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You got the time off from work, you planned your trip, you know what to pack and you’re excited for a new adventure. All you have to do is book a rental car. Before you arrive at the counter, you should know what to expect in order to avoid paying more than you should.
Rental car companies were squeezed with the rise of rideshare apps and car sharing services prior to the Covid-19 pandemic. They experienced even worse financial hardship as travel restrictions were implemented in the spring and summer of 2020. Some even filed for bankruptcy.
Many sold off large portions of their fleets, and now as travel ramps back up, demand is higher than the supply of rental vehicles. This is causing rental costs to rise. While that pricing may be out of your control, you can still save money on car rentals by making smart decisions when it comes to contract details and fees.
Here are five ways that rental car companies might try to rip you off, and how to avoid them:
- Forced upgrades
- Unnecessary insurance
- Refueling options
- Damage claims
- Unexpected add-ons
Let’s say you book an economically priced rental car, only to arrive at the counter to be told there are no longer any cars available in the booked tier. At this point, a customer service representative explains that the only options are to pay to upgrade to a more expensive vehicle or wait a lengthy period of time for a car in your price range to become available.
Whether the representative is telling the truth or not, it is unlikely that the only options are to wait or pay more. In fact, many companies will—and should, whether contractually obligated to or not—cover the costs of the more expensive vehicle if a situation like this one arises.
A good route out of this jam is to ask to speak to a manager or suggest that you might take your business elsewhere or contact the Better Business Bureau. Don’t discount your power as a consumer, the power of holding up the line or of costing the business more money than it’ll make when you require the assistance of more employees than it has available.
Persuading you to buy rental car insurance is a common way rental companies try to generate extra revenue. Representatives will attempt to sell expensive insurance plans to cover everything from damage and theft to personal item loss. These selections can tack on hundreds of extra dollars depending on the length of your trip and which coverage options you might be talked into purchasing. In most cases, however, you are already covered by your own auto insurance—if not a credit card—and don’t need any of the added coverage.
The best way to avoid being talked into unnecessary coverage is to do your research before arriving at the rental counter. Check the extent of your auto insurance coverage as well as the car rental provisions of the credit card you use to make the purchase.
Here’s what you need to know before considering buying the insurance from the rental company:
- Personal car insurance generally extends to rental cars, as long as it’s for travel use and not business. However, you should confirm that your policy covers rentals, to be sure.
- If you have full coverage car insurance, meaning you carry comprehensive and collision insurance, you don’t need rental insurance.
- If your personal policy doesn’t include comprehensive and collision coverage, you should buy a Loss Damage Waiver (LDW) from the rental company. The waiver exempts you from paying for accident damage, theft or vandalism. You’re also off the hook for daily fees incurred if the rental is in the repair shop and not in use. A Collision Damage Waiver (CDW) works the same way as an LDW, but does not cover theft.
- If you have an accident with the rental car and use your own insurance, your rates may increase as a result of the claim.
- Credit card coverage typically pays out only after your personal car insurance policy limits have been tapped out.
- If you have home or renters insurance, you’re already covered if someone steals your possessions from the car.
- If you don’t own a car and don’t have insurance, the rental will automatically be covered under the state’s mandated minimum coverage limits.
If you decide that you would rather not risk an increase in your personal auto insurance rate, it is also possible to find third-party rental car insurance policies and book coverage ahead of time. Allanz Global Assistance and Insure My Rental Car are companies that may offer better deals than what you might find at the rental counter.
There are a few ways to deal with the issue of refueling the rental car upon returning it, and all have trade-offs.
Ignoring the fuel level when returning the rental car gives rental companies an excuse to take advantage of you. Some rental companies profit on the backs of inexperienced or forgetful renters by charging far more than the standard price of gas to complete the refill once the car has been dropped off. Even in states where the price of gas isn’t already nearly $4 per gallon, rental car companies in some cases have been known to charge upwards of $8 a gallon.
It should be noted that many car rental companies advertise policies suggesting their rates are “comparable” to local pump rates, but that’s not always the case. Fortunately, this fate can be avoided by filling up before bringing the car back.
Some rental companies offer “deals” where you pay for a full tank of gas upfront so you’re not charged regardless of the fuel level upon return of the car. To make this option worth the cost, you need to return the car as close to empty as possible—any extra gas left in the tank goes to benefit the rental company, which means money out of your wallet and into company hands.
Even when the car is returned with the empty light on, the rental company may still profit, depending on the cost of the fill up and the price charged to you.
The most economic option is to agree to refill the car yourself before returning it. This will ensure that the rental company does not jack up the price of gas and charge you for it. When choosing this option, however, it is important to find a gas station close to the airport for the final refill, keep your receipt as proof and even take a picture or video of the fuel indicator upon car return.
When picking up a rental car, you are expected to sign a form agreeing the vehicle was in good condition upon transfer of possession. This makes you liable for any damage found on the car after you drive it, even if the damage existed already.
Always take a moment to carefully examine a rental car before signing any paperwork and leaving the lot. Walk all the way around it and check for dents, chips or other blemishes. Be sure to photograph or video any damage that you find and bring it to the attention of a car rental representative. This will prevent you from having claims filed against you for damage you didn’t cause. Take additional pictures and video when returning the car, especially if returning a rental after hours. That way you’ll have documentation of the car’s condition after you used it and have proof to prevent any bogus damage charges.
There are a number of other unexpected, additional fees car companies may try to slap on once you’re ready to pick up a car or after you return it. For example, many rental companies charge customers exorbitant daily rental fees for children’s car seats. The rental cost can be close to what you might pay for a new seat. If traveling with children, consider bringing your own car seat. It’s a pain to haul around the extra gear, but car seats can be checked with luggage for free with most airlines.
Here are a few other potential unexpected add-ons and fees to be aware of:
- Electronic toll payments fees
- Satellite radio
- GPS navigation system
- Late return charges
- Early return fees
- Mileage limits
- Roadside assistance fees
- Tire disposal fee
- License recover fee
- Airport surcharges
- Energy recovery fee
- Roadside assistance
- Out-of-state charges
- Alternate location drop-off fees
- Additional drivers
- Underage driver fees
While some of these unexpected fees can be avoided with forethought, research and planning, others may be inevitable—or just taxes passed on to you, the consumer. With this in mind, accounting for some extra charges associated with your rental car when creating your travel budget is a good idea.
Booking Ahead? Watch Out for Scammers
While it may seem like a good idea to reserve a rental and pay for it before your trip, it is important to be extra vigilant when making rental car arrangements online.
As travelers clamor to find rentals during a shortage of available vehicles, rental car prices are increasing due to the high demand. The demand has opened the door for scammers who prey on customers attempting to make online rental car reservations in preparation for travel. These scammers pose as rental car companies—sometimes even creating fake websites and advertising fake customer service phone numbers—in an attempt to trick hopeful and unsuspecting vacationers.
To avoid scams like this, choose a rental car company you know, or thoroughly research the company you find. Also, be sure to pay with a credit card (on which claims can be disputed) rather than a debit or gift card.