High Costs

Ah, the good ol' days, and by that we mean last week, when the most you could be charged in the state of Illinois for collision damage waiver (CDW) on your rental car was $13.50 per day (plus taxes and fees, of course). Apparently, this was not sufficient in the eyes of the car rental industry to cover their costs, or, rather, meet their profit margin targets, because the rental industry lobbied the governor to amend the Renter's Financial Responsibility and Protection Act to remove the previous cap.

"The economics of damage waivers, especially a full loss damage waiver product, don't work at $13.50 per day," according to the American Car Rental Association (ACRA). "The rental company can't earn enough charging only $13.50 per day to cover repairs to vehicles damaged by customers with valid damage waivers."

The law previously stated, "A rental company shall not charge more than $12.50 per full or partial 24 hour rental day for a collision damage waiver prior to January 1, 2014. Beginning January 1, 2014, a rental company shall not charge more than $13.50 per full or partial 24 hour rental day for a collision damage waiver." Now with the removal of this language, the sky is the limit when it comes to how much car rental companies can charge you to basically absolve you of responsibility for damage to the rental vehicle. How much will you pay now per day? Your guess is as good as ours since all the major rental companies we checked (Hertz, Avis and Enterprise) are still quoting the $13.50 per day rate as of right now. We expect that to change soon.

While consumer unfriendly legislative changes like this are par for the course these days, I guess we should be happy that at least they left in this provision, "Notwithstanding the foregoing, a rental company may not impose or require the purchase of a damage waiver as a mandatory charge."...which essentially means that you can decline these egregious fees if you so choose. The fact is that most renters are covered by their personal auto insurance policy and/or credit cards when renting, and if they are not, there are less costly options available in many cases.

California, Nevada, and New York are now the only states to cap damage waiver prices. New York is a downright bargain at $9 per day for most vehicles. California comes in at $11 per day for smaller/older cars, and $18 per day for larger/newer/more expensive vehicles, so not too bad either. The state of Nevada Nevada caps CDW at $26.88 per day. Wait, is that a typo? Nope. Nevada is "capped", but they're not doing you any favors here, since at $26.88 per day, it's more than you'll pay in many locations that are not capped by state law. Don't worry, though, the state of Nevada adjusts it each year based on the Consumer Price Index (CPI), so in 2018, it will be higher than $26.88. Thanks for nothing, Nevada.

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