When booking a business trip or vacation, travellers often spend hours trying to find the lowest airfare or hotel rate. But rarely is as much effort put in to finding the best rental car deal — and unfortunately, a few missteps in the process could cost you dearly.

According to the American Express Business Travel Forecast, an annual report that predicts global travel pricing trends, North American rental car rates should remain mostly flat through 2012, due to a highly competitive marketplace and excess capacity. But if a great deal is important to your trip, here are five steps to follow when booking a rental car online.

Step 1: Research
First, determine the standard rate for the type of car you want by checking comparison sites like Kayak.com or Expedia.com (be sure to include rates from all locations, on- and off-airport). It’s important to note that car rental prices vary from city to city, and if there is a large event in town or if you are travelling during a long holiday weekend, you might pay close to $100 per day for a car that would rent for $25 on slower days. Although there’s little you can do about them, local taxes and fees on rental cars can be excessive, so be sure they are included in the rates you are comparing.

Step 2: Check for specials
Rental car companies often list deals and specials on their websites, like discounts of 10% to 20% for pre-payment with no refunds. Minimal discounts may also be available through your affiliations with organizations such as the American, Canadian or Royal Automobile Associations.

If you make a reservation through Autoslash.com, the website continues to scour the internet for coupons and other discounts — and then automatically re-books you at the lower rate.

Step 3: Check excess inventory
If you are travelling in less than a week, check to see if there is any unsold inventory posted on Hotwire.com or Travelzoo.com, two sites that specialize in last-minute car rental deals. Keep in mind that the least expensive cars may not always be the smallest ones, since last-minute rates are based on unsold inventory, which is often made up of full-sized cars, trucks or vans.

Step 4: Bid for a better price
Once you determine the standard and last-minute rate for the type of car you want, try your luck by bidding an even lower price on sites such as Priceline.com. Keep in mind that once you agree to a price on so-called “opaque” sites like Priceline or Hotwire, no changes or cancellations are allowed — that's the tradeoff for the great deal.

Step 5: Know your insurance options
Additional auto insurance is not always necessary and can sometimes add 20% to 40% to the total cost of your rental. If you have personal automobile insurance, the coverage most likely extends to rentals in your home country and most foreign countries. Check with your insurance company to be certain about both collision and liability coverage.

If you don’t have personal insurance, the credit card you use to pay for the rental might offer coverage, but again, you should check before you depart. Homeowners or renters insurance usually covers theft of personal property from the rental car, so you may be able to decline that too without losing coverage. When picking up your car, be sure to inspect the exterior for any damage, no matter how minute and note it on your contract to avoid any extra charges.

Finally, it is always less expensive to fill up the car at a local gas station before you return it, so decline the money-losing offer to pre-pay for a full tank and bring the car back empty.

Chris McGinnis is the business travel columnist for BBC Travel