Worst Rental Car Rip-offs
I used to be able to game the car-rental system. How? I’d reserve a compact; because they’re the least expensive cars, agencies would run out of them first. Result: I’d get a free upgrade to a bigger car.
Times have changed. Now not only does that tactic fail, but car rental rates are going through the sunroof. On an assignment in Atlanta this summer, I ended up in a claustrophobic Ford Focus that cost me more than $80 a day.
The main reason for the rising costs? Smaller rental fleets. And fewer available cars means higher prices. The average rate for a weeklong rental of a compact car at an airport location last year was $335.05, up a whopping 51 percent from 2008, according to a report by the Abrams Consulting Group.
Adding insult to injury are the numerous ways rental agencies dig even deeper into your pockets. Take insurance, for instance. And notice that car rental companies don’t use the word “insurance” but instead refer to Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW). That’s because CDW and LDW don’t insure anything, but simply stipulate that the rental company will waive its right to come after you for damages to the vehicle.
You can also buy supplemental liability protection, personal accident insurance, and personal effects coverage in case of theft. Typical cost for full coverage? Figure as much as $35 a day. The fact is, though, your own personal car insurance and/or credit card perks very well may cover you.
Another issue? Car rental taxes and surcharges have skyrocketed. That’s because municipalities know most car renters are out-of-towners, so they have no political voice to complain about outlandish local taxes—a form of taxation without representation. It would be one thing if those taxes went to pay for improved rental facilities, airport upgrades, and the like, but in fact they go to pay for such things as sports stadiums, convention centers, and other local projects that the renter probably will never use.
So what can a smart consumer do? First, read the fine print. Know what taxes you can expect to pay. Demand that you be given the type of car you asked for or be given a free upgrade. Avoid useless add-ons like prepaid gas.
And finally, think whether you really need to rent a car at all. When you consider the extras involved, like parking fees, fuel, and valet gratuities, you might just opt for public transportation instead.
Renting a car at the airport is expensive—in fact, an average of about $150 a week higher than renting from an off-airport location. But watch out. You may have to pay for a taxi to get there, since those off-site locations don’t always offer shuttle service from the airport.
Taxes and Fees
Know the real rate you’re paying. Local taxes, concession recovery fees, additional driver, customer facility fees, drop-off, and other charges can almost double the base rate. Ask how much those fees will be when you book.
Choose your rental company based on cost, not on your membership in their loyalty program—especially if you rent infrequently. Loyalty programs are designed primarily to streamline the pick-up process (skip the check-in counter, head straight to your car), not to give you a lower price. They’re great if you’re a frequent business traveler; they’re much less useful if you’re a less frequent leisure traveler.
Prepaid Gas Option
Don’t accept the prepaid gas option. If you do, any gas you leave in the tank is like money in the agency’s pocket. Unless you really think you can coast into the car lot on fumes, chances are good that there will be gas in the tank when you return the car. Choose instead the option that requires you to return the car with a full tank. You’ll usually find gas stations near the rental lot where you can fill up.
Find out when the agency closes for the night and when it opens in the morning. Unlike big-city airport locations, many smaller agencies in outlying cities are not 24-hour operations. You might find the agency closed when you try to pick up or return the vehicle. You might even end up paying for an extra day.
Rule of thumb when it comes to rental car insurance: don’t accept the agency’s CDW or LDW unless you have no alternative. Chances are good that you’re covered by your personal car insurance, through your credit card, or by a combination of both. But don’t be risky; check with your insurance agent to be certain.
Locking in Your Rate
Once you make your rental car reservation, how often do you check to see if the price has dropped? No one does that. And the rental agencies certainly don’t text you if prices go down or coupons become available. But now someone’s got your back. A new online consolidator called autoslash.com actually searches out those discounts for you, applies them to your rental when you book, and emails you if rates drop so you can rebook at the lower price.
Aging Car Fleets
As if the higher rates and multiple taxes weren’t bad enough, agencies are keeping their rental cars longer. It used to be that rental companies sold off their cars when the odometers hit 10,000 miles. Nowadays it’s not uncommon to rent a car with 15,000–20,000 miles. And according to a USA Today panel, those cars aren’t just older, they’re dirtier too.
If you were told that a car rental company would charge you an additional $55 a day because of where you live, you’d be outraged. Welcome to New York City, where sister companies Thrifty Car Rental and Dollar Rent A Car tack on extra fees for some Big Apple residents renting in New York, Newark, NJ, or Philadelphia—specifically, $11 for Queens, $53 for the Bronx, and $55 for Brooklyn. Hey, you could always move to Staten Island!
Loss of Use Charges
Let’s say you used your personal auto insurance for your rental car and had the misfortune to get into an accident. At least you’re covered, right? Well, not entirely. Rental companies retain the right to soak you for hundreds of dollars for what they call “loss of use”—that is, money they lost by not renting the car while it was being repaired. Sorry to tell you, but your personal insurance won’t cover that charge—even if the accident wasn’t your fault.
Most rental companies require you to initial a document stating that you have inspected the car before leaving the lot and that there was no visible damage. And yet untold numbers of renters have been notified after returning their cars that a dent was discovered or a bumper was scraped and that they had to pay for the repairs. How can you defend yourself against false damage claims? Easy—snap a few pictures of your ride with your digital or smartphone camera, both when you check it out and when you return it. The exact condition of the car in both instances will show up in your pictures.
Try this out for yourself on one of the car rental sites. Check the price for a one-day rental. Then try a two-day rental; you’ll notice the per-day price stays about the same. Do the same for a three- and four-day rental and, like magic, watch the per-day price start to drop. By the time you get to a weeklong rental, though, the per-day price has gone back up again. Always check the price for a shorter and longer period than what you might need to see if there is a significant difference in the cost per day. You may be able to change your plans a bit and save a bundle.