Ed Perkins on Travel: Holiday Car Rental? Avoid Gouges

Car rental sign. Dreamstime/TNS

It’s not too early to reserve a holiday rental if you need one, and you can still reserve without prepaying. The rental car business is famous for its gouges—even within the gouge-happy travel business overall—but you can avoid the worst if you’re careful.

Rates

If your last rental experience was pre-pandemic, expect sticker shock this year. I’m seeing most big-company rates starting north of $80 a day on weekly rentals, including taxes and fees but before any needed extras. Small-company rates, usually to and from off-airport offices, and opaque rates can cut that close to half.

Insurance

Collision coverage remains the biggest potential gouge, but if your rental car gets damaged while you’re driving it, you’re on the hook to reimburse the rental company for the costs of repairs plus loss of revenue while the car is out of service. You absolutely must cover the risk, but you have some options.

The rental company’s collision/loss damage waiver (CDW) is the easiest—and by far the most expensive. If you don’t buy it, the rental company puts a big hold on your credit card, and you have to pay the rental company immediately for the estimated repair and loss costs and claim reimbursement later. It adds about $30 a day, but it offers one big advantage: If your car is damaged, you just return it, hand over the keys, and walk away from the problem, except maybe having to pay for minor damages it doesn’t cover.

Other options cost a lot less but add some extra risk:

• Your own automobile insurance may cover you if you damage a rented car while driving in the United States. A claim on your policy likely costs you a deductible, and any repair bill will go on your record and may increase future premiums.
• Many credit cards offer “free” collision coverage, but most coverage is secondary, meaning you must first collect from your own insurance. Again, it adds nothing out-of-pocket, and it usually pays your policy’s deductible. Because your regular insurance usually doesn’t cover you overseas, your credit card coverage becomes de facto primary. And some travel-oriented credit cards provide primary coverage—the card pays the entire bill everywhere.
• If you don’t want to risk a hit on your own insurance, you can buy primary coverage from third-party insurers such as Bonzah.com or RentalCarCover.com. And big OTAs such as Priceline offer their own primary insurance, usually for $13 to $15 a day.

Rental companies also sell liability insurance, covering damage you might do to someone else or some property. But you need liability insurance full-time, not just when renting a car. Check your regular car or home insurance to make sure you’re covered.

Extra driver. If you want to share driving duties, rental companies usually charge $5 to $10 a day for each additional driver—and more if the additional driver is under age 25. This is a pure gouge; having someone share driving chores doesn’t add a penny to the rental company’s cost. Fortunately, some rental companies waive the fee for spouses or business colleagues; rentals through AARP, AAA, and other organizations often waive one extra driver fee on each rental. Also, membership in a rental company’s loyalty program may include an extra driver at no additional cost.

Child car seat. Rental companies charge anywhere from $60 to $100 a week to provide a child seat, mandatory in most states and many foreign countries. If you’re flying to a destination where you’re renting a car, most airlines check your own child seat for no extra cost. If that doesn’t work, or if you’re renting for more than a week, you may be better off buying a seat at your destination.

Other. You may need to deal with toll collection, which I covered last week. Otherwise, you usually have a workaround for any other extras a rental company tries to fob off on you. Just make sure you say “no” to most.