U.S. Government Rental Car Agreement: Coverage, Drivers, and Fees

The U.S. Government Rental Car Agreement is a contract between the Defense Travel Management Office (DTMO) and commercial rental companies that gives federal employees and uniformed service members a discounted rate with built-in collision, loss, and third-party liability insurance when renting a vehicle for official travel. The current version, Agreement #5, took effect on April 1, 2024, and eliminated the former $5-per-day Government Administrative Rate Supplement fee that used to appear on every government rental.¹ The protections apply automatically when you book correctly, but they can vanish in a hurry if the rental falls outside the agreement’s terms.

Who Qualifies

The agreement covers all federal government employees and uniformed service members traveling on official business.² The definition of an authorized traveler is broader than DoD personnel and includes:

Active-duty uniformed service members on official orders.
Federal civilian employees of any agency.
Invitational travelers traveling at the government’s request under an invitational travel authorization.
NATO members of the force traveling under U.S. Government orders.
U.S. Postal Service employees on authorized official travel.

Government contractors are not listed as authorized users. And the coverage applies only to official travel within the scope of federal employment. Using the agreement’s rates for a personal side trip voids the protections entirely, because a rental used outside the scope of federal employment falls outside the agreement’s terms.³

What the Agreement Covers at No Extra Cost

Collision and Loss Damage Waivers

Every rental booked under the agreement automatically includes a Collision/Damage Waiver (CDW) and Loss/Damage Waiver (LDW) at no additional charge. The rental company absorbs the risk for vehicle damage, theft, vandalism, fire, flood, and glass breakage, among other causes. Coverage starts the moment you receive the keys or accept the vehicle, whichever comes first.⁴

Rental companies are prohibited from selling supplemental CDW or LDW to travelers who book under this agreement. If a counter agent offers those products, decline them. You already have the coverage, and the company is not permitted to charge for it on a government reservation.⁵

Third-Party Liability Insurance

The agreement requires rental companies to carry liability insurance protecting both the government and the individual traveler against claims for personal injury, death, and property damage arising from operation of the rental vehicle. The minimum limits are:

$100,000 per person per accident.
$300,000 for all persons per accident.
$25,000 for property damage per occurrence.

This liability coverage is included at no additional cost.⁶ The company must resolve collision and damage claims within 30 days when practicable.⁷

Roadside Assistance

Every rental comes with 24/7 toll-free roadside assistance at no cost. The company covers towing, flat tire changes when the vehicle has no spare, and jump starts for mechanical defects. If a breakdown can’t be repaired within two hours of your call, the company must provide a replacement vehicle when practicable.⁸

What Voids the Coverage

The rental company is not responsible for damage if the vehicle was obtained through fraud, driven under the influence, used for an illegal purpose, or operated in a race or contest. Off-road driving on unpaved or unmaintained roads voids coverage unless the company authorized it in writing at the time of rental. Other exclusions include using the vehicle to tow another vehicle or trailer, carrying passengers or property for hire, and crossing international borders without authorization.⁹

Two exclusions catch travelers off guard more than the others. If you leave the keys in an unattended vehicle and it gets stolen, the company is not liable. And if you put the wrong fuel in a vehicle when the correct fuel type is clearly marked, you are personally responsible for the resulting damage.⁹

Vehicle Class Rules

Federal travel regulations require travelers to rent the least expensive compact car available. Upgrades are allowed only for limited reasons and must be documented on the travel authorization before the trip. Valid grounds include medical needs, multiple travelers sharing one vehicle, hauling large amounts of government materials, safety concerns during severe weather or difficult terrain, and situations where a larger vehicle actually costs less than the cheapest compact.¹⁰

If you request an upgrade at the counter without prior authorization, the company may charge the difference between the reserved rate and the upgraded rate. That difference gets reported separately in the company’s monthly data to DTMO.⁵

When the class you reserved is not available at pickup, the company must give you an equal or larger vehicle at no additional cost. With your consent, it may substitute a smaller vehicle at a reduced rate instead.⁵

Who Can Drive

The minimum age is 18 for standard cars and passenger vans seating eight or fewer. For 10-, 12-, and 15-passenger vans, the driver must be at least 25. Three categories of people may drive a vehicle rented under the agreement:

The government traveler who procured the rental.
Any other government traveler in official travel status acting within the scope of their duties.
A spouse or domestic partner, if included on the traveler’s orders or authorization.

Authorized drivers 21 and older are covered at no extra charge and don’t have to be listed on the rental agreement, though you can request it. Drivers ages 18 to 20 must be listed and may be charged an underage driver fee, which is reimbursable through the travel voucher. The commercial young-driver surcharges that can add $20 or more per day at standard rates are waived for authorized drivers 21 and older.¹¹⁶

Letting anyone outside these categories drive the car voids the agreement. If an unauthorized driver causes damage, all protections disappear and the renter becomes personally liable for all losses, including third-party claims.⁹

Booking and What to Bring

Reserve through your agency’s travel system, such as the Defense Travel System for DoD personnel, or through a government-contracted Travel Management Company. These platforms apply the correct discount codes and route you to participating vendors automatically.⁶ If you book outside an automated system, you’ll need the correct Corporate ID or government discount code to link the reservation to the agreement.

