Rental car damage: Blame shifts to drivers

by Center for Personal Finance editors

CHARLOTTE, N.C. (4/5/06)--The cost of renting a car keeps going up, and now--if a car is damaged by an act of nature--more car-rental companies will hit you up for that, too (Charlotte.com March 19).

The companies, no longer swallowing the cost of damage from floods or earthquakes, say that consumers are best able to judge safe driving conditions.

Collision damage or loss damage waivers typically cost an extra $6 to $15 a day, and many consumers admit they purchase the coverage because they feel pressured. Consumer advocates warn that the waivers aren't a good deal, unless you have no automobile insurance or you don't want to risk submitting a claim to your personal insurance.

Do your homework before renting a car. Make two calls--one to your own car insurance agent and one to your credit card company, and ask these questions:

Does your car insurance policy also cover rental cars? What's your deductible? If you have secondary coverage through your credit card, does your credit card company pay the deductible? What are the coverage limits? Are there restrictions, such as damage incurred while driving drunk or driving on unpaved roads? Who pays first if there's a claim for a rental car? Who's responsible for primary insurance coverage? If you're driving in another country, will your personal automobile insurance or your credit card offer coverage?

Be aware of hidden fees and surcharges that could add up to 30% to the actual price of the rental. Independent Traveler.com (March 29) warns of some common additional hidden costs:

Gasoline. Most rental agencies charge a high premium if you return a car with an empty tank. Fill up before you take the car back, and present a receipt as proof.

Drop-off charges. Try to return the car to the same location where it was picked up or you could incur an extra fee. The fee varies--ask about cost before you rent.

Taxes and airport surcharges. Generally, "off airport" locations have lower surcharges, which vary considerably between states.

Mileage. Ask if the rental car company allows for unlimited mileage in the same state. Be aware that some special rates may not include unlimited mileage, so read the fine print.

License fees. Most states don't require that renters be told of this extra charge--usually about 6% of the cost of the rental--in advance, so ask if this cost will be added to your bill.

Extras. Ask if you'll be charged extra for infant and child seat rentals, young drivers, or additional drivers. You may incur extra charges for CD players or roof racks. These extras could add anywhere from $5 to $25 a day to the total price of the rental.

For more information, read "Renting a Car Online: Avoid Surprises and Get the Best Deal" in the Home & Family Finance Resource Center autos section.