Renting a car in Melbourne – The full guide

Renting a car in Melbourne can truly unlock the full potential of your Aussie adventure, giving you the freedom to discover so many places around the city, which would take a long commuting time to explore by public transportation.

In this comprehensive guide, I will provide you with all the essential tips and insights you need to ensure a smooth, enjoyable, and scam-free driving experience in Melbourne.

But let’s have a start

Where to Rent Your Car in Melbourne

When it comes to picking up your rental car in Melbourne, you’ve got three options, each with its own advantages:

From Melbourne’s Airports

Melbourne is served by two main airports:

• Melbourne Airport (MEL) – The Main Hub:
  • This airport handles about 95% of all flights into Melbourne and is typically where you’ll find the most competitive car rental prices.
  • Location: Car rental companies are situated directly in the parking area, facing Terminals 1, 2, and 3. If you arrive at Terminal 4, it’s just an easy 200-meter walk.
  • Accessibility: You can get to the rental companies by either going up to departures and using a small bridge or by easily crossing the road from Terminal 2.
  • Cost vs. Convenience: While companies located at the airport are super practical, they can sometimes be a bit pricier than those situated outside the airport. In this case, the offsite operator usually provides a free shuttle to the parking area.
• Avalon Airport (AVV) – West of the City:
  • Located about an hour west of Melbourne CBD, Avalon Airport is a good choice if your primary goal is to head straight to the Great Ocean Road or the Grampians, as it can save you around 1 to 1.5 hours of driving time.
  • Location: Car rentals are conveniently located just outside the gate of this smaller airport.
  • Cost Consideration: Flights to Avalon might sometimes be cheaper (e.g., from Sydney), but rental prices here can be higher than at Melbourne Airport, so the overall savings might not be significant. Really, the major advantage comes with its location close to the Great Ocean Road, if this is your ultimate destination.

From Melbourne CBD

• Availability: The CBD has plenty of rental options, including major players like AVIS and Budget (conveniently located next to Southern Cross Station), as well as various local and global companies spread across the city.
• Pricing: As a general rule of thumb, CBD rentals tend to charge a touch more than those at the airport. However, special deals can pop up, so it’s always worth checking.

If you’re planning to spend a few days exploring Melbourne’s city centre before starting your road trip, picking up your car directly from the CBD makes a lot of sense.

My Tip for Booking Your Car:

For the past seven years, I’ve relied on a competitive aggregator website called DiscoverCars. Think of it as the Airbnb of car rentals, where customer reviews (ranked from five to ten stars) help you find the most trustworthy companies.

I usually filter for companies rated above eight stars and then book the lowest price from there. I haven’t been disappointed yet! It’s also a great idea to book as far in advance as possible, as many companies offer free cancellation up to 24 hours before pickup, which is super handy if your plans change.

Driving Licence Requirements

To rent a car in Melbourne, you’ll need a couple of essential documents:

• A Valid Passport: Your primary identification. The Driving License is enough if you are Australian
• A Valid Driving License: Your domestic driving license is perfectly fine if it’s written in Latin letters (like English).
• International Driving Permit (IDP) – If Applicable: If your license is in a non-Latin script (e.g., Chinese, Japanese, Arabic), you’ll need an International Driving Permit. You can obtain an IDP from an automobile association in your home country for around 20-30 US dollars.

If you are far from an automobile association, you can also apply online through the International Drivers Association, and you will receive the IDP at home in no time.

Important Advice: Always carry your passport, driving license, and IDP (if required) with you when driving. The police might ask to see all of them.

Car Rental Insurance in Melbourne

Let’s talk about insurance – it’s crucial for peace of mind when renting a car in Australia.

