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Car rental costs can include many possible additional charges.  Read our review of the various costs that can be added to your rental expense.  When you are considering making a reservation for a  rental car, make sure the Company's rental estimate includes all of the potential charges. 

 

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Travel Advice/Travel Tips -  Car rental costs and considerations

There are numerous options to consider when renting a car. Many of the options provide “peace of mind” coverage but add considerably to the cost of the rental.

Identifying a rental car company

Most people have some brand preference when it comes to renting cars based on prior experience. Other travelers rent cars based on price or discounts associated with membership in automobile clubs (for example, a AAA membership qualifies you for a nice discount when renting from Hertz).

In general, you can get the lowest rates from most companies by using their Website to arrange for the rental.

  • Making your reservation by telephone often results in slightly more expensive rates but  the Customer Service Representatives (CSR’s) are able to answer questions, while the Web site will only direct you to a FAQ page (Frequently Asked Questions).
  • The very worst way to rent a car is to appear at the rental counter and ask if they have anything available. Imagine that, a rental car company hooking a fish without trying!

 

Costs

Do your best to rent from a company that provides unlimited mileage rentals. Make sure that your rental agreement lists all of the expenses that you will encounter in addition to the base rate for the car. There are numerous additional fees and expenses. Included among these additional costs are:

Sales and special purpose taxes

These taxes may include state, local, and special purpose taxes (e.g. airport taxes for renting at an airport location). Many international rentals will include a Value Added Tax (VAT) that is fairly expensive (and which may, in some cases, be refunded by a complicated and overly time-consuming process - see our article on VAT).

Vehicle Licensing Fee

Adding a vehicle licensing fee is a common practice with international rentals.  The licensing fee, if it exists, is mandatory  (usually less than $20).

Road Tax

The road tax is another common practice with international rentals. Some countries require the purchase of a road-use sticker at the time of rental.

Insurance

When driving a car, you need to be protected for personal liability, theft damage, collision damage, and medical care for you and any of your traveling companions who might require medical treatment for accidents that occur while you are driving the rental car. 

  • Although your personal automobile insurance may provide these coverages when renting in the U.S., it may not cover you when renting vehicles in international locations. 
  • Make sure you understand the limitations and restrictions of your policy before operating any  rental vehicle
    • If you are renting internationally, make sure that your automobile insurance is effective in the specific country or countries that you will be visiting.
      • If your insurance does not cover driving in a specific country, you should examine the insurance package offered by the rental car company, and make sure that it provides primary coverage for CDW, liability, theft, and hospitalization

Collision Damage Waiver

Rental car companies are concerned about being reimbursed for any damage to their car, if you should have an accident while driving their equipment. 

  • The rental car company will  attempt to collect any damages from your car insurance company (based on the terms of your policy that were  in effect at the time of the damage) or directly from you if your insurance carrier disclaims responsibility.  

All car rental companies offer optional Collision Damage Waiver (CDW) insurance.

  • If you have a written statement that your automobile insurance company will cover CDW when you drive a rental car, then you may want to consider declining the CDW offered by the rental car company. 
  • Whether or not you decline the coverage depends on personal issues and we make no recommendation on this issue.

Many credit card Companies provide  CDW  insurance coverage that initiates only if you use their credit card to reserve  and pay for the rental.

  • In order to activate the credit card company's CDW coverage agreement,  you  must decline the rental car company's CDW insurance when you sign the paperwork at the car rental desk. 
  • Before you decline CDW coverage, make sure that your agreement with the credit card company provides rental car insurance coverage and that the coverage applies to the car that you will be renting, regardless of location.

The coverage provided by the credit card company is secondary to that offered by your primary automobile insurer.

  • In other words, the CDW insurance provided by the credit card company pays only after your car insurance company has settled and paid as much as it is going to pay if the car is damaged.
  • In addition, most CDW coverage (including the coverage offered by the rental car, credit card or car insurance companies) requires that you pay a "deductible" if the car is damaged in an accident.   The deductible is your financial obligation.

Many credit card companies that offer secondary CDW insurance  for cars rented in the U.S. do not provide CDW coverage for international rentals.

  • Be sure to check with your credit card company to determine whether they provide foreign coverage and the details of this coverage.

Electing to take the CDW offered by the rental car company does not leave you in the clear if an accident occurs, since you will be liable for a deductible (just as your normal automobile insurance policy has a deductible requirement).

  • In addition, note that CDW applies only to damage to the rental vehicle.

 In various international locations you can "super size" the CDW to reduce the excess deductible that you would have to pay in case of accident. If you are looking for hassle free renting, opting to reduce your deductible obligation is something to consider.

Theft Insurance

International rental car companies may offer optional theft and vandalism insurance coverage for the car.

  • Our preference, when traveling internationally is to purchase theft insurance as a method of simplifying the potential difficulties on a trip.
  • Of course, whether you elect to pay for this option has a direct relationship with your outlook on spending time with the personnel of the rental agency in the case of theft.

Personal property Insurance

Personal property insurance covers your belongings and other items that may be lost, stolen, or damaged while in the car during the term of the rental.

Personal injury insurance

Personal injury insurance provides covers the medical assistance that might be needed by drivers or passengers due to an accident.

Third party liability

Basic insurance coverage covering bodily injury and personal property damage that might result from an automobile accident.

Other charges

Additional Drivers

Drivers other than you must be added during the rental procedure. International rentals will often require a small, daily fee for each additional driver.

 Additional time

 Rental periods are composed of 24-hour days.

  • If you rent a car at 8 A.M. and return it at 10 A.M. the next day (26 hours after initiating your rental), you will have extended your rental into the next day.
    • This means that you must pay either an hourly fee or a pro rata share of the daily fees (as stipulated in your rental contract).
  • Similarly, if you have a weekly rental, you must return the car on the seventh day; at or before the time you originally rented the vehicle.
  • Some companies have a grace period.
    • Be sure to check out the policy of the rental company.

Child Seat

Child and infant seats can be reserved from the rental company, usually on a fee basis

Navigation System

An in-vehicle navigation system may make finding your way easier, especially if you have no familiarity with the area that you are visiting. Costs generally run between $10 and $20 per day.

Drop-off fees

Rental car companies often assess a surcharge if you rent a car in one town and drop it off at another town. If there are several airports in an area, usually, you not be charged for picking the car up at one airport and dropping it off at another.

Our best advice: be sure to understand the Total Cost of Renting (TCR) before you make a reservation. When you take possession of the rental car, make sure that the agreement contains the same costs that  you agreed to when making your reservation. Disputing a fee when you return the car is often too late to seek an adjustment.

(The information we provide is this article should be considered as opinion.  Check with your insurance agent, rental car company, and credit card company to determine all costs and potential liabilities related to renting and operating a motor vehicle.)

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