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Rental car companies are experts at running the meter. On top of the daily rate, you've got taxes, fees and surcharges you didn't even know about. They raise their head at the counter and pounce when you bring the car back. Here are the top five ways rental cars are ripping you off and how to protect yourself.
1. Pre-Paid Gas
Pre-paying for gas in your rental car is a scam. Rental companies typically offer two options on gas.
- You pre-pay for a full tank of gas and the rental company refills the tank for you. This is usually presented as a fairly normal per-gallon rate but—here's the kicker—it's for an entire tank. If you don't use the entire tank or you're not able perfectly time your trip so that you return the car with an empty tank, you are overpaying. In addition, high rental-car taxes get added on, which might add 30 percent to the cost.
- You decline pre-paid gas and refill the tank when you return the car. Use GasBuddy to find the cheapest station closest to the rental car location before returning the car. (Get a receipt in case the rental car company tries to charge you later.) The giant caveat with this option is that if you forget to refill the tank, they will charge you a huge per-gallon fee. Rental companies often charge up to three times the local price for every gallon needed to fill the returned rental. It's imperative that you don't forget to refill the tank. Set a reminder on your phone, put a sign on your dashboard, whatever it takes.
2. Phantom Damage Charges
Rental car companies keep careful track of any damages to their fleet, but sometimes hard-to-see damages don't get reported immediately. If you sign an agreement upon pickup saying that that the car didn't have damage, you can be held responsible if the damage is discovered later when you return the car. There are countless horror stories of renters who get saddled with huge damage bills and claims on their primary insurance with little recourse.
To avoid this, take the time to carefully inspect the vehicle before you sign the paperwork. Even if there isn't paperwork to sign, it's your job to inspect the car and alert the agent to any damage. We suggest taking 360-degree photos of the car or using a free app like Record360 to document the condition of the car when you pick it up. Don't forget to bend down and get anything that might not be at eye level. Repeat this process when you return the car so that you have a record that no damage occurred on your watch. Save your images or video for a few months after the rental to make sure you're in the clear.
3. Car Rental Insurance
Rental car companies make millions of dollars each year off their customers' anxiety and uncertainty at the counter. If you purchase all the various insurance options from the rental car company, it can add up to a daily charge of up to $50 per day.
Know before you go:
- Your personal car insurance is likely to cover rental cars. Check with your primary auto insurance provider to see what your current policy covers. You are likely to be already covered for collision damage up to the value of your own car.
- Your credit card is likely to provide rental car insurance. Be sure to read the fine print on your credit card policy. Sometimes the collision coverage is inadequate (up to $25,000) and in all cases, it only covers the car. This means that if you injure yourself or someone else, or if you damage any property, you won't be covered. Your credit card does not provide liability coverage and it may only provide secondary insurance, meaning you'd have to file a claim with your auto insurance provider first.
- A cheaper alternative is available. If you don't have primary car insurance or a credit card that provides adequate coverage, you may decide that you want to buy rental car insurance. Sure is a third-party insurance provider that charges less than what you will pay at the rental car counter. Still, remember that this coverage is only for the car you are driving. You may still want to consider buying liability coverage from the rental car company.
4. Extra Fees for Unnecessary Amenities
Rental companies love add-ons. These fees rake in extra revenue that is practically all margin. Two major add-on culprits? GPS devices and toll transponders.
Remember GPS devices—those clunky contraptions that sat on the car dashboard until they skidded off into your lap during a speedy turn? Rental car companies still rent GPS systems to customers who still haven't figured out that smartphone apps will let them navigate for free.
Car rental companies will offer toll transponders for electronic toll billing programs such as E-ZPass or FasTrak—at a healthy mark-up for themselves. The good news is that you can easily avoid paying rental car toll surcharges with a little bit of advance planning. If you've got a transponder that is valid where you'll be driving, you can pack it and use it on your trip.
5. Frequent Price Changes
You've booked a car and you've locked in a $25-off coupon. You're all set, right? Think again. Rental car companies typically use dynamic pricing, meaning that rates are constantly changing. Ask AutoSlash for a quote and we'll automatically search for and apply all publicly available coupon codes plus any other available discounts based on memberships you hold in programs such as Costco or AAA.
After you have a reservation, ask AutoSlash to track your rate and we will watch your rental until the day you pick it up. You'll receive an email if we spot a better price so you can lock it in. Rest easy, because AutoSlash will always make sure you get the best rate.