How to avoid rental car rip-offs

Top tips to help you avoid expensive car hire hazards.

Booking a rental car for your next holiday? It’s a simple and convenient way to get around, but be warned: there are some expensive traps and pitfalls every traveller needs to be aware of when renting a car. Let’s take a look at some of the most common rental car rip-offs and how you can avoid them.

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Don't trust your car hire company

When you turn up at the rental agency counter to pick up a hire car, you’ll be encouraged (or sometimes pressured) to buy a car rental excess insurance policy. This is an insurance policy designed to reduce or eliminate the excess you’ll need to pay if you have an accident in the hire car. Without this type of insurance cover, if the car is damaged while in your possession you could be liable to pay an excess of several thousand dollars.

That’s a lot of money in anyone’s language and can make the rental company’s hire car excess insurance seem like a sound investment. In most cases, however, it’s a rip-off.

Why? Car rental excess insurance bought directly from the rental company is generally quite expensive. Depending on how long you’re renting the vehicle for, the daily insurance premiums could add a few hundred dollars to the total hire cost. You should also make sure you’re aware of any exclusions and restrictions that apply to this type of cover, not to mention the fact that many policies will only reduce your excess payable, not eliminate it altogether.

How to avoid the rental car insurance rip-off

The good news is that there’s an easy way to protect yourself against the hire company’s insurance excess without having to buy the excess reduction cover they try to sell you. In fact, you have two options to choose from:

  • Buy standalone car rental excess insurance. These policies are designed specifically for rental cars and are also much cheaper than the policy the hire company will try to sell you.
  • Buy travel insurance. Many comprehensive travel insurance policies, either for domestic or international travel, include car rental excess insurance as a standard benefit. Not only does this provide protection against the rental company’s excess charges if your rental car is damaged or involved in an accident, but you can also enjoy the peace of mind provided by the many other benefits included in your travel insurance policy. Best of all, it’s cheaper than the cover you can buy from rental companies.

Whichever of these two options you choose, make sure to shop around and compare your options before you buy. Check what’s covered, what’s not included and any limits that may apply so that you find the policy that provides the best bang for your buck.

Other costly car hire hazards

The insurance excess isn’t the only car rental rip-off that can leave you significantly out of pocket. Check out these other costly rip-offs and what you need to do to avoid them.

Unwanted upgrades

Turning up to the rental counter to be told you’ve been given an upgrade on the vehicle you ordered sounds like a good thing – and it often is – but it can also come at an extra cost.

Before you accept an upgrade you didn’t ask for, double-check to make sure it’s free. If it is and the vehicle on offer meets all your requirements, great. If there’s an extra charge you’ll need to pay, don’t sign the contract unless you’re happy to pay a little more.

Fuel for thought

If you’ve ever returned a rental car without a full tank of fuel, you will most likely have been stung by the hire company’s exorbitant refuelling charge. You can save yourself a lot of money by simply filling up with petrol just before you take the car back to the depot. While this might seem like an inconvenience when you’ve got a plane to catch, it’s worth it.

Some rental contracts allow you to return the car without a full tank of fuel. However, you’ll still need to pay an additional fee upfront when you hire the car, so the most cost-effective option is simply to return the car after topping up the tank.

Dodgy damage

You’ve finally touched down after a long flight and you’re eager to start your holiday as soon as possible, but make sure you remember to do one thing before driving away in your rental car: check it closely for any pre-existing damage.

Take your time to inspect the vehicle closely for any scratches, dents or other damage. If it’s not noted on the vehicle’s condition report, speak to the rental agency to make sure it’s included. Don’t forget to check the interior as well as the outside of the car, and it’s also a good idea to take photos of any damage on your phone.

Why do you need to bother? This is an easy way to ensure that the rental company doesn’t try to charge your credit card for vehicle damage that you didn’t cause. With this in mind, when you return the car at the end of your holiday, take a few photos to show that it’s in the same condition it was in when you picked it up.

Costly extras

If you’re thinking of adding anything extra to your car rental contract, be warned: it’ll pretty much always cost extra. Need a couple of child seats for the kids? You’ll need to pay a daily fee for each seat. Want a GPS to help you get around? That’ll cost extra, too. Even adding an additional driver to the rental contract will drive up the total cost, so make sure you’re aware of exactly how much any extras cost before you buy.

Of course, there are also plenty of simple ways to avoid these costly additional charges. For example, find out whether it’s cheaper to bring your own car seat with you, test out the GPS map functionality on your phone, and only add extra drivers when it’s absolutely necessary.

1. Don’t pick up from the airport

Picking up a rental car from the airport is usually the easiest and most convenient option. Unfortunately, it can also be an expensive one.

Most rental companies impose what’s known as a “premium location surcharge” on airport pick-ups, and this can significantly increase the cost of car rental. Picking up your car from a nearby city depot, though slightly annoying and inconvenient, can provide big savings.

2. Watch out for one-way fees

If possible, try to drop off your rental car at the same place you pick it up. If you arrange to leave your car at a different depot from the one where you collected it, you’ll be slugged with a one-way fee or a relocation surcharge.

3. Last-minute bookings are not your friend

If you’re thinking of leaving your rental booking until the last minute, think again. There’s a common misconception that you’ll be able to get a great deal just by turning up at a rental counter after your flight lands and seeing what’s available, but this is a mistake.

If you don’t have a booking but you need a car, rental agencies have you right where they want you. Not only does this mean you might have to settle for a higher price, but it also means there might only be a limited range of vehicles available. In busy holiday periods, you could miss out on a car altogether.

So instead of treating car hire as an afterthought, start shopping around for a good deal well in advance of your trip. It’s quick and easy to compare rental quotes online, allowing you to find the best value for money. Planning ahead will also avoid the stress of sorting out a vehicle once you arrive at your destination.

Picture: Shutterstock


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Tim Falk

A freelance writer with a passion for the written word, Tim loves helping Australians find the right home loans and savings accounts. When he's not chained to a computer, Tim can usually be found exploring the great outdoors.

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