Practice saying "no" in the mirror
Really, see what you will look like when you say it to them. Like a dress rehersal.
I wouldn't loan them my car. If they cannot afford, for whatever reason, to rent a car, then they shouldn't be going on a ))((**(&^& vacation. Just that simple.
My favorite line is: "I really wish I could, but I cannot." I do not feel comfortable loaning other people my car. End of story.
I would loan my closest friend or another person my car if I thought it was justified. In this case, my dear, I think they were intending on "using" you to save a few bucks!