Five Ways Car Rental Agencies Lure Extra Cash Out of Unsuspecting Customers: Internet ScamBusters #264
We hope you had a truly wonderful holiday season. Now, we'd like to start off the new year with a Special Issue on car rental scams, a topic we've never covered.
Car rental companies entice customers with advertised rates as low as $13.99 per day. But when you get to the counter, somehow your contract winds up totaling hundreds of dollars. How does that happen???
Car rental price boosting tactics can increase the price of that so-called "cheap" rental with hidden fees, unnecessary add-ons and last minute hard-sell tactics that wind up taking a large bite out of your budget.
Today we'll tell you which services are scams or unnecessary, and how to find out the real price of a rental car before you make that reservation.
First, though, we recommend you check out the most popular articles from our other sites during the past week:
Four Money Saving Websites That You Just Can't Miss: Money saving websites you should visit every day.
Are You Using Password Management Software? Find out what password management software is and why you need it.
What Your Credit Card Habits Say About You: Which of these three distinct groups of credit card consumers are you in?
Make Money by Turning Your Trash Into Cash: Recycling ideas that make sense.
On to today's main topic...
Don't Let Car Rental Companies Take You for a Ride
Has this happened to you: You've booked a great deal on a rental car, only to get sticker shock once you hit the auto rental counter. You wonder: how do car rental companies manage to extract so much extra money?
Here are five ways car rental agencies stretch extra dollars out of that economy rental -- and what you should do about them:
1. Don't Buy the Gas
This is probably the best known way car rental companies boost their profits. There are several variations of this tactic, but a common one is that the rental agent offers you the option of buying a full tank of gas at a "reduced" price. Or you can fill up the tank before you bring the rental car back.
Usually, the so-called reduced price falls within pennies of the gas you can buy at a nearby station. And what happens to any unused gas you leave in the car? You guessed it -- the company gets to re-sell it at a "reduced" price to the next customer.
Unless you are habitually tardy at airports and risk missing your flight, opt to buy the gas yourself before you return the vehicle.
And be sure you understand what a "full" tank of gas means -- or you could be charged a $10 (or more) surcharge!
2. When Upgrades Cost -- Just Say No
Here's a scam one subscriber shared with us:
"My wife was persuaded to upgrade her rental because the car I had reserved for her was 'not powerful enough' for a three hour trip on major highways out in Arizona. Instead of refusing... she paid the $60 more."
When car rental companies run out of the class of vehicle you have reserved -- as often happens with economy vehicles -- they usually offer to upgrade you to a more expensive class for free.
But before they do, they may try to talk you into the upgrade -- and charge you for it.
This is a scam. Just say no and get the vehicle you came for. Or, if they don't have the vehicle you reserved, let them offer you the upgrade for free. After all, it's rare the car you rented "isn't powerful enough." ;-)
3. Don't Double Your Insurance
You're at the sales counter and they ask you: Do you want the insurance coverage? Sounds like something you might need, right?
Many times the insurance offered by agents duplicates insurance you already have. And at $30 per day, insurance is one of the biggest fees car rental agencies use to boost your bill.
There are at least four kinds of insurance a car rental company may try to sell you:
Collision Damage Waiver
Supplemental Liability Protection
Personal Accident Insurance
Personal Effects Coverage
These coverages are all optional, and in most locations, the company cannot refuse to rent a car to you if you decline them.
If you have comprehensive and collision on your own car, it likely will extend that coverage to a rental vehicle, eliminating the need for a Collision Damage Waiver.
Supplemental Liability Protection is also likely unnecessary. The car rental company already, by law, must carry the minimum liability insurance required and your own policy may provide more coverage. You may wish to get this insurance if you do not own a car.
Personal Accident Insurance and Personal Effects Coverage are usually duplicated in your home, life and health insurance policies.
Important Action: Call your own insurance companies BEFORE you rent a car to find out ahead of time if there is any reason to buy additional coverage. Also call your credit card company. Many credit cards automatically provide car rental insurance as a benefit of using their credit card to pay for the rental -- you just need to find out beforehand.
Finally, be sure that any dents or other problems are clearly marked on your contract before you drive away. You don't want to be charged for someone else's damages!
4. Taxes, Fees and Other Things Your Rental Company May Not Be Telling You
The base fee on your rental may sound great, but to get the REAL price of that rental, you need to know the state sales taxes, local taxes, airport surcharges and licensing fees. Be sure and ask for these before you make your reservation -- or you could be VERY unpleasantly surprised!
A 2005 Travelocity study found that major American airports tacked on an average of 25.8 percent to your total bill in local and state taxes. The worst offender, Houston's George Bush Intercontinental Airport, charged a price 66.1 percent higher than their car rental base price.
Likewise, the airport may charge additional fees -- such as concession recovery fees and customer facility charges -- that can ratchet up the price as much as 10 percent.
Unfortunately, these taxes and fees are hard to avoid -- but you should at least know about them in advance. You might avoid these last fees by renting your car from an off-airport location, but make sure it's worth the inconvenience and any extra transportation expense first.
5. The Fine Print
Some car rental companies charge different rates based on the length of your rental, when you arrive, etc. If your flight is delayed, this can mean your plans -- and your rates -- change.
Car rental companies used to just look the other way -- but now they are more likely to enforce these rules. And these rules are usually buried in the fine print.
So ask them about any charges if your flight is delayed or if there are any other penalty charges -- before you rent. Will there be any drop-off fees if you have to change the airport to which you return your car? What about if you need to cancel your reservation? It's important to understand the costs beforehand so you can make an informed decision.
In summary, car rental base rates sometimes are intentionally low-balled to lure customers to the counter. Don't be fooled. Get the REAL car rental price before booking a reservation, find out your insurance needs ahead of time, and don't pay extra dollars for gas or unnecessary car rental upgrades.
Time to close -- we're off to take a walk. See you next week.