For many travelers, the question of whether or not to rent a car in Panama comes down to how much of the country they want to see beyond the well-trodden routes. Driving in Panama can be a wonderful experience, but it also has its challenges depending on where you choose to get behind the wheel. Most people find Panama City a chaotic maze of fast-moving traffic, honking horns, and aggressive drivers that can overwhelm even the most confident. However, once you leave the capital and head into the countryside, the rhythm changes dramatically. Suddenly, driving becomes one of the most rewarding ways to explore the nation, offering the freedom to pull over for a mountain view, a roadside fruit stand, or a secluded beach.
Because of Panama City’s congestion, many seasoned travelers prefer to bypass renting there and instead arrange a vehicle in more laid-back areas such as Santiago, located centrally on the Pan-American Highway, or in David, the country’s second largest city in Chiriquà province. Both of these cities make excellent bases for picking up a car because they’re calmer, easier to navigate, and already positioned closer to Panama’s natural attractions. Renting outside the capital also spares you from the stress of city driving and immediately puts you in the heart of the countryside, where the open road is inviting.
Most car rental agencies in Panama expect you to return the car to the same location you rented it from. This is important to plan for, since one-way rentals are rarely cost-effective and sometimes not available at all. That’s another reason why Santiago and David are excellent pick-up points: they are logical hubs in the west of the country, near the highlands, coasts, and border areas you may wish to visit before looping back.
Prices for rental cars are surprisingly affordable compared to other parts of Central America. Compact cars often start around $30 to $40 per day, while larger SUVs may range between $55 and $75 per day. Insurance is usually mandatory and can add an additional $10 to $15 daily, but it provides peace of mind for navigating occasional potholes or minor road bumps. Considering the freedom to stop at remote waterfalls, beaches, or small towns that buses never reach, the cost is well worth it for many travelers.
One of the best parts of having a car in Panama is the sheer number of attractions you can access at your own pace. From David, you can drive up to the cool mountain town of Boquete, head to the beaches of Las Lajas, or venture into the highland parks such as Volcán Barú National Park. From Santiago, the coastlines of Santa Catalina or Playa Venao are just a few hours away, perfect for surfers or anyone seeking quiet stretches of sand. Along the way, the roads often pass through friendly villages where you can stop for a traditional Panamanian meal and interact with locals.
For those heading toward the Caribbean, most people don’t take their rental car onto the Bocas del Toro islands, since ferries are less convenient and parking on the mainland is inexpensive. That said, a ferry does run twice daily from Almirante for those determined to bring their car across. Still, the far more popular option is to park the car in secure lots in Almirante or Chiriquà Grande for about $3 per day, leaving you free to enjoy the islands without worrying about your vehicle.
Driving in Panama’s countryside is considered safe, and for the vast majority of routes you won’t need a 4x4. Regular sedans handle the roads just fine, although you may encounter occasional potholes. The main caution is nighttime driving: since potholes are harder to spot after dark, it’s strongly recommended to drive slightly slower than the posted speed limit in the evenings. Taking it easy not only protects your vehicle but ensures you don’t miss the wandering cattle or dogs that sometimes cross rural roads.
One of the best-kept secrets about renting in David is the Malek Domestic Airport. Small, easy to navigate, and stress-free compared to Tocumen in Panama City, it’s the perfect place to pick up a rental car. Travelers flying in from the capital or elsewhere can land here and within minutes be driving toward the mountains, beaches, or even the Costa Rican border. Malek makes logistics smooth, especially for those who want to dive straight into Panama’s scenic west without the headaches of city driving.
In David, several local and international car rental companies operate near the airport. Agencies such as Thrifty, Budget, and National all have offices at or near Malek, and each can be reached directly by WhatsApp to confirm bookings or inquire about rates. Smaller local companies also provide vehicles and often have more flexible arrangements. WhatsApp is the communication tool of choice in Panama, so whether you’re arranging a compact for city hops or an SUV for mountain roads, messaging the agency directly is both fast and reliable.
Ultimately, renting a car in Panama is well worth it for travelers who value flexibility, spontaneity, and the chance to see the country at their own pace. While buses and shuttles connect the major destinations, they can’t compete with the freedom of stopping at a hidden beach or detouring into a sleepy highland town. The countryside is made for road trips, and whether you start in Santiago, David, or straight from Malek Airport, you’ll find that having your own wheels transforms the way you experience Panama. For those seeking more than the usual path, the road is waiting.
Please be careful of stray dogs on the road 🥹