Renting a car in Australia is expensive.  Do not be fooled if someone tells you otherwise.  As of today, the cheapest you can rent daily is roughly A$55.  At least by U.S. standards, where depending on where you live a car rental can be as low as US$15 pre-fees, the Australian price for a car rental is high.  (For those that don’t know, the Australian dollar is basically at parity with the U.S. dollar and has been for some time.)  However, given the wealth of things to do within a day’s drive of Melbourne, renting a car has become something of a way of life for me.  I would say our household is currently at one rental a month.

There are essentially two options for renting a car:  (i) rent through a major dealer, e.g. Budget, Avis or Hertz or (ii) rent through a local shop.  In most major cities and tourist destinations there will be local shops that offer discounts for longer bookings and older vehicles (they may also have backpacker campervans and beat up vehicles for purchase).  Because they are smaller outfits, there may also be some room for negotiation.  These options can generally be found by Googling or by calling backpacker-type hotels and travel businesses for recommendations.  Here in St. Kilda, I have used Access with good results.

As a general rule, you are able to drive in Australia, as a visitor, on a valid overseas driver’s licence that covers the same vehicle class for a maximum of three months after arriving in Australia, provided that the licence is in English or has an English translation.  However, the laws on this subject vary from state to state.

One thing to keep in mind when renting a car in Australia is that the restrictions on what one can do may differ from those familiar to visitors.  For example, it is not uncommon for Australian rentals to prohibit pets and ski equipment in the car.  Are you planning on using a ferry?  Do you think you will go for a spin in the Outback?  Ask first.  That unpaved country road on the way to the vineyard you’ve heard so much of through word of mouth—you may want to give it a little more thought.  Make certain you ask about restrictions and understand the consequences of violating them prior to driving the car away from the lot.

The A$55 you pay daily will not include fees.  It doesn’t include accident and damage insurance and there may be a processing fee for electronic tolls.  You should research your insurance coverage and other options before arrival.

By all accounts, driving on the left side of the road is not as difficult as it might seem (at least in the city).  Australians aren’t overly aggressive drivers and where there is a flow of traffic and a clearly visible dividing line to guide you, driving in a foreign environment is more easy than one might think.  A common pitfall is night driving in the country, where people used to driving on the right can easily find themselves drifting.

Finally, I would recommend asking your rental company about any traffic rules and laws that are unique to where you are going.  For example, in the Melbourne CBD hook turns are used to allow the free flow of tram traffic and in Victorian alpine resorts in the winter a car is required by law to carry snow chains (even if those chains aren’t affixed to tires).

I would love to have a vehicle of my own while here in Melbourne.  Unfortunately, the stars have not aligned to make this a financially viable option.  Until the day when I am able to drive off into the sunset in my own vehicle, my verdict is that, while a bit pricey, Australia isn’t the worst place to rent a car.