It is possible to rent a car at a number of locations across Panama City and in the other large cities of the country. There are also several car rental outlets at the Tocumen International Airport. The major companies for car rental include Hertz and Avis as well as several other well-known organizations, such as Budget, Dollar and National can be found in the airport's Arrivals area.

Drivers of rental cars must be aged 21 or above. There is an extra charge for those drivers who are aged 21 and 22 as they are considered to be a higher risk. There is no upper age limit for car rental drivers, but a valid driver’s license is required. Some rental companies may require a minimum age of 25, but the details of this will be available on the rental company’s website.

Hiring a car in Panama is one of the easiest ways to get around the country, but you need to be aware of the regulations and the hazards of driving in the country. Regulations used in Panama will be familiar to most expats as they are similar to those rules used in the US or UK. Seatbelts must be worn and the road signs are very similar. Those who drive under the influence of alcohol or drugs should be aware that this is against the law and Panama has a zero tolerance policy, so drivers who do are arrested and face heavy fines or a period of imprisonment.

When you are driving a rental car you will need to make sure that you have your driver’s license with you at all times, as well as the documentation which shows that you have hired the car. This is in case you are stopped by the police so that you can prove that you are legally in possession of the vehicle. You need to report any accidents to the relevant authorities and the car rental company as soon as possible. Leaving the scene of an accident is prohibited and it is often advisable to call the police to the scene.

The benefits of car rental include unlimited fuel, roadside assistance in the event of a breakdown, driving a car that is in much better condition than most of those on the road, fully comprehensive insurance and insurance against theft. You can also be reassured as the car will be replaced by the company if you should be involved in an accident or a breakdown.

One of the disadvantages of renting a car in Panama is the cost. When compared to the cost of taxis, buses and other forms of transport, it can be extremely expensive. The rates you pay mean that you are also insured and give you unlimited mileage on the car, but you can pay out hundreds of dollars for a week’s rental, when a few taxi journeys would not cost you anything like that amount.

The number of small accidents which take place on Panama’s roads means that it is rare you will find a rental car that does not have some minor dents and scratches. When you collect your car you need to ensure that you note (and point out to the rental company) where any problems are. You should also check that items in the car match the list given to you by the company. If they do not and you haven’t spotted it immediately, you could be charged by the rental company for damage or loss when it was not your doing.

Most cars that are rented out are small cars. Large cars do not really have a place on Panama’s roads and are fairly unpopular. Small family cars are the norm and even if you want an SUV, you will only be able to hire the smallest models. This means that it may not be a practical option for a group of people.

Car rental can be arranged online in advance and this way you may get a better rate, but car rental in Panama is still one of the most expensive ways to get around. It is ideal as a short term solution, but it does not serve any long-term purpose.