Car rentals: Here’s everything you need to know to protect yourself

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Stephanie Patterson

Regular readers of Consumer Rescue know that our advocacy team tackles many fiascos involving car rentals. From surprise damage charges to accusations of grand theft auto, we’ve seen it all. A significant proportion of these problems could have been avoided had the traveler taken a few precautionary steps – before driving away with the vehicle.  

In an effort to make sure you don’t end up in our case files, here’s everything you need to know about renting a car.

How to book a rental car

Booking a rental car is easy, but finding the best rate is not. Each rental company classifies the size or type of vehicle differently, which adds to the confusion. Depending on the car rental company, the same model could be classified as standard, intermediate, or mid-size. 

Rental rates vary substantially, even when comparing the same class of cars. Rental rates from the same company (like Hertz, Avis, Alamo, Thrifty, etc.) can vary between what’s available on the company’s website and what you can find (either higher or lower) through a third-party booking agent. 

There really isn’t any magic formula on where or when to shop for the best rate. Influenced by supply and demand, these rates fluctuate daily — sometimes hourly.

You can cancel your rental car reservation in many instances, but there are exceptions. Many third-party agents sell discounted rentals, and these are often nonrefundable. Keep in mind if you book a refundable rental car, you can monitor the rates periodically to see if you can find a better deal. If you do, you can cancel your first reservation and rebook a new one. But if you’ve booked a nonrefundable rate, that will not be possible.

Read the terms and conditions before booking a rental car

Never book a rental car until you’ve read through all the terms and conditions of the booking. This is where you’ll find out what the cancellation terms are and where you can drive (or not drive) the car. Sometimes there are restrictions (even in the United States), and the cars contain GPS microchips to track where the vehicle has been. 

Some of the details to check are:

  • Classification of the car (compact, medium or large sedan, SUV, specialty car, etc.)
  • Length of your rental 
  • Rental location (airport or in town)
  • Extra options
  • Waiver or insurance coverage
  • Additional drivers or underage driver charge 

The longer you rent a car, the lower the rate. The description of the rental car will vary from one site to another. For an accurate comparison, use the vehicle’s description as your guide. The exact make and model may be considered a midsize car with one rental company and a large sedan with another.

There are pros and cons to booking direct or from a third-party booking agent.

Booking directly with the rental car company

Rental car companies include Hertz, Alamo, Thrifty, Enterprise, Budget, and more.

Pros

  • Discounts, upgrades, and added perks for members
  • Earn points toward future rentals
  • Available at all major airports 24/7 or with extended hours
  • Trusted name
  • Frequently offer upgrades for a lower rate while making a reservation 
  • Eliminating the middleman makes changes or cancellations a more straightforward process

Cons

  • Cannot easily compare rates with other rental car companies
  • May not offer discounted or promotional rates if you aren’t a member of their rewards program

Third-party booking agents

Third-party booking agents offer a comparison of rental rates with several different rental companies and independent agencies at one time. Some sites include  AutoRentals, RentalCars, Cheapcarrentals, Expedia, Kayak, Booking.com, Priceline, and more. 

AutoSlash provides a list of available membership program discounts so you can easily apply your membership savings when booking. After you fill in your rental dates and preferred vehicle size, it will email you the comparison results. It will also notify you if a lower rate becomes available and gives you the option to cancel your previous reservation.

To search quickly, narrow down your options: Choose the size or type of car you prefer, the rental companies you want to compare, the opportunity to cancel, and the location.

After you’ve narrowed down your selection, go to the rental company’s website to see if you can score the same or better deal. If so, book directly with the rental car company and eliminate the middleman. 

Pros

  • Ease of comparing rental rates with several rental car companies.
  • Offers discounted rates or combined package deals.
  • Ability to compare airport location rates to those in town.

Cons

  • Discounted rentals are often nonrefundable if you prepaid. Reservations may not allow for cancellations or changes.
  • Independent rental agencies listed may rent old cars or have a poor reputation.
  • It is always more challenging to resolve issues through a middleman.
  • You may not know the exact make or model of the car you will be renting.
  • If you need to change your reservation, the rental car company will require you to contact the third-party booking agent.
  • In most cases, you will not be able to apply any car rental membership discounts.

Cancellations and prepayments

As mentioned, you may not be able to cancel a third-party booking. Many of these are prepaid bookings and don’t include additional fees that you’ll owe at the counter — like airport taxes or additional insurance. With Priceline and Hotwire, you are offered what seems to be a good deal, but you don’t know the name of the rental company until you pay for the reservation. Once you pay, you’re locked into the deal and no changes can be made.

