Seven Worst Rental-Car Rip-Offs (and How to Beat Them)

Just about every segment of the travel industry is rife with rip-offs, but the folks who rent cars have risen gouging to an art form. Fortunately, there are work-arounds that will allow you to bypass most of these rip-offs.
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Just about every segment of the travel industry is rife with rip-offs, but the folks who rent cars have risen gouging to an art form. The worst rip-offs are the extras that you often need for your trip and can't obtain through alternative sources. Other bad ones include unconscionably high prices for options that you can avoid and various fees that are added onto base rates rather than included as they should be.

Fortunately, there are work-arounds that will allow you to bypass most of these rip-offs. But you have to be careful -- car-rental providers want to overcharge you whenever they can. Here are seven ways to beat them at their own game.

Overpriced Insurance

Is rental-car collision insurance overpriced? Yes. Here's how much: A car-rental company once informed travel agents that it could offer clients an unbeatable rate -- $0 per day -- provided only that the clients bought insurance.

Even though rental companies sometimes call their policies "insurance," technically, they're not. The policy is really a waiver of the company's right to collect damages from you if you damage the rental. By whatever name, however, the price is outrageously high, at up to $30 per day in many cases. You know it's overpriced when you can buy equivalent coverage from third-party sources -- proprietors that make a profit -- for less than $10 per day or get it free through your credit card.

Work-Around: Your regular auto insurance may cover you in a rented car, at least within the U.S., although many such policies do not pay for the full list of charges that rental companies add to a collision bill. You're better off using the free coverage automatically provided on rentals charged to most AmEx, Diners Club, Discover, and Visa credit (not debit) cards, and many MasterCards. Except for Diners Club, however, most credit-card coverage is secondary for rentals in the U.S., which means you'll first have to make your claim via your regular insurance; to avoid this situation, you can buy less expensive third-party collision coverage from the big online travel agencies (OTAs) such as Expedia and Priceline or independent sellers such as Protect Your Bubble, or you can convert your AmEx coverage to primary for about $25 per rental.

Fueling Gouges

Most rental companies give you three options for fuel: (1) Buy a full tank when you rent the car, (2) have the rental company refuel it when you return it, or (3) return it with a full tank. The first two options are complete rip-offs.

When you buy the full tank, the price may be close to the going rates locally, but that's not the gouge. The gouge is that you get no credit for whatever fuel remains in the tank when you return the car. Instead, you donate it to the rental company. So unless Avis, Hertz, or Enterprise is your favorite charity, this option is a nonstarter.

When a rental company fills the car, it typically charges two to three times the local price per gallon (or liter). Last month, a reader reported being asked to pay €368 (about $500) to fill a tank that was at the three-quarters mark when returned. The reader assumed this was some sort of misprint, but the agent wouldn't budge. (The reader got back in the car and drove to a gas station for a fill.)

Work-Around: The obvious work-around is to take the third option and fill up the tank just before you return the car. This means checking out available filling stations near the airport when you first rent your car so you'll know where to get a refill. Be sure to get a receipt to prove that you filled the tank.

Extra-Driver Charges

Having your spouse or traveling companion take the wheel during a long drive seems like simple good sense, and it's often a virtual necessity. As long as all drivers are qualified, swapping the driving duties doesn't add even a fraction of a penny to the rental company's cost or risk. But that doesn't stop those companies from hitting you with an extra-driver charge of up to $13 per day, per driver, sometimes with a minimum charge of more than $90 per driver.

Work-Around: California prohibits extra-driver charges, and New York caps them at $3 per day. In other states, Alamo, Avis, Budget, Enterprise, Hertz, and National waive the fee for a spouse/partner on rentals by members of their frequent-renter programs; some also waive the fee for business associates. Just join the rental company's program before you pick up the car; there's no fee to enroll.

Geographic-Limit Mileage Charges

Some rental companies -- chiefly smaller, low-priced outfits -- set geographic limits on how far from the rental station customers may drive the car. For example, renters have reported cases wherein a San Diego rental company limited driving to Southern California, and there have been reports of limits to a state or a group of smaller states. Typically, if you violate the limits, the rental companies add a stiff extra charge and may also convert the entire rental to a mileage rate. And companies can detect violations: Many cars these days have GPS units that rental companies use to track cars, whether or not you use them for navigation.

Work-Around: Fortunately, the big national companies seem to have abandoned this practice. For the most part, they even allow you to drive into Canada, provided that you notify the company. Just make sure you check for limits before you accept the deal.

Airport and Train-Station Extras

Rental-car companies are fond of posting artificially low base prices, then adding a laundry list of various fees and charges that can often come close to doubling your actual cost. Among them: concession recovery fees, licensing fees, premise-occupancy fees, airport-transportation fees; the list keeps going. They're all really a part of the cost of doing business, and they should be included in the base rate. European renters often tack on some really stiff fees for rentals at "prime stations," meaning airports and rail terminals.

Fortunately for consumers, rental companies and OTAs typically display all-up inclusive rates as well as the phony lowball base rates, so you know when you first book what your real cost will be.

Work-Around: You can sometimes cut your cost substantially by renting from a downtown or suburban location. However, you may have to trade the convenience and possible additional costs of getting to and from the rental location.

Excessive One-Way Charges

There was a time when you could rent a car in Los Angeles, drive around California for two weeks, and return it in San Francisco for the same rate as a round-trip Los Angeles return. This is no longer the case. Hertz, for example, will rent you a Toyota Corolla in Los Angeles for $553 for two weeks if you return it to Los Angeles, but you'll pay $1,714 to return it to San Francisco (quotes are for a rental from October 21 through November 4). And one-way car rentals that begin in one European nation and end in another are virtually impossible with some country combinations.

Work-Around: One obvious work-around is to avoid one-way rentals. Arrange your driving itinerary in a circle so you can return the car where you rented it. But when that doesn't work for the trip you want, you have some other alternatives:

  • Compare prices of major rental companies. Some may have lower one-way rates than others.

  • Call the rental agency's local office in your pickup city and check if they have a car on the lot that they want to return to the rental office in your destination. If they do, sometimes they'll waive the one-way fee.
  • You can sometimes combine one or more one-way and local rentals. Use local rentals for regional touring and short one-day one-way rentals when you want to move your base of operations. Or you can combine several local rentals with rail or air trips between regional bases.
  • High Local Rates in Europe

    Decades ago, before the Internet, one of the standard tips for travelers visiting Europe went this way: If you find you need to rent a car after you arrive in Europe, don't pay the high local rates. Instead, call the rental-car company's U.S. office and rent at the much lower rate quoted to U.S. travelers. To my surprise, I found last month that this recommendation is still valid. When I had to change my rental in Munich, local agents quoted absurdly high rates. So I went online to a U.S. website and booked a car for about half the local quote.

    Work-Around: The obvious: If you unexpectedly decide to rent a car in Europe, use your laptop, notebook, tablet, or smartphone to book your rental through a U.S. website. Just make sure you reach a U.S. website; often, when you go online overseas, the default site that appears is the local version of a company's website. If access to a U.S. site seems blocked, try a Canadian site.

    --Ed Perkins

    Read the original story: Seven Worst Rental-Car Rip-Offs (and How to Beat Them) by Ed Perkins, who is a regular contributor to SmarterTravel.

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