If you want to see Panama at your own pace, self-driving is the best way to go. Luckily, renting a car in Panama is easy as long as you’re familiar with the road rules and the booking process. There are a few things to know before you go ahead and reserve your rental, so read on for the best car rental Panama tips and tricks!
Where to Book a Rental Car in Panama
There are several car rental companies operating in Panama, including Hertz, Alamo, Avis, Budget, Dollar, and National, and you will find car rental kiosks at the Tocumen and Albrook airports.
But the best car rental in Panama will come from using a website like Discover Cars. This resource allows you to reserve your car online, hassle-free, while clearly seeing the range on offer and what each car includes.
Discover Cars offers the option for full coverage, which you can purchase at the time of reserving your rental. However, keep in mind that the only third-party insurance accepted in Panama is collision, damage, and theft insurance issued by the credit card company paying for the rental car, and liability insurance must be purchased in Panama.
That said, you can still use Discover Cars to book your car and then tend to additional costs when you pick it up.
Requirements for Renting a Car in Panama
Age
Driving age in Panama is 18, but usually, those under 25 are considered novice drivers. As a result, you may not be able to rent a car in Panama if you’re under the age of 25, depending on the car rental company you use (via Expat Focus).
Otherwise, you may still be able to rent a car, but it may come with an extra fee.
Documentation
To rent a car in Panama, you will need a valid driver’s license. It’s not obligatory to get an International Driver’s License, but you may need one if your home country license is not in Spanish or English.
Be sure to check with the rental company you’re using what documentation is required so you have everything you need when you arrive in Panama.
Limitations
Driving in Panama is generally safe, but there are a few limitations to be aware of. Panama City can get very congested during rush hour on weekdays, so avoid driving during this time if you’re not a confident driver.
Additionally, driving in Panama is done on the right-hand side of the road, which can make it difficult for those who are used to driving on the left-hand side. Make sure that you’re aware of the road rules and conditions before renting a car in Panama.
License
You will need a valid driver’s license from your home country in order to rent a car in Panama, and it should have been valid for at least one year prior to your trip to Panama.
Some car rental companies in Panama may require an International Driver’s License if your own driver’s license is not in English or Spanish, but this isn’t a requirement across the board. There also won’t be any need to obtain a local Panama driver’s license.
Security Deposit
Most car rental companies in Panama will require you to put down a security deposit in case any damage is done to the car while it’s in your possession. This is especially the case if you decline the optional collision coverage, but may even occur if you do purchase the extra coverage (via Visita Canas).
If you don’t purchase collision coverage, the security deposit can be considerably large–up to $10,000. Otherwise a regular security deposit can be anywhere from $300 to $1500 depending on the company and their policies.
Any damage found on the car (or inside the car) will be deducted from this amount when you return the car, before it is credited back to you. That’s why it’s important to take a photo of the car when you first pick it up as a record of its original condition, in case you need to dispute any damage.
Insurance
Liability insurance is mandatory in Panama, and it needs to be issued in Panama. So don’t bother trying to purchase insurance in your home country before you travel.
Do I Need Car Rental Insurance for Panama?
Car rental liability insurance is compulsory in Panama and must be issued by a local company.
The cost is divided into price tiers based on the different levels of coverage you’re getting, so make sure you know what is covered and what isn’t before you sign up (some forms of insurance don’t cover certain types of vehicles or extra passengers, for example).
Third Party Liability at Mex Rent a Car will set you back $18.50 per day. Optional extras include Supplemental Liability Insurance for an extra $6 per day, Roadside Assistance and Collision Damage Waiver (including Theft Protection), which costs $25 per day, and Loss Damage Waiver which costs $22 per day. Note that these prices don’t include taxes.
Extra travel insurance isn’t a requirement when renting a car in Panama as long as you’re purchasing the basic car rental liability insurance, but it is strongly recommended to cover you in areas that the liability insurance doesn’t cover.
Travel health insurance is particularly important when it comes to covering medical bills, hospital stays, evacuations, and repatriation to your home country if you need to be treated by medical professionals at home (via International Insurance).
Tips for Driving in Panama
Follow the Road Rules
The top tip for driving in Panama is to always follow the road rules. There are some that go without saying, including the fact that the use of mobile phones while driving is prohibited, but you will need to familiarize yourself with others.
A rather strange rule that you might not have heard of (or believe is real!) is that all drivers in Panama are required to have a shirt on while driving.
Along with your driver’s license and a copy of your liability insurance, you must always have in your possession an accident report form and a driver’s manual when driving in Panama, or else face the possibility of a fine if caught without it.
Wear Your Seatbelt
You are always required to wear a seatbelt in the front seat, and the fine is $75 if you’re caught without it. Those in the backseat are not required to wear a seatbelt, but for safety reasons, you should wear it if it’s available (via Living in Panama).
If you’re traveling with children under the age of five, they must be in a car seat.
Get to Know the Road Signs
The road signs are prevalent in Panama and can help you understand a lot about what you’re supposed to be doing on any given road. Some of the top signs to look out for include warning signs, information signs, prohibitory signs, and priority signs.
Know What to Do If Your Car Breaks Down
Hopefully, your car won’t break down when you’re driving in Panama. But in the event that this unfortunate incident does occur, it’s important to know what to do.
If you can, try to steer the car away from curves in the road to make yourself as visible as possible to other drivers. Then try to move your vehicle to the side of the road and contact a car towing service. You can flag down other drivers for assistance as motorists in Panama are known for being friendly.
Don’t Drink and Drive
The legal blood alcohol level for drivers is .08%–any more than this and you may face penalties, including harsh fines.