It is rarely in your best interest to prepay for your car rental unless the discount is substantial and you are aware of all the added fees. The discount is off the published rate, and you will not be able to add an additional discount code. If cancellations are allowed, you may be charged a cancellation fee.

Reservations made directly with the rental company can usually be canceled or changed without a problem. Some reservations will not allow cancellations within 48 hours of the pick-up date. 

Rental Car Alternatives

Carsharing is an alternative to renting from an agency. With Turo, you rent a car directly from the owner using the Turo website. The owner sets up the rental rate and the pick-up location. Typically, insurance is included with the rental. 

With Zipcar, you pay monthly/annual membership dues — about $9/month or $90/year.  The rental rate is $9.50/hour or $79/day on average. When you schedule a rental, you’ll receive a Zipcard that marks the start and end date of the rental. Zipcar covers gas, insurance, and maintenance,180 free miles per day, and free parking in certain areas. Zipcar has locations all over the world, including several close to college campuses.

Simplifying car rental rates and contract conditions

Review the rental car contract

Read the contract — it is legally binding. If you prepay your rental car online, review the agreement available.

Don’t feel pressured to sign the contract when at the counter quickly. Review the checked (or not checked)  boxes to ensure you are receiving what you requested. Find out what you’re responsible for and ensure the charges are correct. Ask about any fees that were not in the initial reservation. 

Rental agencies make the bulk of their money on add-ons. Consequently, the salesperson may try to strong-arm you into buying insurance, waivers, upgrades, or extras at the counter. They’ll be glad to share worst-case scenarios when customers did not purchase their insurance.

According to Kelly Blue Book, the average cost of a new car is $48,000. You are responsible for all damage to a rental car. The monetary liability when renting a vehicle can be substantial without proper insurance coverage.

Suppose hail damages your rental car while in your possession. Guess what? You’re responsible for the damage. If it breaks down and needs towing, you’ll be on the hook for the charges if you didn’t buy roadside assistance or have a service like AAA or AARP membership.  If the car has a flat tire — you could end up buying a replacement tire. 

Payment methods for rental cars

The car rental company may require a credit card to be on file when you pay with a debit card.

If you have a credit card that provides car rentals insurance, it will only apply if you use that card to pay for the rental.

Consumer Alert: The base rental rate is not what you will pay

The base rental rate is the bait the company uses to lure you into renting the car. The actual cost of the rental car will be substantially higher. The rental rate is a starting point, and you’ll need to compare the cost of add-ons you may want, fees, the hourly rate, and services offered.

Each rental company offers different perks. It pays to shop around to find the best price for your needs. 

Here’s an example.

On the Alamo website, the base rate for a weekly rental of a full-size sedan (Chevy Malibu) at Miami, Florida’s airport in December was $409. The fees and taxes added $198, nearly a 49% increase. The added cost for a pick-up at 12:00 noon and a drop-off at 3:30 p.m. a week later was $47 (based on $11.75 per hour) for four hours. 

The extras included: Collision damage waiver, roadside assistance, a navigation device, a child safety seat, and the fuel service option. These brought the total weekly rental to $1,180 — more than double the base rate.

What are the added fees on car rentals?

  • State and local taxes
  • Airport concession fee and facility charge (renting a facility at the airport)
  • Vehicle licensing fee (VLF) recovery
  • Energy recovery fee and tire disposal

Rental car companies transfer the facility fee they pay for floor space at the airport to the customer. This charge can range from $5 to $10 or more per day. Rental agencies that are located off-airport or in town may offer a lower rental rate. However, you’ll need to consider the added inconvenience. You’ll have to pay for a taxi if a shuttle service is not available. These agencies generally have more restricted business hours compared to those at the airport.

Renting a car with a pet

Find out what the rental agency requires for pets. You may have to keep the pet in a carrier or risk the car rental agency hitting you with hefty cleaning charges. Know what to expect in advance.

Mileage charge

Most rental cars include unlimited miles. Confirm that with the rental company. There may be exceptions. Larger or specialty vehicles, cargo vans, or large passenger vans may incur mileage charges.

Underage driving fee if under 25

If a car rental company allows renters under the age of 25, it will typically assess an underage surcharge. This fee averages around $20 to $35 per day.

Some states will not allow a driver under 21 to rent a car. In Michigan and New York, the minimum age to rent is 18.

