The paper part of the driving licence will be abolished from today, sparking fears of confusion for holidaymakers.
An online service is replacing the paper counterpart, which shows a driver's record, including offences and endorsements.
Anyone needing to show their driving record to car hire companies will now need to view their licence information online and generate a check code so details can be shared with third parties.
The changes do not apply in Northern Ireland, where licences still require the plastic photocard and paper counterpart sections.
But while the Driver and Vehicle Licensing Agency (DVLA) said car rental companies in the UK and abroad would be well aware of the changes, the AA warned of "widespread confusion".
Recovery service GEM Motoring Assist warned there could be long queues at car hire offices abroad, and a survey by money.co.uk suggested as many as 79% of people could arrive at a car hire office with incorrect documents.
Transport Minister Lord Ahmad said replacing the paper counterpart with an online service "will save motorists money and reduce unnecessary red tape".
"It will also benefit employers and vehicle hire companies," he said.
"Relying on the counterpart meant relying on a potentially out-of-date piece of paper."
A DVLA spokesman said: "Hire companies in the UK, and through them their overseas offices, should be well aware of the change.
"Many have published information for customers on their websites as their own requirements vary. Our advice to drivers is to check with their hire company what documents or information they will be asking for.
"Drivers can generate a check code up to 72 hours before collecting the vehicle and if they want extra assurance they can also download or print out an electronic summary of their driving licence record."
An AA/Populus poll showed a third of drivers who had hired a car abroad in the past five years had been asked to show their paper counterpart.
And the AA warned against tearing up the paper section of the driving licence just yet, saying those hiring vehicles overseas should hold on to their counterpart as a "belt and braces" measure.
AA president Edmund King said: "The possibility of teething problems this summer is a concern.
"While most drivers will be happy to see the back of the counterpart, there is widespread confusion as to what they should now do to ensure they stay within the law and what documentation will be required at the rental check-in desk."