First hire your car. ... Yes, there are a lot of countries where it is a big advantage to have your own transport, especially if you must keep to a tight work schedule or have bulky luggage. Yes, it is relatively easy to book anything from a Fiesta to a limousine for a fair number of the world's destinations, including some that are surprisingly off-beat. Yes, it can be very expensive - and almost certainly will be if you neglect your pre-departure homework. One journalist acquaintance (who thought he knew what travelling was about) managed to burn up over £100 on car hire for a day and a half in Brittany, by the time he'd paid all the extras. The key rule is: don't just read the small print; work out what it actually adds up to. For example, a mileage charge really can rack up the cost, especially if you have not calculated in advance quite how far you will be travelling. And it's no use nursing a lifelong grievance against the big car hire companies after the event. By and large they do fairly well in providing a comprehensive and reliable service in a wide range of countries, if at a price.

Travelling cheaply

If you want a better deal, expect to work for it and be prepared to tramp the back streets looking for a local outfit that is halfway trustworthy - but remember that you only get what you pay for. It costs Hertz, Avis, Europcar, Budget, Alamo and the rest a hefty investment to provide that easy-to-book, uniform service across national frontiers and linguistic boundaries. Centralised, computer-based reservation networks don't come free.

If you really want to keep costs down, perhaps public transport is worth a fresh thought. Shared long-distance taxis or minibuses are surprisingly fast and cheap in many parts of the Third World, and may give you an easier time at the police, army or customs road checks that spring up every few kilometres in some countries. If it's not you who is driving, then it's not you - foreign and unfamiliar with local situations - who is called upon to judge whether it is correct paperwork or a small bribe that is required. Quite apart from the ethical dilemma, there is the practical one: having to pay unavoidable back-handers is bad enough, but offering them when they are not expected is worse and can get you into far more trouble.

It would be a pity to allow such worries to discourage anyone from doing the adventurous thing, however, and hiring a car can give you the freedom to go where you want, stopping in small villages or at scenic viewpoints when it suits you.

The big car hire firms offer comprehensive coverage over much of the developed world, along with quite a number of tourist and/or business destinations in other regions. But they certainly do not have outlets everywhere and there are many places where you will have to rely on local advice in order to find a reliable rental outfit. Advance reservation may well prove impossible. In this case, if your time is tight, ask friendly officials in the country's embassy in your home country for suggestions. Most will have a telephone directory for their capital city at least, even if it is a little out of date. For a few pounds, you can then ring to try to book in advance, or just to check availability (easier, of course, if the country is on direct dialling). This could well be a more effective strategy than asking a small high street travel agent used to selling Mediterranean package tours to attempt and arrange something for you. Try also contacting any agencies specialising in the particular region of the world that you intend to visit.

For most places, it is still definitely worth considering the big hire companies. In recent years they have developed a good range of lower-price options to complement the plusher services designed for those with fat expense accounts. And even if you are abroad for work, with a little planning you can very often make use of the special packages designed for tourists. Not only are these cheaper, but they also have the advantage of simplicity, being tailored to the needs of leisure visitors who are either not used to or do not want to be bothered with organising everything for themselves.

If you are going on holiday, meanwhile, there is something to be learned from those who have to travel for work. Clearly, big firms have buying power in the car hire market, but they also pick up a lot of experience. Here are some useful tips suggested by the travel manager of one multi-national company: read the small print; get your own insurance; avoid mileage payments and large cars; and watch out for the chance to save money on pre-booked deals.

Price in particular takes some calculation, because of the extras that are hard to evaluate exactly. Car hire is sometimes offered per mile or per kilometre, but it is best to go for an unlimited mileage deal, even if the base price is slightly higher. While you cannot be sure how much petrol you will use or how much you will pay for it, at least the local currency cost of hiring the car for, say, six days is fixed.

