How to Protect Yourself from Common Rental Car Pitfalls



Jason and Anna had just booked a week-long honeymoon trip to the island of Kauai. They looked online for a modest rental car to help them get around the small island, and were able to find one at a rate of under $30/day. When they got off the plane and went to the rental car kiosk, however, they were told they needed to purchase additional insurance, were informed they needed to pay an exorbitant state tax on the car, and after their week on the beach, were charge extra for marks on the hubcaps that may or may not have already been there. By the end of their trip, Jason and Anna had spend nearly $1,000 after five days of renting a 2010 Ford Focus.

Does this story sound familiar? It's surprisingly common. Whether through ignorance on the part of the renters, deviousness on the part of the rental agency, or both, it can be very easy to overpay on your rental car. If you're new to the rental industry, or have been burned in the past, here are a few tips to consider as you approach your next rental car experience.

Check with Your Insurance or Credit Card Provider

Car by Credit Card (isolated on white)

Let's say that you are about to close the deal on your rental car, when either the rental car employee or an online prompt asks if you would like to pay a few dollars extra to insure the car. Rental car insurance can cover the costs of damages to the car, medical expenses associated with an accident, third-party claims, and even protection against under-insured or uninsured motorists. And for just a few dollars a day, you'd almost be dumb not to sign up for it.

One common mistake that rental car companies can often take advantage of is over-insuring your rental car. If your currently car insurer or credit card company provides a rental car insurance plan, purchasing insurance directly from the rental car company is often not necessary, and can often duplicate your existing insurance coverage. Rental car employees are aware of this, and are counting on you to be ignorant of it. According to one source, some rental car employees "operate on a commission basis," needing to make a certain amount of up-sales or risk termination.

The topic of insurance is tricky enough as it is, and even if your current insurer or credit card provider offers some kind of rental car plan, there are number of questions you'll need to ask:

What insurance coverage is required by the state I'm driving in?

If you're planning to drive your rental car somewhere within the United States, it's important to understand that each state has set unique insurance requirements. For example, if you're booking a rental car in California, you only need to worry about auto liability insurance; whereas in Connecticut, you'll also need to have underinsured and uninsured motorist protection in place. Consequently, it's a very good idea to research the minimum insurance requirements of the state in which you're picking up the car. It just might save you from purchasing unnecessary insurance coverage.

Does my existing car insurance cover car rentals for business trips?

person walking with suitcase business travelIt's often the case that your personal car insurance provider will not cover your rental car if you are on a business trip; however, according to Consumer Reports, there is a chance that your employer's insurance may cover your rental car. Be sure to check with both your personal insurer as well as your employer before booking your trip.


What coverage does my credit card company provide?

credit card go cartIf you use a credit card to pay for your rental car, chances are your credit card provider will offer some type of rental car benefit you can use at your discretion; however, it's very important to identify just how extensive that coverage is. Most of the time, your credit card will only cover collision and any other damage directly to the car - it may not cover medical costs from injuries sustained in a rental car accident, third-party claims such as property damage, or coverage against underinsured or uninsured motorists.

Before you even decide what kind of car you want to drive for the week, contact your credit card provider and figure out what holes are in your coverage. Coverage from your credit card company can change frequently, so this might be something to do each time you book a rental car.

Primary? Secondary?

toy-car-on-insurance-policySpeaking of credit cards, you might be surprised to find that the insurance provided by your credit card will most likely be considered a "secondary" insurance, meaning it will only cover insurance fees and charges that your "primary" insurance does not. If this is the case, you will need to make sure you have primary insurance coverage - either from your personal insurer or the rental car company - in place to act as your primary coverage.

Read the Fine Print


Admittedly, taking the time to read the fine print of your rental agreement is neither exciting nor quick, especially if you are renting your car at a busy airport and are anxious to get to your destination. However, rental car agents can take advantage of your urgency to get through the paperwork by including unnecessary or unwanted add-ons to your rental agreement without your knowledge. And while you may have agreed to pay a certain rate when you first booked your rental, certain events - the length of your rental, whether you're late for your scheduled pickup time, or if your flight was delayed - may trigger a rate change at the time of pickup. While these rate changes are often unavoidable, it's still important to be aware of them.