Stick to Designated Parking Areas
It can be difficult to find parking spaces in Panama City, but always stick to designated parking areas rather than non-designated areas. These will usually require some form of payment from you, but it’s preferable to leaving your car in a less secure spot.
Follow the Speed Limit
The speed limit on highways is generally 100 KM/H, but it may be less than this in some areas, so always pay attention to road signs. Meanwhile, city streets typically have speed limits of anywhere between 25 and 30 KM/H. There may be alternative speed limits in smaller towns.
Prepare for Police Stops and Checkpoints
Police stops and checkpoints are commonplace in Panama, so don’t panic when you come across them. These are here to ensure the safety of motorists.
In most cases, being stopped by police will just involve you having to show the necessary documents required for travel.
Avoid Rush Hour and Holiday Traffic
Particularly when driving through Panama City, avoiding rush hour and holiday traffic will make all the difference. Many workers in the city live rurally and commute into the city every day, so coming in and out of the city at peak times can result in hours of delay.
The same phenomenon occurs on holidays, when many Panama City locals return to rural home towns to celebrate.
During these busy times, road changes may be in place, and formerly two-lane roads may become one-lane roads to accommodate the traffic, so be aware that your planned route may change.
Important Panama Rental Car Tips
Take Photos of The Rental Car Before You Drive It
Any damage done to the car during your rental period will be charged against the security deposit you’ll put down when picking up the car. To get the full amount back and avoid being scammed, always take photos of the car before you drive it so you can prove that you didn’t cause any pre-existing damage.
Clean Your Rental If It Gets Dirty
If your car gets dirty while you’re renting it, do get it cleaned before you return it, or you could be charged with a cleaning fee.
Check the Price of Extending Your Rental When You Pick It Up
Sometimes, car rental companies may try to charge you a higher daily rate if you decide to add on days to your rental. Get the price in writing when you pick it up so you can only be charged a fair rate for extending your time.
Rent a Four-wheel-drive for Country Driving
While the roads in Panama City are smooth, rural roads tend to be in poorer condition. You may come across dirt tracks with potholes that can become quite muddy in the rain as you travel through remote areas. A four-wheel drive will be the safest option for this kind of driving.
Check the Gas Tank Before You Leave with Your Rental
It’s a simple tip, but remember to check the gas tank so you don’t begin your journey on empty. By the same token, you should return the car with the same amount of gas that it had in it when you picked it up.
FAQs About Renting a Car in Panama
Is it safe to drive in Panama?
Overall, driving in Panama is relatively safe. It may be more challenging than driving in the United States, due to the mountainous windy roads and the traffic that can seem hectic at times, but it’s not unsafe.
When driving in rural areas, you may come across potholes in the roads and one-way streets that need patience to navigate (via As We Saw It). There may also be steep, sharp turns and other elements that can make it difficult to see the conditions ahead.
This is why you need to take extra care when overtaking slower cars and trucks. Only do so when you have a clear view of what’s coming your way. Also be sure to reduce your speed limit as you drive around curves and bends in the road.
Should I rent a car in Panama?
If you feel safe driving in Panama, then there’s no reason not to rent a car. Overall, the public transport system throughout Panama is effective, and particularly in Panama City, you’ll have no trouble getting around by bus, taxi, or Uber.
However, if you plan on traveling widely around Panama, renting a car may be the best option as you’ll have more freedom to follow your own schedule.
Though the bus network in Panama is convenient, you’re limited by the routes and stops already in place, whereas you’ll be able to design your own itinerary if you rent a car and drive.
What’s the cheapest car rental company in Panama?
There are quite a few car rental companies to choose from in Panama. One of the most affordable is Dollar, which offers great prices right across its range, whether you’re looking for a mini or a larger 4×4 which is ideal for traveling into the countryside.
Do I need an International Driver’s License to rent a car in Panama?
International Driver’s Licenses are required for car rental in some countries, but Panama isn’t one of them. What you will need is a valid driver’s license from your home country.
For safety, it is recommended that you also obtain an International Driver’s License, but this is by no means compulsory (via AutoEurope).
When it comes to collisions in Panama, the tourist may be more likely to be deemed at fault than the local, and in these cases, it’s best to have as much documentation as possible to back you up. So it may be best to get an International Driver’s License to ensure you are as prepared as possible, even though it’s not required.
That said, it may be required if your home license is not in English or Spanish.
How much does renting a car in Panama cost?
Based on the prices shown on Discover Cars, renting a car in Panama varies largely depending on what kind of car you’re renting. Renting a small car for four people, for example, may set you back around $27 USD per day.
You can rent a large car for five people for around $36 per day, while luxury premium cars will cost around $80 per day. If you’re traveling with a larger group, you can rent a van for $118 per day.
Can I rent a car in Panama?
If you have a valid driver’s license (from your home country, though an International Driver’s License is recommended) then you are eligible to rent a car in Panama. Note that this is only for tourists visiting the country–if you plan on getting a residency visa, you will need a local driver’s license to drive in Panama.
The minimum driving age in Panama is 18 years (via Panama Relocation Tours). However, those renting a car under the age of 25 may be charged with an extra fee as they may be considered “novice” by the car rental company.
This varies from company to company, so make sure you’re aware of all the fees that you will have to pay before agreeing to rent a car.
What side of the road do they drive on in Panama?
Panama is like the majority of the world in that driving is done on the right-hand side of the road. This means that the steering component is on the left. If you come from the United Kingdom or Australia, this is another factor that may make driving in Panama more difficult.
