| Renting a car can be
confusing and expensive if you don't understand industry terms and how
fees are calculated. If you have a poor driving record, renting a car may be
next to impossible. The Federal Trade Commission prepared this brochure to
outline some points to consider and questions to ask when you reserve a
rental car.
Choosing a Rental Car Company
Before you reserve a car, think about the size you want or need and how much
you're willing to spend. This will help you avoid making a hasty or
expensive decision that you may regret later. At the same time, be aware
that vehicle classification systems vary. The terms "compact," "mid-size,"
and "luxury" sometimes differ among companies.
Call several rental car companies for price
estimates, or check rates through your travel agent. Ask about specials
geared to the length of time you need the vehicle. Many companies offer
weekly or weekend deals. If your plans are flexible, you may be able to save
money by renting a car when price breaks are available. But be sure to ask
about restrictions on special offers, including blackout dates when an
advertised price may not be available.
Ask if the rental car company checks the
driving records of potential customers. Many companies now check driving
records when customers arrive at the counter. Some reject customers whose
driving records don't meet company standards. Even if you have a confirmed
reservation, you may be disqualified from renting a car for moving
violations within the last few years; seat belt law violations; accidents,
regardless of fault; convictions for Driving While Intoxicated (DWI),
Driving Under the Influence (DUI), reckless driving, or leaving the scene of
an accident; or driving with an invalid, suspended or revoked license. Ask
your travel agent or the rental car company in advance whether your driving
record will be checked.
Ask if there may be charges that could
increase an advertised base rate, such as Collision Damage Waiver (CDW) fees
(in states that allow them); a deposit or refundable charge; airport
surcharges and drop-off fees; fuel charges; mileage fees; taxes;
additional-driver fees; underage-driver fees; out-of-state charges; and
equipment-rental fees (for items such as ski racks and car seats). These
charges are defined below.
Understanding the Terms and Charges
Ask about charges before you sign your rental agreement. The information may
help you save money and avoid disputes when the time comes to pay your bill.
Collision Damage Waiver (CDW), in
states that allow it, is an optional charge of $9 to $13 a day. Rental car
agents may urge you to buy this option. Although they call it "collision
damage" coverage, it's not technically collision insurance. Rather, it is a
"guarantee" that the rental company will pay for damages to your rented car.
By declining the waiver, you accept responsibility for any damages. However,
under CDW, the company will not pay for bodily injuries or damages to your
personal property. If you do not buy CDW coverage or are not covered by your
personal auto insurance policy, you could be liable for the full value of
the car. Some rental companies may hold you liable only for the first $1,000
or $2,000.
Some CDWs exclude coverage under certain
circumstances. For example, coverage may be revoked if you damage the car
when driving it in a negligent manner, on unpaved roads, or out of the state
in which you rented the vehicle. Some companies void their CDW coverage if a
driver drinks alcohol or if a non-authorized driver operates the car.
The coverage offered by rental car
companies may duplicate insurance you have through your auto and homeowner's
policies. Coverage under your medical plan would offer protection that CDW
coverage lacks. Read your insurance policies and medical plan for specifics.
If you're not sure about the coverage, call your insurers. If you're
traveling on business, your employer may have insurance that covers you.
Also, some credit card companies and motor clubs provide members with free
rental protection when you use their cards to pay for rentals.
In addition to CDW coverage, a rental car
company also may offer:
- Personal Accident Insurance (PAI). At a
daily cost of $1.50 to $4, it pays a death benefit and a portion of your
medical expenses if you're in an accident.
- Personal Effects Coverage (PEC) or
Personal Effects Protection (PEP). At an average daily cost of $1.25, it
safeguards your luggage against damage. If your homeowner's policy covers
your luggage and other belongings while you travel, you may not need this
protection.
A refundable charge may be required
when you pick up your rental car. The charge varies, but may be hundreds of
dollars. Most rental companies make the charge to your credit card but do
not process the amount unless you do not return the car as specified in your
rental contract. Until you return the car, however, your spending limit on
your credit card may be reduced by the amount of the deposit. This may be
important if you plan to charge other items to your credit card and are near
your credit limit. If you do not have a major credit card, or you do not
want to charge the deposit, companies may ask for the deposit in cash.
Airport surcharges and drop-off fees
can increase the base rental rate considerably. Surcharges apply when
airport authorities impose fees for airport use even when rental car
companies shuttle you to an off-airport site. Drop-off fees refer to charges
that some companies impose to allow you to drop off the car at a different
location from the pick-up point.
A fuel charge is the amount many
rental car companies add to your bill for gasoline. Some companies give you
a half-tank at a charge of $10 to $15 and tell you to return the car empty;
others fill the tank and charge for the amount of gas you use. Companies
that do not charge for the initial tank may ask you to return the car with a
full tank. If you don't, you'll be charged the rental company's price for
gasoline. It's often much higher than a local station.
Mileage fees usually are assessed on
a cents-per-mile basis or as a flat fee when you exceed the allotted free
mileage cap. Knowing approximately how far you will drive will allow you to
select the company that offers the most favorable mileage terms.
Taxes are levied by states and some
municipalities. You may be able to avoid the higher tax rate of an urban
pick-up site if you pick up your rental car at a suburban location.
Additional-driver fees and
underage-driver fees are costs a company assesses when you share the
driving with another person or when a driver is under a certain age (often
25).
Out-of-state charges are assessed
when you drive the car out of the state in which it was rented.
Equipment-rental fees are imposed
when you order extras such as ski racks and car seats. If these items are
important to you, make sure you reserve them in advance.
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