Terms to Look For

Couple receiving a new set of car keysOnce you sign the rental agreement, it becomes a binding contract, and very difficult to dispute later on. So before you write your name on the dotted line, here are a few important terms to look for that might raise some red flags:

Even if you have decided to decline the rental company's insurance in favor of your own insurance, you should still scan the rental agreement for terms like collision damage waiversupplemental liability protectionpersonal accident insurance, and personal effects coverage. These are all optional insurance coverages the rental company will try to offer you, and in most locations, rental companies cannot refuse to rent the car to you if you decline these coverage options.

It's also important to note the return time identified on your rental agreement, along with any penalties you might be forced to pay if you do not make that return time. Some rental car companies will charge additional fees if you return the car too early or too late; some even define "late" as "within an hour of the return time." Meanwhile, other companies offer what's called a grace period on your return time, which gives you some wiggle room in terms of exactly when you need to drop off your car.

You should also pay attention to any additional state or sales taxes that are tacked onto your rental agreement. In some cases, the amount you pay in taxes can almost double your total rental fees. These are fees you probably won't be able to avoid, but they're also not something your rental agent will necessarily inform you about either, so it's good to be aware of them long beforehand.

Document Everything

woman looking at car tire

One common scam reported by several rental car customers is being charged for damage to the car that either 1) you did not cause 2) is more wear and tear than damage, or 3) simply does not exist. Some rental car companies will charge hundreds, even thousands of dollars for scrapes, nicks, and dings that could be easily repaired or brushed clean by an auto shop for a fraction of the price.

Several investigative reports have revealed that certain rental companies who own their own repair shops don't even repair the damage they charge their customers for, charging the next unsuspecting customer for the same damage.

Thankfully, you can protect yourself against this scam in a couple of ways. And while they might require you to approach your rental car as though it were a crime scene, these simple methods can save you lots of money once your rental experience has concluded.

Make sure to consider a settlement for any injury received in a car crash. Many websites offer injury settlement calculators to estimate the amount you could acquire.

Photos and Videos

man taking a picture of a car to sell

One common but effective tool in avoiding damage fraud is your camera or smartphone. Before you sign the rental agreement, ask the agent if there is any damage already on the car that you should be aware of. Once you sign, immediately inspect the car, photographing existing dings or scratches, and even videoing both the interior and exterior of the car before you drive it off the lot. This sort of documentation can serve as evidence later should the rental company attempt to charge you for damage to the car.

When documenting the condition of your rental car, you can't be too careful. Even a slight crack on one of your plastic wheel covers could result in a fee for you.

Written Statements

person signing a document with a penAnother way to protect yourself is to obtain written statements from your rental agent both before and after your rental experience. One common complaint registered by rental customers takes place when they turn their car back in, are told by the agent that the car is "good to go," only to find later that they have been charged for additional damages later on. Obtaining some form of documentation stating that the agent has approved the condition of the returned car can help you dispute fraudulent claims.

Don't Be Silent

woman shouting into a megaphone

Let's say you do everything right. You've made certain you're not paying for anything you don't want, you have photos, videos, and written statements corroborating your story, and you still get over-charged. Several customers are either too humiliated or embarrassed to say anything about it. Foreigners, the elderly, or customers new to the rental car experience are often the target of rental car scams because they either assume the additional costs are business as usual, or they don't know how to voice their concerns.

Luckily, there are a number of ways you can be vocal about your rental car experience:

The Better Business Bureau

Several of the top rental car companies are registered with the Better Business Bureau, an independent organization that allows customers to file official complains against companies while also providing those companies an opportunity to respond to those complaints. The BBB gives each company in its database a score, which can be affected negatively if a company has a lot of complaints registered against it.

The Federal Trade Commission

The FTC is a government organization dedicated to holding businesses accountable for unethical practices. It's surprisingly easy to file a complaint with the FTC, and the organization has an entire section dedicated to auto rental scams.

Brush Up before You Buckle Up

man thinking about a car

Finally, it's important to get to know the rental car company before you book your car. Not all rental car companies are created equal, and many companies have actually developed a good reputation for honest agents and ethical practices. It's important for you to know the difference, which is why we at BestCompany have reviewed some of the top rental car companies in the industry. Using our expert reviews, you can determine which companies carry hidden fees, which pay their agents on commission, and which have received complaints. This way, you'll be able to choose the best rental car company for your budget and your needs.

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