Drivers can waive this fee if they are a member of AAA, USAA, or have a discount code from their university.

Additional drivers 

Find out if the rental car company allows spouses or partners at the same address to drive the car for free. Many do. For all other drivers, there is a daily rental fee per driver. There are age restrictions. All drivers must be present and have their license with them if checking in at the counter. If you intend to “skip the counter,” you must add the additional drivers (along with their driver’s license number) during the reservation process.

Extra options that will increase your daily rental rate 

  • Navigational system/GPS
  • Sirius XM
  • Roadside assistance

Roadside assistance covers unlocking doors if you have locked the keys inside, lost the keys, fuel delivery, flat tires, and possibly towing if the vehicle is inoperable because of a mechanical issue. It usually does not cover towing if the vehicle is in an accident. Without this add-on, all roadside assistance will be at your expense. 

If you have roadside assistance through another source like AAA or AARP membership, that same service will apply to a rental car. If your emergency road service is through your insurance company, chances are it will not cover you in a rental. 

  • CO2 offset – environmental service
  • Winter tires in some states
  • Ski racks in some areas
  • E-tolls

Administrative fees for transponder use

Ask if the rental company charges administrative fees on top of the tolls. Some rental companies charge a daily fee whether you use the tolls or not, while others may charge an administrative fee plus the toll amount only on the days you go through a toll. A couple of rental companies charge a flat daily fee that includes the cost of tolls. 

For example, Hertz charges $5.95 per day plus tolls for every day you use a toll, while Alama, Enterprise, and National charge $3.95 per day plus tolls to a maximum of $19.75 per rental. Avis and Budget charge $5.95 per day plus tolls for every day you use a toll to a maximum of $29.75 per rental.

Dollar and Thrifty charge a flat fee of $10.49 per day, whether you use a toll or not, and it includes all tolls. If you do not have the toll option and go through a toll (unless you pay cash), you’ll be charged $15 in administrative fees plus tolls for every toll you go through.

Ask how tolls will be billed. The tolls will not be included in the rental rate. Rental agencies have sent customers bills for toll charges almost two months after they returned the rental. 

Find out if your transponder from home is valid in the area of travel. When you pick up your rental, you can add the license plate number to your online account with a start and end date. Bring your transponder with you and put it in the rental. Remember to remove it when you drop the car off.

If you bring your transponder or choose to pay cash at tolls (note that some toll roads don’t offer a cash option), inform the rental agency when picking up your rental and ensure the rental company’s transponder shield box is in the closed position.

Children or infant seats

This charge can add up if you need more than one seat. For example, Hertz charges a daily fee of $13.99 per seat, and Alamo charges $9.99 per seat. For a weekly rental with Hertz, you’ll pay $97.93 vs. $69.93 with Alamo.

Fuel purchase option – you are usually given three options

  1. You can prepay for a full gas tank at a discounted rate per gallon. There are no refunds. Gas prices fluctuate, so the rate listed when you reserve the rental may differ from what you will end up paying. Some rental agencies will charge you for the largest tank size in that classification. In other words, you will be paying more for a full gas tank than if you filled it yourself. If you choose this option, return the rental empty.
  2. You fill the tank right before you drop it off. Fill it to the same level as when you picked it up, as stated in the contract. This is usually the least expensive option. Keep the receipt in case the rental agency requests it.
  3. The rental agency fills the tank when you return it. The price per gallon will be higher, and there is an added surcharge.

When your reserved drop-off time is later than the pick-up time

When your drop-off is later than the pick-up time on your reservation, there will be an added charge to the rental rate. Depending on the rental company, you will either be charged an hourly rate or a full daily rental.

For example, when reserving your car, your pick-up time is 12:00 noon and your drop-off is 3:30 p.m. a week later. You will be charged for the extra 3-½ hours (rounded up to 4 hours.) Remember that hourly rates vary based on the type of car you rent. You’ll pay more per hour for larger vehicles, SUVs, or specialty cars. Other factors may affect the hourly rate as well. You may be charged a percentage for taxes, fees, and extras.

To give you an idea of the difference in rates, Hertz charged $42.38/hour for an SUV and $27.50/hour for a large sedan. For the same vehicles, Alamo charged $16.64 for the SUV and $12.40 for the large sedan. On the other hand, Expedia charged a full daily rate for the added hours for both the SUV and the sedan.

When your reserved drop-off time needs to be later than the pick-up time, you can save substantially by shopping around and comparing hourly (or daily) rates.