Legalities

Car hire forms always include references to CDW (Collision Damage Waiver) and PAI (Personal Accident Insurance), which come in addition to the cost of renting the vehicle. The customer may legally be held responsible for a share of loss or damage to the hire vehicle, regardless of who is at fault. But if you accept the CDW clause and pay the daily charge for it, the rental company waives this liability to the financial level advised. This varies from country to country, and in the US from state to state, and is dependent on the customer respecting the conditions of the hire agreement. When you rent a car you must clearly be insured against damaging both it and, more importantly, any other people or vehicles. Accepting the CDW option can prove an expensive form of protection, however, so explore other possibilities. Your own car insurance may provide cover, for instance, or by paying a supplement you may be able to build it into your general travel insurance policy.

If you are contemplating hiring a car in the USA, it is particularly important to remember that the CDW charge included in the prepayment provides only the bare minimum amount of cover required by the laws of the state in question. You will more than likely be asked to top up this cover, but check first what it will cost you and what you are paying for.

With PAI, similarly, you will find that most travel insurance policies sold in the UK include medical expenses and hospital costs. So before you decide to pay the car hire company for PAI as an additional extra check your travel insurance policy, as you may be putting yourself to unnecessary expense.

Always check whether the hire agreement allows you to drive where you want. This may seem irrelevant to anyone intending to restrict themselves to a European city, say, but if you are visiting a country where you plan to go off the beaten track and drive on unmade roads it is vital. The car hire company's conditions may insist you stick to metalled roads, thus severely limiting your freedom. Or if they do allow driving off-road, you may find they charge an additional supplement.

Driving conditions

Drivers used to British roads should be aware that in many countries even major highways are dirt or gravel roads and can become almost impassable at rainy times of year. Important trading routes are even worse, as huge trucks lurch through the mud, cutting deep wheel ruts which then fill with water.

While good maps are clearly indispensable, they do not always indicate what roads are made of and are unlikely to give you the up-to-date or seasonal information you really need before setting out. In the dry season, such routes may be dusty but otherwise much easier to use. In areas where the vegetation is stunted, the absence of tarmac can make it quite hard to follow the road.

Nor do these warnings go for tropical countries only: the famed Alaska Hi-way, from Dawson Creek in Canada through to Fairbanks, is surfaced with gravel for much of its length. When it rains, many minor roads in Canada turn into muddy bogs, with cars sinking up to their axles in black gumbo. The worst time of year can be the spring thaw - just when European visitors might be expecting conditions to get easier.

If you are likely to drive through mountains, including the relatively domesticated Alps and Pyrenees, make sure your car comes equipped with snow tyres or chains and that you know how to fit them. The Alps may be crossed by motorways and tunnels, but winter blizzards can still cause major problems. The local police make spot checks - and impose on-the-spot fines - on roads where chains or snow tyres are obligatory (normally indicated by a sign as you enter the relevant stretch). This advice is particularly pertinent to business travellers in winter who decide on the spur of the moment to hire a car and pop into the mountains for a day's skiing. Tyres that feel OK in downtown Turin won't feel so great on the nineteenth hairpin bend up to the ski resort, with no room to turn round.

It also pays to check for road construction projects, especially in developing countries, where a sudden influx of foreign aid can prompt building work on a huge scale virtually overnight. The inevitable mess and inconvenience involved has to be weighed against the advantages of a new hard-top road where there was only a mud-track before, which incidentally opens up fresh areas for relatively easy exploration with a hired saloon car. Conversely, there is always the possibility of stumbling on gaps in otherwise fairly good networks.

The basic rule is: before you do something unusual, tell the car hire outlet where you picked up the vehicle and signed it out. Should you have an accident or breakdown, telephone the hire firm before paying for expensive repairs. Otherwise you may not be reimbursed. They may want to make their own arrangements.

What car?

Deciding what size of car to hire is relatively simple. The main companies use fairly standard makes with which you will be familiar at home. On balance, you are more likely to get Japanese makes in Asia, French in West Africa and, not surprisingly, American in the US. But when working out costs, don't forget that larger vehicles are also thirstier. If you book in advance, the rental deal may stipulate that if the car of your choice is not available the agency will provide one in a higher category for no extra charge. In other words, if you reserve a small car and then turn up to find it isn't there, you may end up with one that uses more petrol - which could be an expensive (if comfortable) penalty if you are embarking on a long trip.

