It's difficult (for me) to follow your story because you do not mention the rental car brand, the location, or the actual amount of the overcharge. Did they submit the charge to the credit card company denominated in dollars or denominated in local currency?
Are you asking for advice on disputing this transaction or only to avoid similar problems in the future?
No, I am not seeking advice on how to go about disputing it. I know how to go about that. And I avoided mention of the company, location, and actual amount of the "overcharge" (about 10%, which was about $50 extra) because I was looking for generic advice about the handling of charges billed in one currency, paid in another.
If we were in a restaurant, prices would be stated on the menu in the local currency, the total owed would be stated in the local currency, and the credit card company would "translate" it to $ USD at a market rate of exchange, perhaps throwing in their own 2 or 3% vig to the total appearing on our statement. Those situations are straightforward enough and not my concern. I am asking about hotel or rental car, though, with a sum originally quoted and confirmed in $ USD, which the local merchant later boosts by changing the rate in $ USD into the local currency using the merchant's own arbitrarily inflated exchange rate before ringing up the credit card charges.