Discounts on car rentals

You can save money on car rentals through memberships that offer discounts. You usually have to book directly from the car rental company or the company offering a discount to receive these savings. Be aware that you may not be able to apply these discounts when renting from a third-party booking agent unless specified.

  •  AARP members can save a percentage off the base rate and discounts on extras for car rentals through Expedia or Avis (up to 30%), Budget (up to 35%), or Payless Car Rental (5%.)
  • Members of AAA can save a percentage off the base rate along with possible savings on extras and fuel with Hertz (up to 20%), Dollar Rent A Car (10%), and Thrifty (8%.)
  • Costco members can access members-only benefits from Budget, Enterprise, Alamo, and Avis.
  • USAA members who are active in the military or veterans, including their spouses and children, can receive up to 25% off the base rate and waive some fees.
  • Military personnel or veterans may qualify for discounts even if they are not a member of USAA. 
  • Some credit cards offer discounts on rental cars. 
  • Several airlines have partnerships with rental companies that offer discounts for frequent flyer members. Elite members could be eligible for additional benefits.
  • You may also qualify for a discount code from the university you attended. You’ll have to log into the university’s website with your email address and password to receive the discount. Many universities offer special codes for their student, which will allow the car rental agency to waive the daily fee for the underage surcharge.
  • Companies may offer corporate discounts that their employees can use for personal travel.
  • Travel agents may be able to offer you a discount not found online.
  • You can earn rewards with the car rental company’s loyalty program 

How to Protect Yourself from Financial Losses while renting a car

Accidents happen. It is imperative to have adequate insurance coverage to reduce your liability and out-of-pocket expenses. 

Do you need to buy insurance from the rental car company?

The answer is not as clear-cut as you might think. It’s essential to have insurance coverage, but there’s no need to spend more than necessary.  Most auto policies cover rentals in the United States. There is one caveat – whatever coverage you have on your vehicle will be the coverage you’ll receive on a rental. If you don’t have collision or comprehensive, your insurance will not cover your rental car.

Coverage you will need on your auto policy to cover a rental car

  • Collision and comprehensive will cover theft and damage to the rental car. 
  • Property liability coverage will cover damages if you hit another vehicle and are at fault.
  • Bodily injury liability covers medical costs to the other party, and medical coverage or health insurance covers injuries to you and your passengers.
  • Homeowners, renters, or condo insurance will cover stolen items from the vehicle.

When traveling for business, you generally do not have to purchase rental car insurance because the company usually has the necessary coverage. Confirm that to be sure.

When to consider buying insurance from the rental company

  • If you have high deductibles on your auto policy. If you get a dent or scrape on the rental car, you may end up paying for the repairs out of your pocket.
  • If your property liability is at the state’s minimum, you may not have enough coverage if you are at fault in an accident.
  • You may want to avoid filing a claim on your policy which could increase your rates.
  • If you don’t have comprehensive and collision coverage on your auto policy, add the collision damage waiver (also called loss damage waiver) to your rental.
  • If you rent a vehicle that is substantially more expensive than your vehicle at home, you may not have enough coverage. Consider adding the collision damage waiver.
  • Many auto policies cover rentals in the U.S. and Canada only. Buying insurance from a car rental company may be essential in a foreign country. 

The rental company may place a hold on your credit card for the estimated amount of repairs which would tie up your available credit.

You are liable for any damage to the rental car. Without proper coverage, you could pay thousands of dollars in repairs. If you total the vehicle, the full replacement cost is your responsibility. 

When a rental car is damaged, the rental company usually charges administrative and loss of income fees while the car is out of commission. Loss of use (or income) equals an average daily rental rate. Find out if your auto policy or credit card will cover these fees.

Credit card benefits that cover rental cars

The rental car coverage offered by most credit cards is limited. You will still need adequate coverage on your auto policy or purchase coverage from the rental company. 

