If you want a bit of independence and the chance to get away from the hordes, then hiring a car can be an indispensable part of your holiday. The trouble is, once you've added up the cost of hire, plus insurance, plus child seats, plus mileage, plus anything else the hire car chooses to add on it can also feel like one big rip off.

But it doesn't have to be that frustrating. If you plan properly, then there are plenty of ways to keep the cost down without having to squeeze the whole family of five plus luggage for a fortnight into one of those little Renault Twingos.

The first tip is to book early. It will probably be cheaper, most companies give discounts if you book ahead, particularly if you do so online. It will also help you budget for your holiday and make it more likely you'll be able to get what you want including any extras, such as child seats.

"You wouldn't go on holiday without booking your flight or hotel room beforehand, and it's no different for car rental," says Bill Jones, vice-president for sales and marketing at Hertz Europe. "You are far more likely to get the right car at the right price by booking early."

You'll find plenty of providers online, offering deals in pretty much any location you can think of. In addition to the mainstream websites, there are also a large number of online car hire brokers, often giving cheaper quotes. But make sure you are still able to check the exact terms and conditions of hire with these. Be certain, too, that you know where the company's offices are, and not just its website or PO box address, so that you know whom to contact should anything go wrong.

However you book, check exactly what's included in the price and try to compare like for like. Most prices are for unlimited mileage, but if this is not the case make sure you know what additional charges per mile will be.

Be aware, too, of what you are getting for your money. With most of the major companies, you will usually be offered a fairly new model, and most firms will not use cars after they've passed a set mileage. With others, particularly smaller independent firms, cars may be much older and there is no set maximum mileage.

Just as you would cover yourself when driving your own vehicle, it's important to make sure you have enough insurance, so make sure the quote you get includes all the cover you need. Third party liability is mandatory in most countries, and should be included. You may also need supplementary liability insurance, which essentially beefs up your third party cover, increasing the amount you're covered for in case you injure or kill someone else or damage their property or vehicle.

This can be very valuable in the US, as some insurers will only cover you up to the bare minimum, perhaps just US$10,000. That won't help you much if you have an accident and someone sues you for US$10m. In the UK, however, many insurers will offer unlimited third party liability, so you won't need supplementary liability.

You might need a collision damage waiver (CDW) too, and you may also want to add in theft protection cover. Without these you may be liable for theft, loss or damage to the vehicle. The hire company might also offer personal injury cover, which is useful if it is not included in your travel insurance. And you might consider buying extra roadside assistance cover, too.

With all insurance, make sure you understand how much excess you would have to pay if you needed to claim. In the case of CDW or theft protection, this can run into hundreds of pounds. If the excess is, say, £300 and an accident causes damage worth £250, the insurance company won't pay a penny and you'll have to cover the cost.

"Sometimes you are able to get a policy with a lower excess, but then you'll have to pay a very high premium," says the Automobile Association's Luke Bosdet.

If you're driving in the UK, make sure the company is a member of the British Vehicle Rental and Leasing Association (BVRLA), which has a code of practice and will act as an arbiter in disputes. If you're driving in Europe and are not too confident in the local language, you may be happier using a company with a British office.

It is always a good idea to make sure you understand any limits on where you can and can't drive. While crossing the boarder between many countries is not a problem, in some cases it might not be allowed under the company's insurance policy. And in the US, for example, you often need to specify in which states you plan to drive.

Once you get to the car, here are some more handy tips that should help prevent you getting hit for charges later on:

· Check the physical state of the car and how all the controls work with a representative of the company before you drive off. If there is any damage get written acknowledgement of this from the company.
· Don't leave the car until a representative has taken charge of it and recorded the car's physical condition (Resourceful holidaymakers have sometimes filmed the condition of the car with their camcorder if a representative is not present).
· Make sure you know exactly when the car's due back, and if there's any leeway for circumstances beyond your control.
· Beware of sneaky extra charges related to the cleanliness of the car when you bring it back.
· Make sure no erroneous charges appear on your credit card bill. Companies may have charged you incorrectly, or even charged you twice (almost certainly through clerical error).

"All of this is making it sound like you need a degree in car rental to take this on," admits Luke Bosdet, "but if people familiarise themselves with what they ought to do then they're less likely to get caught out." Happy driving!

Useful contacts:
Hertz
Thrifty
Europcar
Avis
Budget
Easycar
<a href="http://www.eurodrive.com

Some of the many other websites through which you can get quotes:
Holidayautos (part of lastminute.com)
Opodo
Expedia