Croatia is expected to see a large increase in tourists this summer after it joins the EU - and its decision to cut sales tax on tourist services by 15% from January.
Michael Bond of 121carhire.com said: "Croatia is taking great steps to boost its tourism and economy to help it compete with traditional holiday hotspots such as Spain and Turkey.
"With over 2,700 hours of sunshine per year and its white sandy beaches, it is fast becoming a popular place to holiday.
"Our recent figures found that the most popular places in Croatia for car hire to date are Dubrovnik, Pula, Zagreb and Split airports respectively, and we are preparing for an even higher demand in these areas this summer."
With more than 1,000 islands dotted around its coast, Croatia has reportedly seen a 43% increase in bookings for 2013.
Tourism currently accounts for one fifth of the nation's economy.