  • Coverage is usually secondary to your auto insurance in the U.S.: Many credit cards that offer car rental insurance are secondary in the U.S. Secondary coverage kicks in after your auto policy makes payments. They typically cover your deductible or other gaps in your policy. You will need to turn down the collision coverage with the rental company.
  • Credit card benefits cover the rental car only: It’s important to note that credit cards cover theft or damage to the rental car only. Liability and medical expenses are not covered. Some vehicles, like motorcycles or specialty cars, are not covered under credit card benefits. There are exclusions with some foreign countries if you’re traveling abroad. There is also a limit on the number of consecutive days of renting a car (such as a 15-day limit.
  • You must use the credit card to pay for the rental car: Pay for the rental car with the credit card that offers the best benefits and decline the collision damage waiver with the rental agency. The credit card may cover loss of use or administrative expenses if the rental car is out of commission while being repaired. Some countries (like Italy) do not allow you to decline the collision damage or theft waiver. In that case, credit card coverage becomes secondary.
  • Credit cards with primary coverage: A handful of credit cards offer primary coverage in the U.S. They cover theft or damage to the rental vehicle without having to submit the initial claim to your auto policy. Since most auto policies do not cover rental cars internationally, secondary credit cards become primary when traveling abroad. As mentioned, some countries require you to purchase waivers or insurance from the rental company.

Purchasing insurance/waiver from the car rental company 

List all drivers on the contract if you buy any type of coverage from the rental agency. If an unauthorized driver damages the vehicle, it could negate the contract, and the agency will provide no coverage.

Collision damage waiver (CDW) or loss damage waiver (LDW)

Collision damage waiver, also called loss damage waiver, is not insurance but a waiver of liability. You and the car rental agency agree that you are not responsible if the car is damaged or stolen. 

There are restrictions. If damage occurs because of negligent driving, driving under the influence of alcohol, traveling on unpaved roads, or any other reasons for exclusion, then the waiver is void. It usually includes the loss of use charge that some rental companies tack on if a vehicle is damaged.

Note: The waiver often does not cover certain parts of the car, such as the windshield, glass, or tires. You’ll be responsible for the repairs or replacement if these get damaged.

The CDW may have a deductible. Find out what the amount is.

Again, if you currently have collision, comprehensive, and liability insurance on your auto policy or your credit card offers a collision damage waiver, there is no need to purchase insurance through the rental agency. 

Note: Your domestic car insurance will not cover you internationally.

The exception would be if you want to eliminate any hassles if the rental car gets   damaged by purchasing the collision damage waiver. For example, if someone scrapes the vehicle in a parking lot, you can notify the rental agency, and they’ll take it from there. Otherwise, you’ll have to either pay the expenses out-of-pocket or turn them in to your insurance company and pay the deductible.

Supplemental liability protection

It covers you for damage to property, another vehicle, or injuries you caused while driving a rental car.

Personal accident insurance

It covers medical costs and death benefits for you and your passengers in the event of an accident.

Personal effects coverage

It covers stolen property in the vehicle up to a specified limit.

Optional insurance through standalone policies 

If you prefer to buy a separate insurance policy from a company that covers rental cars specifically, options are available. These policies are called standalone insurance policies. 

Companies such as Allianz Travel, Rental Cover, or Bonzah sell primary coverage for collision, loss, and liability and may cover personal effects. There are maximum payout limits and possible deductibles. You can purchase the policy in advance and pay a daily fee. 

Will travel insurance cover your rental car?

Travel insurance companies that offer rental car insurance offer collision coverage only. This coverage will pay for repair costs or replacement of the rental car if damaged. It does not offer liability coverage, so it would not cover injuries, property damage, or damage to another vehicle.

Some rental agencies do not view it as acceptable coverage.

Picking up your rental car

Confirm your reservation, including the make and model of the rental, a couple of days before your pick-up date. Bring your confirmation, driver’s license, and credit card.

If you are picking the rental up at the counter, be prepared for some pressure to buy add-ons and insurance. Plan ahead and decide if there are any extras you prefer and what the daily cost would be. Review your auto policy and determine if it is sufficient.

Additional drivers

Spouses or partners may be able to drive the rental car for free. Additional drivers will need to be present and show their licenses. There will be a daily charge per driver. If you can skip the counter, list the additional drivers and their license numbers online.

Restrictions on where you can drive the rental car

The agent may notify you of geographic restrictions where you are not to drive the rental. It may be because of poor road conditions or other hazards. Keep in mind that if you buy the rental insurance and choose to operate in restricted areas, you could nullify the insurance by breaking the contract. GPS microchips track where the car has been.

Free upgrade

If the rental company is out of the type of car you rented, they should upgrade you for free. If that option is not given, ask for it. Get it in writing that the upgrade is free. We’ve seen cases where the customer was upgraded and charged for it later.

