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
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
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
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 -
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).
The road tax is another common practice with international rentals.
Some countries require the purchase of a road-use sticker at the time of
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
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
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
All car rental companies offer optional Collision Damage Waiver (CDW)
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
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
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
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.
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
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.
Drivers other than you must be added during the rental procedure.
International rentals will often require a small, daily fee for each
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
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 and infant seats can be reserved from the rental company,
usually on a fee basis
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.
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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