Rental traps that could cost you hundreds of dollars on vacation
Now that the summer vacation season is well underway for the first time in three years, demand for rental cars has skyrocketed.
But for the past few weeks I’ve been inundated with people contacting me to say they’ve been scammed when renting a vehicle overseas.
Vacationers have taken a nasty shock here, with companies doubling, and in some cases even tripling, the cost of a car.
During the pandemic, many rental companies have reduced operations and sold some of their vehicles to stay afloat. It is therefore perhaps inevitable that with demand returning to pre-Covid levels, costs will rise while rental companies catch up.
But the industry didn’t exactly have the best reputation for service, cost and “extras” anyway. And it’s clear to me that a lot of people have had enough.
So what should you pay attention to when renting a car? Here is my guide.
Read more: ‘The car hire company charged me an extra £1,010 after I booked it’
The cheapest is not always the best and never book on arrival
Always research car rental prices at home before committing to a specific business.
In the past, there was intense competition between rental companies to offer the lowest quote. But this was achieved by increasing overage fees and adding additional costs in other areas.
So remember that what appear to be the cheapest policies may actually be more expensive when you factor in all the catches.
If possible, do not book a car upon arrival at an airport, train station or ferry terminal.
You’ll be tired, maybe a little tired (especially if you’ve flown) and desperate to get to your destination. Car rental companies know this and are aware that you might not examine the contract too closely.
Even when you’ve pre-booked, you might suddenly find that you’re being charged extra for things that weren’t mentioned when you signed up.
Understanding all the costs associated with car rental contracts is essential, so take your time and don’t rush.
Be sure to question credit card payment
Countless people get caught up in the rental car card rule. In order to rent the vehicle, most companies will insist that the driver pay the fee and the deposit on a credit card in their name.
But why do you need a credit card to book a rental car? Or why does it have to be in the driver’s name?
It all depends on who is responsible if something goes wrong. The card you use will need to have a fixed amount of credit before the car rental company will even let you drive away with the vehicle – and they will verify that you have that too.
Frustratingly, many companies also “close” a deposit for excess damage charges, meaning you can’t use that credit for the duration of your trip.
This is because the company will automatically debit your account for any damages or litigation costs as soon as it concludes that you are liable. The money comes out of your credit card without you having the right to dispute – although you should receive written notification of the amount – and you will then be forced to file a complaint to get your money back.
Pay attention to damage deductibles
When you sign your rental contract, always look for the damage or collision deductible.
This is the amount of money you have to pay for the cost of an insurance claim in the event of an accident or damage to the vehicle that needs to be repaired. It’s not uncommon for this to be £1,000 or more – although the business will have its own insurance.
Leaving aside the magnitude of these overcharges, the main source of anger in car rental disputes stems from the claims that can arise in the event of damage.
If the rental company decides that repairs are needed on the vehicle as a result of your actions, they may conclude that you are responsible for the cost and charge your credit card.
It is not uncommon for people to be charged £1000 or more for a minor scratch to a bumper. Surprisingly, an industry representative once admitted during a radio interview I was on that repairs might not even be done!
The moral of the tale is as follows. Before leaving in the vehicle, photograph the car from all sides and check the trunk and glove box as well as the interior.
The rental company will mark the existing damage to the car on a diagram and give you a copy; have them jot down everything you spotted too.
Learn more about the safest ways to pay while on vacation.
Car rental companies will tell you that you need to take out an insurance policy to cover the excess. This is vital, so don’t leave without a policy insuring you for the excess.
However, many car rental companies insist that you take out their own policies. Excess charge cover purchased from the rental company can cost £200 or more; you can buy better fonts in the UK for £20-£40.
You will need to ensure that the policy covers the make and model of the vehicle you are renting.
Worryingly, I hear that not only are people being told they have to take out the rental car company’s own policy, but they are also being told there are heavy charges for not doing it. TO DO. So check before you go.
In the UK, the sale of insurance is a regulated business, which means you can contact the Financial Ombudsman Service if you think you have been misled by the company when buying their policy. However, laws vary around the world.
Endless gas, mileage and extras
Some car rental companies have ridiculously complicated rules regarding gas and car return. Some will insist on a full tank, others on a half-full tank, which doesn’t make much sense. Failure to meet requirements may result in additional charges.
Most contracts I’ve reviewed also charge you for mileage above a certain amount. So if you are driving in a foreign country visiting the sites as you go, you might find it to be more expensive than expected.
Finally, a bewildering array of “additional” extra charges are levied by some car rental companies. These may include an “out of hours” car pick-up, late arrival fees if your plane is late, and additional administrative fees. You’ll also typically have to pay more for everything from roof racks to child seats.
If you have a complaint about a car rental company, first address the company in the country where it is based. This can be frustrating if you have booked a car overseas as all the major brands have UK branches as well.
Put your complaint in writing (email it if you can), explaining what went wrong and what you want them to do to fix the problem.
If that doesn’t work, the European Car Rental Conciliation Service can help you deal with cross-border car rental complaints, but only within the EU. The network of European Consumer Centers can help you free of charge if you encounter difficulties.
In the UK, the British Vehicle Rental and Leasing Association can help with complaints. If the dispute is over an insurance policy sold by the car rental company, there are mediation mechanisms for banks and insurance overseas and you can find a list on FIN-NET.
If you booked through a holiday or comparison website, take a look at the page you landed on and click on the ‘About Us’ section. This will tell you where the company manager is.
You may be able to “recharge” or reclaim any money that has been charged in breach of contract.
This can be a problem because car rental contracts are written to allow companies to charge you immediately for any “damage” or “costs” you have incurred, even if you dispute it. It’s definitely worth a try, though.
Payments made on a credit card can also be disputed by filing a claim under Section 75 of the Consumer Credit Act with your card provider.