Everybody knows you should be alert when sitting behind the wheel of a high-powered car. But it pays to be just as wide-awake when you step up to the counter of a car rental agency. No other aspect of travel is quite so confusing as renting a car, and if you make a mistake it could cost you plenty in wasted time and money.

A profusion of choices awaits, but probably the most notorious is the so-called Collision Damage Waiver, an option most car firms offer at a cost of as much as $13 a day. Should you sign up for it? Probably not, if your own auto insurance covers you in case of an accident while operating a rental car. But accepting or rejecting the CDW is only one of many decisions you face that could affect the rental price. Among the others:

The number of drivers. Some car rental firms charge extra for a second driver if you want to share the driving chores with someone else. In some cases, you must pay extra even for a spouse. If two of you plan to drive, it's a factor to consider when looking for the best deal.

The age of the driver. If you are under 25, you can expect to pay substantially more to rent a car. The price varies depending on the rental firm, so you should shop around. Actually, some companies refuse to rent to anyone under 25 and most require that you be at least 21. An exception is a young business traveler whose employer holds an account with the car rental firm.

Credit blocks. In Florida, the busiest car rental market in the country, consumer groups have criticized certain unusual rental practices that may trip up an unwary visitor. Among them is the credit card block. If you don't sign up for the Collision Damage Waiver option, some rental firms may put a credit hold of up to $3,000 on your Visa or MasterCard until you return the car.

"When you get to Disney World," says Monte Belote of the Florida Consumer Action Network in Tampa, "you may have nothing left on your line of credit, and then you can't charge your hotel room." Belote's advice, if a credit block is threatened: "I would walk to the next car rental counter."

The type of rental-car operation. Is the location where you pick up the car owned by the rental corporation, or is it an independently owned franchise? Although a franchise may carry the recognized name of a national rental firm, such as Hertz or National, some of them set their own rental policies. Don't count on getting the same deal at a franchise that you might from a corporately owned location.

I had hoped to use an upgrade certificate for a Hertz rental on a vacation trip this summer. But the Hertz office in Boise, Idaho, is a franchise operation that doesn't accept these certificates, I was told. The Boise office also declined to offer unlimited mileage, which is available at Hertz's corporate locations. I chose to rent from another company that gave me unlimited mileage.

The day of the week. In Orlando, the home of Disney World, the rental market is primarily leisure, says Jan M. Armstrong of the American Car Rental Association in Washington. As a result, prices tend to be cheaper during mid-week, when fewer vacationers show up, and jump during the busy weekend. Chicago, on the other hand, is a business city. Demand for cars is greatest in mid-week, and so the price is higher. The Chicago bargains come on the weekend.

Given all these variables, determining what firm is offering the best deal can be time-consuming and frustrating. Armstrong, whose association represents all the major rental car firms except Hertz, says she always calls at least two companies when reserving a car to compare prices. And she makes sure to ask if any special rates are being offered and what, if any, additional charges will be imposed.

Among the important factors to consider when renting a car:

Collision Damage Waiver option: The CDW option may no longer be quite the irritant it has been in the past to renters. Most rental firms offer it, but frequent travelers have become aware that they may be adequately protected without it.

If you take the option -- at a cost of perhaps $2.50 to $13 a day -- the rental company assumes responsibility for any damage if you wreck the rental car or it is stolen from you. If you don't take the option, you are responsible for repairs or replacement.

If you are traveling on business, your employer's policy should cover you -- although you should make sure that the company plan offers full protection. On a personal trip, your own auto insurance policy may protect you. About 60 percent of the auto policies in effect in this country provide coverage for rentals. However, before relying on your personal policy, check to make sure what coverage is offered.

A brochure distributed by National promoting the Loss Damage Waiver, National's version of the CDW, suggests asking your insurance agent, "Will my insurance cover the replacement value of the rental car or only my personal car if my personal car is worth less?"

An additional form of protection is provided if you charge the rental to any American Express card or to the gold or corporate travel cards of Visa and MasterCard. These cards offer secondary or back-up coverage -- that is, they will pay any repair or replacement expenses not covered by your personal insurance. If you have a $500 deductible on your auto policy, for example, the cards will refund the deductible to you.

In addition, the cards provide primary coverage for rentals outside the United States, where your personal auto policy probably is not valid.

The cards have some limitations, and you should be aware of them. Exotic cars, such as a Ferrari or a Rolls Royce, are not covered nor are most recreational vehicles. Also, you and your insurance company probably will have to pay for damages upfront and then obtain reimbursement from the credit card company. Check on what coverage your card actually provides.