Do not forget the cost of petrol when you return the vehicle. Under the terms of most agreements the car is provided with a tankful of petrol and should be returned with a full tank. Check that it is full before you take it out and make the final fill-up yourself. That way you will probably pay less than the charges made by the hire company, as they usually add a refuelling charge to the cost of the petrol.

When to book?

Booking a car in advance is usually worth considering, not only for peace of mind it brings but also because you may be able to take advantage of one of the many inclusive deals offered by the major car hire companies. You can choose either to pay before leaving home in exchange for a pre-paid voucher, or to book at a guaranteed rate in local currency, or do it over the internet and pay by credit card. These rates may include not only unlimited mileage, CDW and PAI, but also airport fees, an additional driver, a full tank of petrol and local taxes. This leaves you with just the petrol to pay for and any optional extras you may agree to take locally. These inclusive rates often apply only to rentals of a minimum of a three days.

Mandatory extra charges to be paid locally are becoming increasingly frequent. In a growing number of countries, for instance, the local authority charges either a fixed fee or a percentage of the rental for vehicles rented at airports. This is passed on to the hirer by the car hire companies. Some US States, notably Florida, now levy a mandatory tax of approximately 2 per day in addition to the standard charges. Rentals in Vancouver, meanwhile, are charged an airport improvement fee. In other words, beware of the extras.

To rent or not to rent?

If you are not sure whether to rent or not, why not take a pre-paid voucher with you for any number of days? Once you are on the spot, you can then assess the possible alternative forms of transport. If returned to the outlet where they were bought, unused pre-paid vouchers will normally be refunded in full: check before you buy. Partially used vouchers are often not refundable.

Even if you have a pre-paid voucher, car hire companies always require a deposit at the beginning of any rental. In most cases an imprint of your credit or charge card will suffice; if you do not have a credit card, cash or travellers' cheques may be acceptable. Some companies may refuse to hire vehicles to drivers under 25 years of age.

When you arrive at your destination, it is always worth asking for tips about reliable local car hire firms (hotel porters are usually a good source of information). Once at the hire company's offices, check if they have any local special offers before revealing that you have a pre-paid voucher. Providing that you can fund the cost of the voucher until you return home, and that you can afford to pay again locally, this could be another way of making extra savings.

The big hire groups claim to offer the same level of service in franchise companies as in their own offices. While you will invariably be provided with the best available, remember that in some countries new vehicles are scarcer than hen's teeth, and road conditions and driving standards leave much to be desired.

If you are staying somewhere for a lengthy period or regularly visit the same destination, you can cut costs and red tape by leasing. This option - normally provided for conventional business car fleets - may prove cheaper than car hire if you, or a group of people, regularly need a car in one place. The deal can also include repairs and servicing.

Safety

The bottom line when you hire a car is safety. Does the vehicle work and can you trust it? Unless you are a natural or professional mechanic, or at least a good amateur, there isn't much chance of really assessing whether a car is roadworthy. But a few simple checks are at least a pointer as to how well it is maintained. Try the steering and test out the brakes in the hire shop forecourt, and of course listen for any faults in the first mile or two. Have a look at the tyre treads to see if they are still fairly deep and test the lights. If you are in tropical country check the air-conditioning (if any), and in very cold climes, such as Canada between October and April, make sure the vehicle is winterised: when the snows start, conditions in city centres are not indicative of those you may encounter in the surrounding countryside or even the suburbs. Make sure that any faults such as bumps or scratches are detailed on the hire form before you take the car out. Otherwise you could find yourself held liable when you return.

Red tape

Tell the hire firm if you plan to cross national or state borders, just to make sure the insurance cover extends across the frontier. And remember that while many discount rental deals allow you to drop the car off anywhere in the country where you collected it, there is usually a surcharge for leaving it at a company offices in a different country.

Getting the right paperwork is vital. Take photocopies of all hire agreements, insurance etc., as well as basics such as an International Driving Permit for non- EU countries. When it comes to officialdom, patience and politeness are probably more important than anything else.