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Hidden Car Rental Fees: What to Look For

AskEd & AnswerEd
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Editor's Note: This story was originally published on March 1, 2010. To see the most recent SmarterTravel articles on related topics, please click on any of the following links: AskEd & AnswerEd, car rental, Ed Perkins, taxes and fees.

My recent story on hidden fees touched a nerve with many of you—especially those who have had problems with rental cars. These reader responses raised enough serious issues to warrant a more detailed look.

Issue 1: Geographical Limits

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"We ran into geographical limits in Vegas. When we rented a car, the agent at the rental counter said we could not take it out of the state. We told the agent that we wanted to see the Grand Canyon while we were in the area, but the agent said the company's cars couldn't leave the state. We would still like to see the Grand Canyon sometime, and flying to Vegas is cheaper than flying to the Grand Canyon directly. Do all the companies there have the same policy?"

The short answer is, "No, not all of them do." Hertz, for example, shows no geographical limitations, and if you book in advance online you have the opportunity to check any such limits before you commit to the rental. If you have any questions, call the rental company before you begin your trip. And if one company says "no," check around for one that will let you leave the state.

I see one big problem here, however. If you book through a third-party site—a discount agency, Hotwire, or Priceline, for example—rental companies sometimes impose more restrictions on cars booked that way than they do not impose on direct bookings.

Nobody wants to plan a Grand Canyon trip only to encounter a rental agent who says, "Sorry, you can't drive our car there." I suspect that if you have any questions, check out the restrictions before making a commitment.

Issue 2: Extra Driver Fees

"The fee that irritated me the most as I was renting a car in Las Vegas was that there are now fees associated with having more than one driver. I wanted my husband to be able to drive, even though 99 percent of the time he never gets behind the wheel, and the rental company wanted $10 a day just to have him on the contract. I think that is positively ridiculous."

Ridiculous, yes, but that catch has been around a long time, with lots of rental companies. Some waive the extra-driver charge for spouses, on some discount programs, and such, but there's no general pattern. As you imply, this is a pure gouge—the rental company's costs don't go up even the slightest bit if another qualified driver takes the wheel. But many companies do assess it, so always check the conditions before you rent. And include the charge when you compare rates with companies that allow spouses at no extra cost.

Issue 3: Local Airport Taxes and Fees

"Other hidden fees include local or airport taxes and fees that the rental car companies say they have no control over. I rented a car in Vancouver at a rate that supposedly included all taxes and fees, but when I returned the car I got hit with an additional $113 in local and airport taxes/fees."

I have no quarrel with rental car companies that collect those locally imposed fees and taxes on behalf of local taxing authorities—often for uses that have nothing to do with improving highways or visitor attractions. Rental companies have no choice, and they resist such fees when they can. Sadly, "taxation without representation" has significant appeal to taxing authorities.

My problems are with adding, as extras, fees that are really part of a rental company's cost of doing business. That includes various licensing fees, "facility recovery" fees, and fees to cover the cost of airport shuttles. Those, too, keep climbing.

I've found, however, that the big online agencies such as Expedia, Orbitz, and Travelocity are pretty good at allowing you to compare rental rates on an all-in basis that really does cover all the mandatory charges. And even the rental companies are generally open about showing those fees before you commit to a rental.

Issue 4: Collision Damage Coverage

"I rented a car in San Francisco, using a credit card with accident coverage. I had my first-ever accident, very minor, in which I was not at fault, but the rental company pegged the damage at $1,000. The credit card company initially agreed to pay, but I found out that a New York state regulation (I live in New York) requires that insurers not shirk their responsibilities by passing claims along to credit card companies. As a result, the charge fell to my regular auto insurance, with the result that I'll have much larger insurance payments for the next three years—payments that will far exceed the amount of the damage."

The only part of this report that surprises me is that the credit card company agreed to pay for the damage in the first place. Most credit card collision coverage is secondary, which means that you have to use up any other insurance you may have before you can collect form the card. That's why I've concluded that you should get primary insurance whenever you can—insurance that pays out regardless of whatever other coverage you may have. You can get primary collision coverage at no extra charge on all Diners Club and a few corporate or top-of-the-line MasterCard and Visa cards, and you can convert nominally secondary coverage on American Express cards to primary by adding an extra charge. Where you can't get primary coverage, you have to figure that if you have an accident, your own insurance will get hit first—with the unhappy consequence of a big damage claim on your record.

Issue 5: Fuel Charges

"Another scam is the requirement that you buy a full tank of gas when you start the rental and return it with what ever is left in the tank, with no credit. The rental company of course charges far more for the fuel than it is worth, and it's hard to arrange your driving to return to the rental office on fumes. In Europe, this scam cost us more than 100 euros."

The last time I looked, most rental companies still offer you the option to rent the car with a full tank and return it with a full tank, with no fuel payment to the rental company. That's what I always choose, even though it sometime mans allowing enough extra time to find a gas station close to the return office. I've heard, however, that rental companies sometimes don't offer this option on some rentals booked through third-party agencies.

Most companies also offer the option of refilling the tank for you after you return it, but they typically charge two to three times what you'd pay at the pump. That's for emergencies when you don't have time to fill the tank yourself.

In most cases, the "buy the tank" option is the worst. Rental companies are my least favorite charity.

As with so many other potential problems, you can usually avoid one of the fuel gouges by checking the fine print on any rental you're considering and taking the right option at the beginning.

 
 
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