Car hire

No cards, no car - but you can beat the excess charges

A rental car is of pivotal importance for most villa holidays, but the information given by some rental companies, even famous international brands, is often inadequate and can lead to unexpected difficulties. 

For example, few prospective customers understand that to rent a vehicle, even if the rental is pre-paid or arranged by means of a voucher system, the lead driver must still supply a valid credit card. Most car rental companies will not accept a debit or Switch card, or even a cash deposit. Indeed, if the vehicle to be rented comes into a special category, such as a cabriolet or mini-van, the driver may be asked to present two different credit cards on taking possession of the vehicle.

This is because the rental company wishes to protect itself against excess amounts not covered by insurance for loss or damage: additional penalties due to the failure to return the vehicle to the right place at the right time; one-way drop-off fees, based on the distance from the renting location to the pre-arranged drop-off point; and the charge for refuelling the vehicle if it is returned with less than a full tank of diesel or petrol.

In former times an imprint was taken of the credit card and no charges deducted until the date when the vehicle was returned, or should have been. Nowadays a security deposit is taken by ‘reserving’ an amount of credit on the card. For a modest category hire car, the sum reserved is likely to be between eight hundred and one thousand Euros in France; for a more expensive vehicle, twice or even three times that amount. It is essential therefore to present a credit card with sufficient spare credit to enable this ‘ghost’ transaction to take place, and to realise that the available credit on the card until the security deposit is either taken or cancelled will be reduced by the sum reserved by the car rental company. Many lead drivers elect to take with them an extra credit card not in daily use to avoid the security deposit impacting on their spending plans for the rest of the holiday. 

One of the few organisations to make these critical points clear is Carbookers, part of the Travelport Group, which supplies vehicles from all the leading rental companies, often at significantly lower rates than are available from them directly. This reflects Carbookers’ buying power in the market and the willingness of well-known rental firms to discount their normal prices, so long as the discounts remain discreet and comparisons with their normal prices are impossible.  Carbookers achieves this by not disclosing the name of the rental car provider until after the booking has been made. Unlike, arguably, hotels and airlines, the risk of the customer being unhappy with the vehicle supplied is extremely small, because the difference between the various cars and service offered by major rental firms is not significant.  Carbookers’ high volume business can also influence positively the attitude of the car rental company at the renting location, and make a free upgrade more likely. 

There is a popular myth that rather than book or reserve a rental car many months ahead, the best prices are to be had by simply turning up. At peak periods, however, 90% or even 100% of stock is booked out in advance, and it can be almost impossible to rent a car without a reservation from the major international outlets.

Where a local firm has a car available at peak times, and at a cheaper price, this is usually because it has incorrectly calculated its inventory. Mistakes of this nature often indicate a badly-run business, which can impact on the quality and reliability of the cars supplied. Older models, particularly, may not be well maintained, or may lack important items such as a jack, spare wheel or rear seat belts. The rental contract may contain fewer clauses and be simpler to read, but much may be taken on trust, a significant risk for the customer if things go wrong. Few small firms operate a helpline or will supply a replacement vehicle in the event of a breakdown, and there can be serious legal problems if a rental vehicle is stolen. 

All the major international outlets try to persuade the renter to take out additional optional insurance, known as super CDW and/or super TP, to reduce the excess applicable in the event of the rental car being damaged or stolen. It is often still impossible to eliminate this excess entirely, and the optional insurance is poor value for money. 

The most cost-effective solution – one followed by no fewer than 11,000 UK motorists last July alone – is to take out an annual policy supplied by Insurance 4 Car Hire, which for less than £50 covers all the excess on theft and damage to the rental vehicle, including many items not normally covered such as windows, tyres and the undercarriage. This policy gives the renter complete peace of mind, able to decline the car rental company’s excess insurance at the counter. Should any unforeseen incident occur, they can simply pay the sum demanded by the rental company by credit card on returning the vehicle, and make a claim for full reimbursement on their return home.

The concept was the brainchild of Larry Dale Ursich, and some car rental companies have responded by offering the optional excess insurance in advance of collecting the vehicle.  However, it remains expensive, and still does not necessarily cover the exposure in full.  While the big companies are nervous at the success of Insurance 4 Car Hire in supplying a much-needed solution in the market, they are unwilling to offer a directly comparable product. Excess insurance for them is a significant revenue stream, reflecting how easy it is to persuade a customer in a queue to put his or her initials in a few extra boxes on the rental contract without reading the small print.

From our September 2007 newsletter