iCarhireinsurance.com researched four rental companies – Avis, Budget, Hertz and Sixt – in Barcelona, Nice and Milan, to find out the costs to hire a compact car for a seven day rental from the 2-9 August in 2013 and 2014.

Milan has seen the greatest rise with the average price to hire a compact car rising by more than 50 per cent since 2013.

What would have cost holidaymakers £300 last summer will cost £464 this year.

Prices in Nice and Barcelona have also increased by an average of 27 per cent over the same period.

According to the study, the prices charged for ‘extras’ like satellite navigation systems (sat navs) and car seats for children have increased by 18 per cent.

Ernesto Suarez, founder and CEO of iCarhireinsurance.com, said: “The cost of hiring a car in Europe has gone up considerably since last summer. It’s more important than ever to make sure that you shop around to get the best possible deal and don’t waste money by spending more than you have to at the rental desk.”

According to the findings, prices assigned to ‘extras’ can vary widely between locations and providers.

Rental company Sixt’s Nice branch charged just £29 for a child’s car seat, while Budget in Milan charged £144. Budget’s quoted price was a 194 per cent increase year-on-year.

Likewise, Sixt in Barcelona charged £38 for a sat nav, while renting the same piece of equipment from Hertz in Milan cost £90.

The cost of excess insurance has gone up by an average of 26 per cent, though consumers in Milan can expect to pay £190 a week from Hertz and those in Nice will pay £70 if they rent a car through Avis in Nice.

Suarez concluded: “Bringing your own child car seat and sat nav, and buying a better, more comprehensive excess insurance from a specialist provider, could save travellers an average of £226 this summer.”