Fewer people are taking the CDW option, according to rental firm spokesmen, although it remains a form of protection for people who don't own cars and therefore have no auto policy. Only about 20 percent of Hertz's customers now take the option, according to Joe Russo, vice president for government and public affairs, and the figure for most rental firms is dropping across the nation.

Over the years, consumer groups have complained that some rental firms intimidate customers who are unaware of the alternatives into taking the CDW option. One alleged tactic is to demand a copy of your insurance policy to prove you are covered -- either you produce it or you are required to take the CDW option. Some firms reportedly boost CDW sales by targeting foreign travelers, who aren't savvy to rental practices in this country.

Because of these and other perceived abuses, efforts have been made at county, state and national levels in the past couple of years to ban CDWs, and with some success.

New York and Illinois eliminated CDWs in 1989, according to Russo, and New Jersey is about to do so. California has placed a cap of $9 per day for the CDW option, and Indiana has a cap of $5. In Texas, rental firms must keep the price of the CDW option "reasonably related" to the cost of providing the coverage -- and the price has dropped to about $4. In Hawaii, rental agents no longer get a commission when they sell a CDW -- presumably reducing their enthusiasm in pushing them.

In Dade County, Florida, which includes Miami, a new county ordinance requires that the price for the CDW option match the rental firm's cost of coverage. Hertz dropped its rate from $12 to $2.50 a day, says Russo, but some companies challenging the ordinance still charge the higher price. Consumer groups continue to work at the state level to eliminate CDWs in Florida, and efforts are underway in Tampa and Orlando to restrict them at the county level.

Legislation to ban the sale of CDWs nationally also has been introduced in Congress, where action is pending.

Off-airport fees: At some airports, you may have to pay extra if you take a shuttle bus to a rental firm -- including Alamo, General and Value -- that operates check-in counters off the airport premises. According to Liz Clark, a spokeswoman for Alamo, the fees can range from 25 cents to as much as 10 percent of the basic rental charge, depending on the airport. In Fort Lauderdale, says a Value reservation clerk, the fee is $3.10.

Fuel charges: Most car rental clerks will advise you to return the car with a full tank. If you don't, you may have to pay the rental firm to have the tank refilled at a rate of up to 75 percent more than you would have paid at a service station.

Alamo says it is offering yet another option: You can pay for the gas before you get the car, at a price that Clark says is competitive with the local service station market. And then you can return the car empty -- if this seems more convenient. However, you do not get a refund for any gas left in the tank.

The second driver: Rental policies vary widely, depending on the rental firm and the destination. In Florida, Alamo charges $2.50 daily for any second driver, including a spouse. If you are renting from Value, the second driver -- other than a spouse -- must have a credit card with at least $225 still available on the line of credit. Avis charges a per rental fee of $10, except for spouses and co-workers. National permits second drivers at no extra charge, although their names should be added to the rental form.

If your rental is charged to a business account, there generally is no extra charge for a second driver who is a co-worker.

Obviously, there is no way for a rental firm to detect who is driving, except in the case of an accident. If an unauthorized driver is at the wheel, the rental companies claim the contract is invalid. You may lose the CDW option, even though you paid for it, and you could lose the liability coverage, which is provided at no extra cost by most rental firms.

Under 25: Connie Dodge, a 22-year-old employee in Value's corporate headquarters in Fort Lauderdale, admits it can be a hassle to find a company that will rent to someone her age. Value does, but at an additional rate of $4.75 a day. Alamo charges $6 a day extra, and at General the rate is $7 daily. Neither Hertz nor National is in the under-25 rental market. Avis requires that you be eligible for a corporate discount. Most rental companies make an exception for business travelers 18 years and older whose employers have a corporate account.

Liability shifting: The Florida Consumer Action Network is spotlighting a rental practice in Florida called liability shifting that spokesman Monte Belote says "can be costly to the unsuspecting car renter." (Liability insurance covers any damages you may inflict on other persons or their property.)

Apparently, a few firms do not provide liability coverage, although such protection is included at no additional cost in most car rental contracts. Instead, these firms shift the liability responsibility to the renter's insurance. Liability shifting is illegal in most states, but not in Florida, says Belote.

Some rental agents, citing the lack of liability coverage, may attempt to intimidate renters into signing up for the firm's coverage, at an extra charge. "The consumer," he says, "can choose to walk away."

Advance bookings: Reserving in advance often can get you a better rate than if you simply show up at the rental counter. Alamo will book rentals up to a year in advance and guarantee today's rate no matter how much the price increases in the months that follow.