With so many people planning on sticking around the U.S. for summer vacations this year, car rentals are in high demand. I’ve personally been searching for car rentals for Alaska in late June and the prices are sky high for the days that I can even find a car available to rent. These high rates have also led me to wonder if I should consider using points I earned from my rewards credit cards to offset the cost.

Not only are more people renting cars for domestic travel this year, but many car rental companies have sold off thousands of cars from their fleets during the pandemic. So there just aren’t as many cars to rent right now. Unfortunately for travelers in 2021, this means higher car rental prices and lower availability until travel bounces back.

During non-pandemic times, I’d almost never recommend using rewards points for rental car bookings since you can almost always find a rental car deal through Autoslash, Hotwire, Kayak or Priceline if you don’t care what company you’re renting from. When these kinds of deals don’t exist, however, here’s what you need to know about booking rental cars with reward points.

How to use reward points for rental car bookings

There are four ways to use reward points for paying for a rental car. These are redeeming cash back rewards, redeeming flexible reward points, using car rental loyalty program rewards and booking a car with airline miles.

Cash back

Using rewards from a cash back credit card is straightforward. You simply use your credit card to book and pay for the rental, then request the reward redemption based on the rules and rates of the cash back card that you have. You’ll be charged for the rental, and then reimbursed as a statement credit. Choose a cash back card with a high redemption return for best value.

Rewards points

If you have a card that is part of a flexible reward points program, like American Express Membership Rewards or Chase Ultimate Rewards, you can book a rental car through the travel portal just like you would for booking a flight or hotel. Redemptions are still tied to the cost of rental, but will vary based on the points redemption value of your particular card.

For example, a $350 week-long car rental for San Jose, California, booked through the Chase Travel portal would cost you 23,338 points if you have a Chase Sapphire Reserve®, or 28,006 if you have the Chase Sapphire Preferred® card.

Loyalty programs

If you frequently rent cars through any of the major car rental companies like Hertz, Avis or National, you should be earning points in the rental company’s own loyalty and rewards programs. Just like airline programs, these are free to join and typically give you 1 point per dollar spent on paid rentals.

If you join the Avis Preferred program, for example, you earn 1 point per dollar spent on rentals (a minimum of 100 points per booking); and can redeem your points for free rental days starting at 700 points.

If you happen to have a stash of rental car rewards points, 2021 is a good year to use them. Likewise, if you don’t have any rental car loyalty account memberships, it’s a good time to join since you’ll be earning lots of points if you wind up paying for a car rental.

Airline miles

Nearly every airline frequent flyer program has an option to redeem your reward miles for rental car bookings. The exchange value of airline miles for rental cars typically isn’t as good as using these miles for booking flights, but it is an option. It might be worthwhile if you’re earning more miles than you can spend on flights through a co-branded airline credit card.

That same $350 San Jose car rental I could get for less than 30,000 Chase Ultimate Rewards points, for example, would cost 43,000 United miles or 52,000 American AAdvantage miles.

Best credit card reward redemptions for rental cars

When you weigh all of these different credit card reward redemption options for rental cars, cash back rewards cards and flexible rewards programs are the best programs to take advantage of when you want to cut costs on ground transportation.

When should you use your points for a rental car?

If you’re the kind of rewards points collector who likes to maximize the cents per mile you get when redeeming rewards, car rental redemptions might not be for you. Rental redemptions are almost always linked to rental prices, so if prices are high, you’ll have to pay a lot of points.

Value, however, isn’t always only about the numbers. If you really need a car rental this summer and can’t afford to pay the higher rental rates we’re seeing, using rewards points or airline miles for a car rental may still be a good value to you.

Tips for booking cars this summer

If you are looking to book a car for travel this summer, my top tip is to make your plans sooner rather than later. If you decide to pay for the car rental, most companies don’t require a deposit and have very liberal cancellation rules.

It doesn’t hurt to book a paid reservation as far as possible in advance, then cancel or change the booking as you get your flights and accommodation sorted. If you’re booking with points you’ll still want to book as far in advance as possible, but make sure you know the rules, as some airline programs won’t reinstate your points if you have to cancel your rental.

You’ll also want to double-check the rules of your credit card rental insurance if you’re planning on using the primary rental coverage of a card like the Chase Sapphire Reserve®. Most credit cards only provide the insurance benefit when you use the corresponding card to pay for the rental—and you’re likely to lose this benefit if you use your airline miles to cover car rental costs. Do this research in advance so you don’t wind up paying hundreds of dollars (or thousands of extra points) for insurance on your “free” car.

Bottom line

Booking car rentals with your rewards points may be an option you consider this year as rental rates have skyrocketed with the pandemic. Though using credit card rewards for car rental bookings isn’t always the best way to maximize redemption value for your points, redeeming rewards for a rental may still be of great value to you if covering the cost of a car makes your summer 2021 travel possible.

Have a rewards or travel question for Stephanie? Drop her a line at the Ask Bankrate Experts page.