• Mandatory Coverage: When you rent a car in Melbourne, it typically includes mandatory third-party liability insurance. More often than not, it also comes with a Collision Damage Waiver (CDW), which limits your out-of-pocket expenses to an excess amount, usually between $3000 and $7,000.
• My Personal Suggestion: Full Insurance: I highly recommend topping up your coverage with full insurance. A small scratch or dent could set you back between $500 and $1,000 when you return the car. Opting for full insurance, for example, on the competitive websites DiscoverCars I mentioned earlier, can cost as little as $15 AUD per day (roughly 8-9 Euros or US dollars), which is an absolute bargain for the peace of mind it offers.
• Credit Card Coverage: It’s also worth checking your credit card benefits, as some cards offer coverage for rental car excess. However, always read the fine print! My credit card, for instance, covers the excess but still has its own excess of $1,000, which helps but doesn’t completely solve the problem of small damages.

I talk more about car rental insurance in Australia in my dedicated guide, because there are a few unique things you must know.

Driving Conditions and Speed Limits

Driving around Melbourne is generally quite straightforward, but there are a few things to be aware of:

• Traffic: Traffic isn’t usually a major issue in and around Melbourne, except during commuting times. Try to avoid driving in the city between 7:00 a.m. and 9:00 a.m. and again between 4:30 p.m. and 7:00 p.m..
• Speed Limits:
  • Around the city: Most roads and streets have a speed limit of 60 km/h.
  • Countryside: As you head out to the countryside, limits increase to 80 km/h or even 100 km/h.
  • Shopping Areas & CBD: Pay extra attention in shopping areas and the Central Business District, where speed limits drop to 40 km/h or even 30 km/h.

Toll Roads in Melbourne

Melbourne has a mix of free and toll highways. It’s important to understand how these tolls work, as they are entirely cashless.

• How They Work: Cameras capture your number plate, and charges are automatically applied. For example, taking the M2 to the airport costs about $8, and the M1 to the southeast suburbs also has a toll.
• Payment Options:
  • Visitor Pass: If you’re staying for a few days, buying a visitor pass is a good option. You link your number plate to your credit card, and the highway management company (like Linkt) will automatically charge your card.
  • Through Your Rental Company: You can ask your car rental company to manage toll payments for you. However, be aware of the administrative fees they might add. These fees can vary significantly: some companies charge based on the number of days you rent the vehicle, others on the number of days you actually use a toll road, and some even by the number of times you pass through a toll.
  • Avoiding Tolls: You can also use navigation apps like Google Maps to find alternative routes that avoid toll roads entirely.

Parking in Melbourne

Parking in Melbourne, especially outside the CBD, isn’t too bad, with usually plenty of wide spaces available.

• Types of Parking:
  
  • Metered/Ticket Parking: These areas require payment, and signs will indicate the maximum parking duration (e.g., 1P, 2P, 4P). You’ll find typical ticket machines that accept credit cards (Visa/Mastercard) or payments via an app.
  • Free Parking: It’s worth checking around side streets or even the opposite side of a street, as one side might be metered while the other offers free parking.
  • Permit Zones: Look out for signs indicating “permit” parking. Unless your accommodation provides a permit, avoid parking in these areas to steer clear of fines.
  • Time-Limited Free Parking: Signs like “4P” mean you can park for up to 4 hours free of charge.
• My Tip for Apps: If you plan to park frequently in Melbourne, downloading the parking app associated with the ticket machines (usually, a QR code is on the machine) will make your life much easier, allowing you to pay as you go.
  
• Parking Costs (Outside CBD): Prices vary by area. For example, parking in most of South Melbourne costs around $2.70, while in St Kilda, it can be $7.
  
• Parking in the CBD: This can be more challenging. Most, if not all, CBD areas are metered, typically with a maximum parking duration of one or two hours, costing around $6-$7 per hour.
  
  • Longer Stays/Overnight: For longer periods or overnight parking, you’ll need to use a parking garage. It’s best to organise your garage parking before arriving in the CBD, as prices vary significantly. Some car parks might charge $25 for just one hour, but many offer special “early bird” and “night rates,” giving you plenty of options.

Petrol Stations and Fuel

You’ll find petrol stations aplenty in and around Melbourne.

