When you come to visit Panama, consider how you’ll get around.
If you are considering relocating to Panama, either for retirement or business, it’s important you visit and explore your options before making a commitment. If you stay in Panama City you can get away with not getting a rental car, but elsewhere in Panama you will need the autonomy a car will provide.
There are several options for renting a car in Panama, from recognizable names like Hertz and and Avis and longer-term solutions created with expats and executives in mind. In Panama City, there are many public transport solutions, including a modern metro and rideshare apps like Uber and Lyft.
When you consider that it is relatively inexpensive to rent a condominium looking out over the Pacific Ocean for 120 days, adding a rental car is a big consideration. I recommend it highly however, because you will need the freedom to explore Panama as a country and a possible new location. It’s a big decision about where you want to take the next chapter in your life and you’ll need all the tools to do the research.
Great Public Transportation in Panama City
If you plan on staying in Panama City, I suggest using public transportation rather than renting a car. Driving in the city can be stressful, with standard city traffic and confusing roads.
Thankfully, Panama City has excellent public transportation and some lovely pedestrian areas. The metro and buses are modern and clean. There are plenty of taxis waiting to be hailed. Uber offers everything from a quick shared ride to a helicopter escape. The Cinta Costera and Amador Causeway offer a beautiful waterfront boardwalk and the charming historic neighborhood of Casco Viejo is best experienced on foot.
You may want to stay a few days in Panama City, then rent a car and explore the rest of Panama. There are many car rental options around the city and at the Tocumen International Airport.
Renting a Car in Panama
It may seem like a simple task to reserve a rental car, but in Panama there are things you need to know before typing in your credit card numbers. You’ll see prices starting around $7 a day, but they’ll rise as you add on standard things like insurance and an automatic transmission.
Renting The Right Vehicle
While small compact vehicles are always cheapest, I recommend getting a larger SUV if you are looking to explore. The main highway that runs throughout Panama is, for the most part, smoothly paved, but once you get off the highway the roads can get rough. You’ll want a vehicle that can withstand potholes and rougher surfaces.
Long vs. Short Term Rentals
The duration of your stay in Panama will dictate the service you use for your car rental. Big car rental companies such as Hertz and Avis are not especially interested in the customer seeking to rent for months. The idea that you should be able to get a better price by renting long-term is not in their business model. Consequently, the price you would get from them will be higher than other, just as reliable, rental car companies.
If you are only coming to Panama for a few weeks, you’ll be fine at any of the major car rental companies. For longer stays, as in two or three months at a time, you will want to look into local car rental companies, including those that specifically cater to expats and longer-stay tourists.
A Cost Comparison
For this blog post, I looked into what the cost would be to rent a standard size SUV for 120 days (with insurance) from national and local car rental companies in Panama. This included large brands such as Sixt, Hertz, Avis, and National and local companies such as Coronado Cars and Gold Coast Autos in the popular beaches area of Panama.
The Companies
There are a couple of local rental car companies, Coronado Cars and Gold Coast Auto, which operate out of Coronado and are completely focused on the long-term renter.
Sixt appears as the best option for a big, branded international rental company.
Coronado Cars and Gold Coast Auto both operate out of Coronado and are completely focused on the long-term renter. While Gold Coast Auto is younger and has less services than Coronado Cars, the two are comparable and it’s worthwhile to check the inventory of both (especially in high season, when demand is high).
Hertz, Avis and National all priced out much higher. They are all comparable in cost when it came to short-term rentals, but anything over two weeks it becomes more cost-effective to go with one of the above options
The Car
A Hyundai Tucson is very popular in Panama and it provides for five passengers and enough luggage space, so we’ll compare that option along with an automatic transmission. The base price for the Hyundai Tucson is $22.04 a day through Sixt and it is $30 a day with Coronado Cars. Coronado Cars automatically includes third party insurance in their daily pricing and Sixt charges for insurance at the rate of $11 a day, bringing their daily rate to $33.04.
$180 Pick-Up Fee!
