Now that the summer holiday season is in full swing for the first time in three years, demand for rental cars has exploded.
But over the past few weeks, I’ve been inundated with people contacting me saying they’ve been scammed when renting a car abroad.
Tourists experienced an unpleasant shock here, and companies doubled and in some cases tripled the price of the car.
During the pandemic, many rental companies have scaled back their operations and sold off some of their vehicles to survive. So it is perhaps inevitable that with demand returning to pre-Covid levels, costs will rise as hiring companies catch up.
But the industry didn’t have the best reputation for service, costs and “extras” anyway. And it is clear to me that many people have had enough.
So what things should you look out for when renting a car? Here is my guide.
Cheapest is not always best and never book on arrival
Always research car rental rates at home before committing to a particular deal.
In the past, there was intense competition among rental companies to offer the lowest bid. But this was achieved by raising excess fees and adding additional costs in other areas.
So remember that what appear to be the cheapest policies can actually be more expensive when you factor in all the pitfalls.
Wherever possible, do not book a car on arrival at the airport, train station or ferry terminal.
You’ll be tired, probably a bit full (especially if you’ve flown) and desperate to get to your destination. Car rental companies know this and are aware that you may not study the contract too closely.
Even when you’ve booked in advance, you might suddenly find yourself being charged extra for things that weren’t mentioned when you checked in.
It is essential to understand all the costs associated with car rental agreements, so take your time and don’t rush.
Make sure you question paying by credit card
Countless people get caught out because of the car rental card rules. In order to hire a vehicle, most companies will insist that the driver pay a fee and credit card deposit in their name.
But why do you have to have a credit card to book a rental car? Or why does it have to be in the driver’s name?
It all comes down to liability if something goes wrong. The card you use will need to have a certain amount of credit before the rental car company will let you drive off with the vehicle – and they’ll check that you have it too.
Frustratingly, many companies also “separate” the excess damage deposit, which will mean you can’t use that credit for the duration of your trip.
This is because the company will automatically charge your account for any damages or dispute costs as soon as it determines that you are responsible. The money is taken from your credit card without you having the right to dispute it – although you should get written notice of the amount – and then you’ll be forced to file a dispute to get your money back.
Watch out for additional damage fees
When you sign the rental agreement, always look for additional compensation for damage or collision.
This is the amount of money you have to pay as the cost of a claim in the event of a collision or damage to the vehicle that needs to be repaired. It is not uncommon for this to be £1,000 or more – although the company will have its own insurance.
Leaving aside the sheer size of these excess fees, the main source of anger in car rental disputes stems from the accusations that can occur if there is damage.
If the rental company decides that repairs to the vehicle are necessary as a result of your actions, they may find you responsible for the costs and charge your credit card.
It’s not unheard of for people to be charged £1,000 or more for a minor scratch on their bumper. Amazingly, an industry representative once admitted during a radio interview I was on that the repairs might not even be made!
The lesson of the story is as follows. Before you get into the vehicle, take photos of the car from all sides, check the trunk and glove compartment and the interior.
The rental company will mark the existing damage to the car on the diagram and provide you with a copy; let them record everything you have noticed.
Learn more about the safest ways to pay on vacation.
Excessive insurance prices
Car rental companies will tell you that you must take out an insurance policy to cover the excess charge. This is crucial, so don’t set off without a surplus insurance policy.
However, many car rental companies insist that you take out their own policies. Excess cover bought from a hire company can cost £200 or more; you can buy better shelves in the UK for £20 to £40.
You will need to make sure that the policy covers the make and model of the vehicle you are renting.
Worryingly, I’m hearing that not only are people being told they need to take out their own car rental company policy, but they’re also being informed that there are hefty fees if they don’t. So check before you travel.
In the UK, selling insurance is a regulated activity, which means you can contact the Financial Ombudsman Service if you believe that a company has tricked you into taking out their policy. Laws, however, vary around the world.
Gasoline, mileage and countless extras
Some car rental companies have ridiculously complicated rules about gas and returning the car. Some will insist on a full tank, others on a half-full tank, which doesn’t really make sense. Failure to comply with the requirements may lead to additional costs.
Many of the contracts I reviewed also charge you for mileage above a certain amount. So if you’re driving around a foreign country and browsing the sites along the way, you might find it’s more expensive than you expected.
Finally, some car rental companies charge a confusing array of additional “extra” fees. This may include picking up the car “out of hours”, late arrival fees if your plane is delayed and additional administrative costs. You’ll also usually have to pay more for everything from roof racks to child seats.
Submitting an objection
If you have a complaint about a car rental company, first direct it to the company in the country where it is located. This can be frustrating if you’ve booked a car overseas, as all the big brands have branches in the UK too.
Put your complaint in writing (email it if you can), explain what went wrong and what you want them to do to fix it.
Failing that, the European Car Settlement Service can help with complaints about cross-border car hire – but only in the EU. The network of European Consumer Centers can help you free of charge if you have difficulties.
In the UK, the British Vehicle Rental and Leasing Association can help with complaints. If the dispute is about an insurance policy sold by a car rental company, there are overseas banking and insurance ombudsman programs, and you can find a list on FIN-NET.
If you’ve booked through a holiday or comparison site, look at the page you’ve landed on and click on the ‘about us’ section. This will tell you where the responsible company is located.
You may be able to “charge back” or claim money that was taken in breach of contract.
This can be a problem because rental car contracts are written to allow companies to immediately charge you for any “damage” or “expenses” you’ve incurred, even if you dispute it. Still, it’s definitely worth a try.
Payments made by credit card can also be disputed by making a Section 75 claim under the Consumer Credit Act to your card provider.