Inspect the rental car: Take photos and videos

To reduce your liability, take photos of the car before you drive off the lot. Take photos and a video of the entire vehicle and pan out to show it is still in the rental parking lot. Include the inside and out, and don’t forget the trunk, roof, under the bumper, and upholstery. Time-stamp the photos and video. Take pictures of the license plate, vehicle identification number, fuel gauge, and odometer reading. Upload it to a cloud and keep this information for at least six months.

It may sound like a hassle, but it lessens your liability by providing proof of the car’s condition when you picked it up. If the rental company later sends you a repair bill, you’ll have the documentation you need to fight it. You’d be surprised at how often customers run into this problem.

Request a replacement if the car is damaged, has a chipped windshield, or has an unusual smell

Notify the agent of any dings or scratches or if the windshield has any chips. To reduce your liability, request a replacement car if there is one available. If the car is filthy, it’s a good idea to request another one since the dirt might be hiding scratches that you could be charged with later. You don’t want to be accused of damage you did not do. Don’t accept a car with an unusual smell. You could get charged for a rental cleaning after the fact.

If no replacement is available, have the attendant notate the damage or smell and sign that it was there before you took possession. 

Don’t leave without a receipt

Before driving away, get a receipt from the rental agent. It should include the date, time, odometer reading, and fuel level. Again, keep all paperwork for at least six months. When your return the car, don’t leave without a receipt (Or you could find yourself with a $6,000 overcharge later!).

If you are unfamiliar with the car, ask the attendant how to operate it before driving away. Check the glovebox for an owner’s manual.

Skip the counter at the airport

If you prepaid for your car rental, you can skip the counter and go directly to the parking lot or garage. You can also check in at a kiosk or online and go straight to your car. 

Before leaving the lot, request a receipt from the attendant. If they say you don’t need one or they don’t have one to give, disregard that information and request a handwritten receipt signed by the attendant. It will provide proof if the rental company charges you incorrectly.

Shuttle service

The airport may offer a 24-hour shuttle to the terminal where your car is parked. There are usually designated pick-up and drop-off locations at the airport, and they may be in different areas. Many of the rental agencies at the airport are open 24/7 or close at 11:00 p.m. or 12:00 a.m. 

Rental car agencies may stay open if they know your flight will be late by an hour or so. This is why they ask for your flight information when you make a reservation. If you don’t fill that in, they won’t know when your flight is delayed unless you inform them.

Using your personal transponder for tolls

If you brought your transponder from home, go into your account online and add the rental car license plate number and the start and end date.

Inform the rental company that you have your own transponder to avoid possible administrative fees or paying double for tolls. Check to ensure the transponder in the rental car is in the closed position to prevent any charges.

Save money on fuel

As mentioned, you could lose money if you opt for prepaid fuel. The rental agency will offer a discount per gallon, but the charge is often based on the largest gas tank in that classification. If you bring it back with gas in the tank, you won’t receive any refunds. 

You can save money on gas by using GasBuddy. You can use the app or go online to compare the price per gallon at gas stations in the area you’re traveling.

When you should not accept the rental car assigned to you

  • If it is unsafe or if anything in the car does not work.
  • If it has a strong odor.
  • The safety inspection or registration has expired. 
  • The mileage is high.
  • If it has a chipped windshield.
  • It doesn’t drive right.

What do you do if you damage your rental car?

You are responsible for any damage to the rental car. If you bought insurance or a waiver from the rental agency, the liability for the rental car itself transfers to them. The exception will be if the damage is due to reckless driving or driving under the influence. 

If you are in an accident and it is not your fault, the rental agency will work with the insurance from the party at fault to collect on the damages. At least, that’s the way it’s supposed to work. (See: A drunk driver crashed into my rental car but I got the $22,158 bill!)

If an accident occurs:

  • File a police report.
  • Call the rental car company using the emergency phone number to report the accident. If your vehicle needs towing, they’ll notify you where to tow it. But under no circumstances should you allow a tow truck to take the vehicle away to an unknown location as on Avis customer recently did. Unless you purchased roadside assistance, you would be responsible for the towing charges. You’ll have to file a report with the rental agency.
  • Notify your insurance company of the accident if you did not purchase insurance from the rental agency. 
  • If you paid for the rental car with a credit card that provides secondary car rental coverage, inform them of the incident.
  • If your credit card offers primary coverage, and the damage is to the rental car only, contact the credit card company rather than your insurance company. 
  • Take photos of the damage and ask the rental agency to send you a repair quote. 