Because Coronado Cars is located in Coronado, about an hour outside Panama City, they do not have an airport location. If you want to pick up the car when you arrive at Tocumen, you’ll need to pay an extra $90 each way for Coronado Cars to bring the vehicle to the airport and meet you once you walk out of arrivals and then pick-up the car at the airport after you leave. Sixt does have an airport location so renters would not incur the extra $180, but they do have a “Premium Location Fee” for being at the airport. This will be charged at 12% of the overall rental balance and usually is more than $180.
Be Careful with Insurance
Panama car rental companies require third party insurance. Unless you can produce a written document stating you are covered, you will have to buy insurance through the rental company. Most North American car insurance is not valid in Panama. Many visitors arrive and claim their credit card provides insurance and it probably does. However, if you read the fine print, you’ll see there are variances that might render that insurance void. The car companies know all the tricks and will work hard to deny that you have coverage.
Both American Express and Chase Visa, like most standard credit card companies, will provide insurance, even in most foreign countries, when you use their card for the rental, but it will only be good for rentals of 30 days or less. So, in addition to contacting the credit card company prior and arranging for them to send you a hard document indicating you are covered, you will also need to rent the car in four separate transactions—each of the four months of the 120 days you will be in Panama. Many companies will not guarantee that you’ll have the same car or will juggle the rentals to accommodate the 30-day rule and you’ll need to go back to the airport for each transaction along with a new printed document taking responsibility for the insurance. If you are covered, you must have a written document stating that and it must be in either English or Spanish, even for a German rental car company.
You Need The Panapass
Panama has a wonderful network of roads in and around Panama City and some of those roads carry a toll. Tolls are only paid electronically and if you don’t have a “Panapass” you will not be able to drive on those roads. I’ve seen a lot of stunned drivers pull up to the toll gate and not know what to do when they have been stopped for not paying the toll. The drivers usually just sit frozen and the few agents posted at the automated gates, often times don’t speak English. Rapidly cars start to pile up. Honking and screaming usually begins well before the driver figures a way to back up and out of the lane. Panapasses are not sold at the toll booth so it’s generally a bad scene. You’ll absolutely want to rent a car with a Panapass!
Needing a Panapass is exacerbated by construction around the airport. The Metroline 2 construction is in full swing and you pretty much have to take the toll road just to leave the airport. Sixt charges $6.99 a day for unlimited Panapass usage and Coronado Cars charges $5.00 a day.
A Smart Phone and A GPS
One thing I really like about Coronado Cars is the fact you have the option of renting a smart phone with the Waze navigation application, so along with a navigation tool, you also get a telephone. I personally would stay lost without a GPS or Global Positioning System. Sixt also offers a navigation tool, but it is not a phone. Coronado Cars rents their system at $7.00 a day and Sixt rents theirs for $9.34 a day. You can, of course, use your personal phone if you have international calling and wifi. If you don’t need a navigation system but need a phone in Panama, Coronado Cars will rent a basic cell phone for $3 a day.
The Final Results
So if you rent a Hyundai Tucson through Sixt with a Panapass, navigation system and third party insurance for 120 days in high season, your bill including the required 7% tax and premium location fee, will come to $6,550.20. If you rent through Coronado Cars with third party insurance, a smart phone with Waze, a Panapass, 7% tax and both a pick-up and drop-off at Tocumen International Airport, your total bill will be $4,948.75.
The problem with Coronado Cars is they have a limited supply and their cars book up quickly in high season. Sixt, and any of the other national car rental companies have more inventory and the ability to transfer cars from other locations. The price difference is considerable so think about booking early.
It’s important that I add, I don’t have any financial interest in Coronado Cars or Sixt. Iso think it’s nice to share local information that otherwise would be hard to access and that is somewhat the case with Coronado Cars. Renting locally also gives you the option of knowing someone is available to answer questions and provide support during your stay in Panama. The owners of Coronado Cars live in Panama and speak English and Spanish fluently.