Bring these to the counter:

Official travel orders or a valid travel authorization number.
A Government Travel Charge Card (GTCC) as the primary payment method. If you haven’t been issued one, a personal credit card is acceptable. Travelers without any credit card may need to leave a cash deposit equal to the estimated rental charges.¹²
A valid driver’s license matching the identification on your travel documents.

At the counter, verify that the rental agreement reflects the government rate and that CDW/LDW and liability coverage show as included at no cost. Under Agreement #5, there should be no GARS fee line item. If you see one, the reservation may not be correctly linked to the current agreement.¹ The counter agent must also notify you of any potential fees tied to toll transponders or other automated payment devices before you drive off.¹³

Fees, Add-Ons, and Reimbursement

Fuel

Refuel the vehicle before returning it. Prepaid fuel options offered by the rental company are not reimbursable under the Federal Travel Regulation. A refueling fee charged by the company is reimbursable only if you couldn’t safely refuel because of the location of fueling stations or genuine safety concerns.¹⁰

Tolls

Toll transponders are optional. The company can only charge for one if you specifically request it. If you pass through electronic toll plazas without a transponder and the company receives the bill, it can charge your credit card for the toll amount plus a processing or administrative fee, but it must send you a detailed receipt and a copy of the citation. Watch your statement in the weeks after your trip, especially if you traveled on toll roads.⁵

GPS, Winter Equipment, and Other Extras

GPS units, snow tires, and snow chains are not included. The company can charge for them only if you request them. Winterization fees may apply where local law requires special tires. The agreement broadly prohibits the company from charging for any service not addressed in the agreement unless you explicitly requested it, so surprise charges for products you didn’t ask for should never appear.¹⁴

Returns and One-Way Rentals

Government rates require no minimum rental period, no advance reservation, and no penalty for early return. If you return the vehicle late, the company may charge for the additional hours or days at the actual rental period, but it cannot add a separate late turn-in fee, and any adjusted rate cannot exceed the daily maximum. One-way rentals are permitted but come with a drop-off fee and a one-way mileage rate; unlike the standard government rate, one-way trips do not include unlimited mileage.¹⁵

After an Accident

Contact the rental company as soon as practicable. Fill out the company’s incident report when asked and try to obtain a police report if one is available. Request a replacement vehicle if the original is disabled, and get instructions on what to do with the damaged vehicle.⁴

Your agency may also require Standard Form 91 (Motor Vehicle Accident Report). Check your agency’s travel policy, since internal reporting requirements vary. The rental company handles the claim on its end and must resolve collision and damage claims within 30 days when practicable, providing a claim number and contact information once the case closes.⁷

International Rentals

Overseas locations participating in the agreement follow the same terms as domestic locations. Where a foreign country’s laws require more generous insurance than the agreement provides, the local requirement applies and the traveler gets the better deal. In countries that require drivers to carry proof of insurance, the company must keep that documentation inside the vehicle.⁷

Outside the continental United States, rates are published as a single maximum per car class, per country, in local currency. Some overseas locations may require you to purchase mandatory insurance because of local law. Rental companies must identify those locations in the participation data filed with DTMO, so confirm the specifics with your Travel Management Company or check the DTMO participating locations list before booking an international rental.¹⁶ Participation also varies by location domestically, so if you’re booking at a smaller branch or an off-airport counter, confirm participation through the official DTMO list or your agency’s travel system before you arrive.⁶

1
Defense Travel Management Office. Rental Car Agreement #5 Effective April 1, 2024
2
Defense Travel Management Office. U.S. Government Rental Car Program Factsheet
3
Defense Travel Management Office. U.S. Government Rental Car Agreement #5 – Section: Applicability
4
Defense Travel Management Office. U.S. Government Rental Car Agreement #5 – Section: Insurance, Damage Liability, and Billing for Damages and Citations
5
Defense Travel Management Office. U.S. Government Rental Car Agreement #5 – Section: Optional Equipment, Services, and Overcharges
6
Defense Travel Management Office. Rental Car Program
7
Defense Travel Management Office. U.S. Government Rental Car Agreement #5 – Section: Insurance Requirements
8
Defense Travel Management Office. U.S. Government Rental Car Agreement #5 – Section: Roadside Assistance
9
Defense Travel Management Office. U.S. Government Rental Car Agreement #5 – Section: Loss of or Damage to Vehicle
10
eCFR. 41 CFR 301-10.450 – Rental Vehicle Use and Authorization
11
Defense Travel Management Office. U.S. Government Rental Car Agreement #5 – Section: Authorized Drivers
12
U.S. Transportation Command. Defense Transportation Regulation Part I, Chapter 106 – Rental Services
13
Defense Travel Management Office. U.S. Government Rental Car Agreement #5 – Section: Notification Requirements
14
Defense Travel Management Office. U.S. Government Rental Car Agreement #5 – Section: Additional Charges, Fees, and Surcharges
15
Defense Travel Management Office. U.S. Government Rental Car Agreement #5 – Section: Rates
16
Defense Travel Management Office. U.S. Government Rental Car Agreement #5 – Section: Company Participation Requirements