Fees charged by the rental company when you damage their car

  • Loss of use fees. While the rental car is out of commission, they will charge you an average daily rate for the loss of use.
  • Diminution of value. The damage caused the rental car to diminish in value. They will charge a fee to cover their losses. Check with your insurance company or credit card to see if they cover these charges.

Minor damage to a rental car

For minor damage, notify the rental company.  You’re covered if you bought the collision damage waiver (or loss damage waiver).  With CDW, the rental company waives the right to charge you for the car if it gets damaged or stolen. You will be responsible for the CDW deductible if there is one.

Some rental companies (like Hertz) will allow customers to settle small claims like a chipped windshield or minor scratches at the time of the rental. If a damage estimator gets involved, the bill will increase substantially.

If this is not an option, ask the rental company to provide you with a written estimate of repair costs.

When you are falsely accused of damaging a rental car

If you return the rental and are accused of damaging it, you’ll have the proof you need if you took photos and a video of when you picked it up and dropped it off. This will prove the damage occurred after you returned the rental car. We have heard numerous complaints from customers charged with damaging the rental vehicle several months after they returned it. 

Here’s what you can do to rectify the problem:

  • Dispute the charge in writing and ask for proof and photos of where the damage occurred. Ask for the odometer reading when the damage occurred and a photo of the VIN and license plate number.
  • Be aware that it could be a possible scam by the rental agency.
  • If the charge is for a mechanical issue, that is not your responsibility
  • If the damage is to the underside and you know you did not cause it, dispute the charge.

Mistakes happen. Scams happen. The rental car agency may be trying to recoup their repair costs by sending this notice to customers who rented that car in the last several months, hoping that one of them will pay.

Again, protect yourself by taking photos of the entire car — before and after the rental. Point out any flaws to the attendant and notate them in writing.

File a complaint with the attorney general’s office

If you believe the car rental company is not upholding its policies or is breaking the contract, file a complaint with your state’s attorney general. You can find a list on the National Association of Attorney Generals

Returning your rental car

  • Drop off your car when the rental company is open: It’s in your best interest to return the rental car during office hours to avoid future hassles or extra charges. Some agencies will allow you to drop it off after hours and leave the keys in a drop box. But you are responsible for the car until it’s checked the following day. The rental agency could accuse you of damage you did not do since you wouldn’t be there to check the car’s condition with the agent. If you have to drop your rental off later in the evening or on a Sunday, go with a rental agency at the airport, where they have extended hours. 
  • Get a receipt when you return your rental car: Don’t leave the lot without a receipt. This will provide proof of the date and time you dropped the car off and the odometer reading and fuel level. If the attendant tells you that a receipt is not available, ask them to provide you with a handwritten one — otherwise, you could be accused of never returning the car at all!
  • Don’t be late when dropping off your rental car: Rental companies usually offer a grace period of 29 or 30 minutes. You’ll pay an added charge if you are late even one minute past the grace period. Depending on the contract, you may be charged an additional hour if you’re a few minutes late or a full-day rental. The rental company will tack on tax and add-ons to the late charges. To save money, don’t be late.
  • Take a return set of photos and a video of the entire rental car: Take pictures and a video of the whole car when you drop it off and zoom in on the odometer reading, vehicle identification number, and fuel gauge. If possible, have the agent inspect the vehicle with you and sign that it’s damage-free. Some car rental agencies do not allow an agent to inspect the car with you. Keep your video and photos for at least six months. There have been cases where rental car companies contacted customers months after the rental demanding that they pay for damages to the car.

Returns to non-airport locations

Non-airport locations may require the rental car to be returned during regular business hours (which may be 8:00 to 5:00 Monday – Saturday.)  As mentioned previously, renting from the airport location is in your best interest if you have to drop the rental off after hours. But if you find yourself in a situation where you need to drop it off after hours, contact the agency on what they will allow. Never just drop the car off and hide the keys inside. This opens the door to some avoidable problems.

You must drop the rental car off at the correct location

There are several rental car agencies for the same company (like Hertz, Alamo, etc.) in larger cities. You must drop your car at the address listed on the reservation. Customers that made the mistake of dropping their car off at the wrong location saw huge fines added to their charge card. 

In some airports, the pick-up and drop-off locations are at different addresses. Don’t inadvertently drop your car off at the pick-up location. 

Fill the gas tank and clean the inside and outside of the car

If you chose the option to prepay for a tank of gas, bring it back empty. You will not receive a refund for any remaining fuel.

If you didn’t choose the prepay option, fill the gas tank to the same level it was when you picked it up, as stated in the contract. If you received a full tank at pick up, return it full.  

