reports then they could deny you their services.

Drunkenness and drug abuse

At the time of a car rental, if you are drunk and intoxicated then the car rental service provider may deny you renting. While driving, the law demand you to be sober so keep yourself away from excessive alcohol intake and misuse of narcotics.

Before signing an agreement, check the car items:

You should check the following car items and then tick them before signing the agreement;

Spare wheel

According to law, every vehicle has a spare wheel that would be helpful if tire punctures or bursts. A replacement could be claimed by the owner.

Wheel spanner and jack

You will have a rough time without a wheel spanner and jack when you require to change a wheel. In addition, when you return the vehicle, the owner could charge you.

Engine oil and brake fluid

To check whether the oil is at right level, use the deep stick. Also, check the brake fluid level.

Cooling system

Make sure that the car cooling system have to be well supplied with water and coolant fluid.

Wheels treads

In order to get a good grip while driving, make sure that the treads must be the right size.


If you want comfortable driving then ensure that the steering should have enough power.

Protecting your rental car from accident or theft:

Here are some ways to protect your rental car from accident or theft;

Insure your car

It is important for you as a car rental service company that for all your cars you must have full vehicle insurance. Getting an insurance cover as a company is important. For all your vehicles, you can choose one or more fleet insurance policies.

Install a car tracker

It is an electronic tracking device that assists you in monitoring the location of your car. Unfortunately, if your car has stolen, then the law enforcement agencies can use the tracker to track down your car’s location. GPS is used by the car tracking device to locate cars wherever they are packed.


In conclusion, a car rental agreement template is a legal document that brings two parties together and guarantees that the car was received in good condition and will be returned in good condition. Include all the details regarding the car at the time of rental.

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