• Finding the Best Prices: My favourite way to find petrol stations and the most economical prices is to simply use Google Maps and search for “gas” or “petrol.” Prices can vary based on the company, location, and even the day of the week, so checking around can save you up to 20%. Historically, prices have ranged from $1.60 to $2.20.
• Cost Comparison: Petrol prices in Melbourne are quite similar to those in the US and about 40% cheaper than in Europe, which is fantastic news if you’re planning extensive driving around Melbourne or Australia.
• How to Fuel Up: The process is very simple: you pump the petrol yourself (there are no attendants for this service in Australia), then head to the shop to pay for the amount you’ve put in.

Driving Safety and Car Trips from Melbourne

Melbourne is a very safe city, but a few precautions are always wise when parking your rental car.

• Car Safety: Never leave any visible objects inside your car, especially valuables. Always put them in the boot. I had a friend who left their laptop on the back seat just to pop into a cafe, and their car was broken into, resulting in damage and a stolen computer. You’ll often see “Lock it or lose it” signs, which is a no-brainer, really!.
  
• Amazing Car Trips from Melbourne: Renting a car opens up a world of incredible day trips and longer adventures:
  
  • The Great Ocean Road: This is arguably the most famous scenic drive and a must-do.
  • Mornington Peninsula: My personal favourite for a summer holiday, offering incredible beaches, beautiful blue water, great surfing on the ocean side, and some of Australia’s best wineries.
  • Phillip Island: Home to adorable penguins, amazing beaches, and fantastic surfing spots.
  • The Grampians: Located about 2 hours from Melbourne, this area boasts fantastic gorges and natural beauty.

Public Transportation Vs. Renting a Car

Deciding between public transport and a rental car depends largely on your travel plans.

• Public Transport is Great If… You plan to stay mostly within Melbourne city. Public transportation works really well, and you won’t have to worry about parking issues.
• Renting a Car is Essential If… You want to explore the beautiful countryside and destinations like the Great Ocean Road, Mornington Peninsula, Phillip Island, or the Grampians. Public transport simply won’t cut it, as there are no direct trains to these places. While you could piece together a journey using multiple forms of transport (train, regional bus, local bus), it would be incredibly time-consuming. To truly experience the stunning destinations around Melbourne, a rental car is definitely the way to go.

3 Scams to Avoid When Renting a Car in Melbourne

To ensure a stress-free rental experience, be mindful of these three common car rental scams that may happen in Australia:

1. Claiming Pre-Existing Damages: Some rental companies might try to charge you for scratches or dents that were already on the car when you picked it up. This is a definite scam!.
   • How to Avoid: Whenever you pick up your rental car, always take plenty of photos and even a video of both the exterior and interior. This serves as irrefutable proof that any existing damages were not caused by you.
2. Limited Mileage Policies with Hidden Costs: Be wary of rental offers that seem to have a fantastic daily rate but come with a limited mileage (e.g., 100-150 km per day). They then charge a high per-kilometre fee (e.g., 15-20 cents) if you exceed the limit. Car trips like the Great Ocean Road can be 600-700 km round trip. A limited mileage policy could add an unexpected $60-$70 to your bill, quickly making that “fantastic deal” not so great.
   • How to Avoid: Always opt for a car rental from a company that offers unlimited mileage.
3. Excessive Toll Handling Fees: Rental companies can add extra administrative or “manager fees” on top of the actual toll charges.
   • How to Avoid: Check with your car rental company about their toll handling policy and associated fees before you finalise your booking. As an alternative, you could consider purchasing a visitor pass directly or using navigation apps like Google Maps to plan routes that avoid toll roads altogether.

Unique Driving Experience: Albert Park Formula 1 Track

Here’s a little bonus for car enthusiasts! You can actually drive around the iconic Albert Park Formula 1 track – yes, the original one!

It’s open every single day of the year, except when there’s a race. The only catch is the speed limit, which is 40 km/h, but it’s still a truly fun and unique experience.