Be aware that if the rental agency has to fill the tank, you’ll pay more per gallon, and it will tack on a surcharge.

Don’t forget to remove your transponder if you brought one from home. 

Tips for renting a car abroad

If you are considering renting a car in a foreign country, weigh the pros and cons. It will provide you with the freedom that public transportation cannot; however, road conditions, rules of the road, and driving habits are often substantially different from those in the United States.

Compare rates and make an informed decision regarding the type of vehicle and the cost. You may save money if you prepay for your rental car when you book it. Make sure you can cancel or change the reservation. You can receive a discount, save on foreign transaction fees when renting abroad, and avoid getting charged more than the quoted rental rate.

Car rental companies abroad may put a hold on your credit card in the amount of your expected bill or the vehicle’s value. When you settle your account, clarify that the hold has been removed.

What to consider before renting a car in a foreign country

  • Not all countries drive on the right side, making driving more confusing.
  • Signs and directions may be in a foreign language.
  • Current gasoline costs are substantially higher than in the U.S.
  • Most cars have manual transmissions with limited passenger space and small trunks. An automatic transmission can add about 50% more to the rental cost.
  • Many winding roads in the mountains or steep areas may be narrow and without guardrails.
  • Certain countries may require special road permits (instead of tolls) to use their divided highways. You can receive a fine if you do not have one.
  • Countries may have an age restriction for drivers renting cars (typically under 25 or over 70). They may refuse to rent you a car or will add a surcharge. Those under 21 generally are not permitted to rent a car.
  • Many countries require you to honk your horn when going around a sharp curve or flash your lights if passing.
  • Warning:  Many countries have zero tolerance for alcohol (including minimal amounts of alcohol that can be smelled on your breath) or drug usage while driving. Criminal penalties can be severe and may result in prison sentences.
  • Several countries have strict penalties for using a hand-held cell phone or similar device while driving. For example, in the United Kingdom, using a cell phone while driving could result in severe fines, and if an accident occurs, jail sentencing could occur.
  • Pedestrian warning: For those countries that do not drive on the right, oncoming traffic approaches from the opposite direction, so be aware when crossing the street. Many U.S. citizens are injured abroad when crossing the street after parking their cars.
  • If traveling with small children, bring their car seat from home or make sure the car rental company offers one.
  • Several countries require an International Driving Permit (IDP) with your driver’s license. Without this, you would not be able to rent a vehicle abroad. An IDP translates your identification into ten languages. Fines for driving without an IDP can be quite high. Apply for an International Driving Permit before you leave for your trip. They cannot be issued more than six months before your travel date.
  • Be aware that some car rental companies temporarily charge the vehicle’s value on your credit card. Your available credit will be reduced on that card.
  • If you have travel insurance that includes rental cars, this coverage does not include liability insurance or bodily injury. Most U.S. auto policies cover the U.S. and Canada only. Mexico does not accept insurance from the U.S. Find out what each country’s requirements are regarding insurance. 
  • Credit cards that offer car rental insurance do not cover every country.
  • Rent a vehicle that fits in with the locals. Criminals target more expensive cars and SUVs.

Ask the Consumer Rescue team for help

Don’t forget, if you’ve run into a roadblock with a car rental problem, we’re here to help. Our team has the experience and access to company personnel who have the authority to rectify your situation. We can often resolve even the most challenging predicaments. The Consumer Rescue Team is here 365 days a year and always free of charge.

The bottom line about car rentals

If you read through this entire article and made it to here, I applaud you! 

All kidding aside, countless travelers have suffered financial hardships when something went awry while renting a car. Typically, these problems stem from not realizing the extent of their responsibility. There is widespread confusion over all the fees companies add to those care rental rates and whether it’s necessary to purchase insurance.

According to Kelly Blue Book, the average cost of a new vehicle is about $48,000. When you sign a rental car contract and drive it off the lot, you agree to be responsible for anything that happens to it. Make sure you protect yourself.

It’s important to arm yourself with the facts before your next car rental. This guide will keep money in your pocket and reduce your liability. (Stephanie Patterson, Consumer Rescue)

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Stephanie Patterson

Stephanie is a travel columnist at Consumer Rescue. She has authored several books for corporate travelers (available on Amazon and Barnes and Noble) and also publishes an informative website with a focus on promoting smart and safe travel. When Stephanie is not here helping consumers, she's an interior designer who loves to think outside the norm!