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Beware of hidden car rental fees

by , SmarterTravel Staff
Editor's Note: This story was originally published on August 4, 2003. To see the most recent SmarterTravel articles on related topics, please click on any of the following links: car rental, Christine Sarkis, credit card, insurance, taxes and fees.

Have you ever booked a car thinking you would pay $150 for the week, only to end up paying $400 at the counter? It's common for consumers to suffer sticker shock brought on by a low base rate that turns into an exorbitant bill when all those mysterious taxes, fees, and insurance add-ons are included.

The rates listed on SmarterTravel.com's website are base rates for car rentals. Unless stated otherwise, prices do not include the various fees and taxes added to each rental, which vary by state, agency, and rental location. However, since fees can add a significant amount to your rental car bill, we feel it's important for you to understand just where all those extra dollars are going.

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Even within a region, fees and taxes will vary between rental locations and companies. Often, rental agencies are franchised, and since many of the fees are in part determined by state and local tax rates, airport costs, and relative demand, compiling all the possible taxes and fees is a non-standardized, piecemeal process.

Renting through an organization that discloses all fees up front is the best way to avoid paying more than you expect. Travelocity has a "total price" feature that allows you to see all taxes and fees, with the exception of insurance, up front. And, booking directly through car company websites often means that you can see an itemized list of charges before you book. Always remember, the best way to fight suspect charges tacked on at the counter is to print out your itinerary so you have a record of the quoted price.

Below are explanations of many of the common taxes and fees that rental companies add on to car rentals. The fee types have been divided into taxes, common fees, and other possible fees.

We've also provided summaries of the different types of insurance that rental companies offer, and have indicated what insurance you may already have that will cover the car, your belongings, and you while you are renting a car.

Taxes | Common fees | Other possible fees | Insurance fees

Taxes

There's no getting around taxes. You will be subject to local and state taxes when you rent a vehicle. But knowing about how much to expect will allow you to budget accordingly, and will reduce counter frustration. Always check when booking so you know how much you'll be paying in taxes. Taxes include:

  • State and local sales tax: This tax varies by state. For example, on a Hertz rental in Boston, the sales tax was five percent; while on an Avis rental in San Francisco, the sales tax was eight percent.
  • International taxes: For international rentals, taxes can be high. For instance, a Hertz rental in Paris carried a tax of almost 20 percent, and on an Avis rental in London the tax was over 17 percent.

Common fees

Here are some of the more common fees you'll encounter when renting. These fees are hard to avoid, although you may not find all of them on every bill. Knowing what each is may not lower your bill, but it will make you a more informed consumer.

  • Deposit

    : Rental agencies generally charge your credit card for a deposit on the rental vehicle, but do not process the amount unless, upon return, the car has been damaged or misused. The amount varies but may be hundreds of dollars. For example, at Budget, the minimum deposit is $200 or the total estimated rental charges plus 25 percent, whichever is greater. For an Advantage rental at Los Angeles International Airport, the deposit is $300 plus the amount of the rental. Keep in mind that the refundable charge, while not processed, can affect the spending limit on your card.

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