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When Should You Pay Those Pesky Car Rental Fees?

Author: Jacob Taylor

We're all aware of how airlines love to nickel-and-dime us with add-on fees (see Air and Rail Travel Fee Rip-Offs). But unbundled pricing has spread to other sectors of the travel industry as well, such as rental cars. A typical hired-auto bill nowadays contains an alphabet soup of additional fees, surcharges and taxes (see this sample bill from Hertz). They can make that appealing base rate you were quoted seem very far off-base.

Of course, some of these extras are imposed by government agencies or airport authorities, making them non-negotiable. But many other fees are entirely optional. Even so, they can catch a renter off-guard – especially since sales agents at the pick-up counter are often incentivized to earn commissions on fees, and they'll be hard-selling those who haven't done their homework.

The Federal Trade Commission's Renting a Car advice advises consumers to question fees when shopping: Comparing advertised rates for rental cars may not give you an accurate picture of the price you will pay. Try to make an ‘apples to apples' comparison of car rental prices that includes all mandatory fees and charges, as well as charges for options…Some fees may be quoted when you reserve a car online, though you may not find out about all of the charges until you go to the rental office to pick up your car. Read your contract carefully, and look for fees triggered by specific events – like accidents.

Learning About Fees

Here's a rundown of common rental fees you may (or may not) want to pay.

Insurance waivers. The hardest sell may be for collision damage waiver (CDW), loss damage waiver (LDW) and other waivers. Some renters think these are insurance, but technically they're guarantees the rental firm will pay for damages under many conditions. Costs vary considerably, even at the same firm; Enterprise's Damage Waiver runs $8.99 to $29.99 per day, based on vehicle type and location, for example.

However, you may find such purchases unnecessary because you already have suitable protection. The Insurance Information Institute recommends contacting 1) your own auto insurance company and 2) the credit card company you're using to pay for the car. Either or both of these entities may provide adequate coverage for accidents and/or theft or damage when renting. (See Debit or Credit Card: Which to Use for Car Rentals).In addition, the FTC suggests a renter's employer and/or a motor club may cover certain rentals.

Your own health insurance and homeowners' insurance may also cover you for, respectively, the personal accident Insurance and personal effects insurance many companies try to foist on you. However, it's worth noting that different rules may apply with insurance coverage for car-sharing programs such as Zipcar (CAR) and peer-to-peer rental services such as Turo (formerly known as RelayRides). So be sure to double-check the policies and ask your own carriers about these specifically.

Fueling options. Traditionally, you had two choices: Return the car with a full tank of gas (that you paid for) or return with an empty tank, and allow the rental company to fill up (and charge you for the full tank, even if you returned it only half-empty). Now, though, many companies are offering a prepaid option, in which you pay a set amount for a full tank of gas in advance, relieving you of the responsibility of worrying about the gas at all. Avis says the fuel rates it uses to calculate the charge are comparable to the current local retail pump price, and sometimes they're even a bit better. Of course, it's to your advantage to return with the car running on empty if you select this option.

Even so, sneaky little surcharges can still apply. Dollar for example, charges a $13.99 fee for renters whose car use was under 75 miles, but who fail to provide a receipt for any gas purchases – even if they take the prepaid option.

Roadside service coverage. What was once offered for free is now usually offered for a fee, which can vary. As Avis states: If you do not purchase the Extended Roadside Assistance in advance, you may incur added costs for providing [rescue and repair] services. Sometimes problems as mundane as a flat tire or dead battery could generate these "added costs." Buying this service may be unnecessary, though, if your motor club membership covers rental cars. If you are tempted to go for this coverage, ask in advance what specifically is covered.

Toll pass options. Many rental firms offer transponders that expedite your moving through toll plazas, allowing you to access the "electronic pass-only" lanes. Of course, there's a fee; National charges $3.95 daily (up to $19.75 per rental) for such access in the Northeast. Conversely, if you knowingly or unknowingly incur a violation while traveling on toll roads, there are penalties. In addition to charging for all toll authority violations, Dollar imposes its own $15 administrative fee – per violation. If your itinerary takes you on many of these turnpike roads, paying for toll access can make sense.

Additional driver/underage driver. You may want to share the driving with someone else, but – not surprisingly – there can be a fee attached. When? Budget's response is sometimes, since rates and rules can vary not only by location, but among franchised and corporate facilities. In most states, Budget charges $13 per day, up to $65 per rental. Is that worth it? Only you can decide: If the unregistered driver is at the wheel and an accident occurs, the rental company could refuse to cover any costs, even if you paid for the waivers. And think twice if that second driver is younger than 25, since that means more fees. Budget provides a comprehensive city-by-city guide for the United States detailing additional surcharges for drivers under 25, which range from $5 to $52 daily.

Child safety seats. All U.S. states and territories require automotive safety seats for children. Bringing your own safety seat (which you should do anyway, if you and the kids were on a flight first) is not only safer, but it will save money on renting; Enterprise says its seats average about $9 per day. What's more, rental companies such as Hertz and Thrifty warn that availability of seats may be an issue.

Other fees. There's no shortage of additional rental fees, so it can pay to read the contract fine print, particularly for extras such as GPS or ski racks.

The companies are getting less forgiving if your plans change, too. At Alamo, a reservation canceled more than 24 hours in advance costs $5, while a no-show or a cancelation within 24 hours costs $10. With Payless' prepaid reservations, canceling 48 hours prior carries a $50 fee; cancel under 48 hours and you forfeit the entire prepaid amount. With Budget, a late return racks up hourly and/or daily charges, in addition to $10-per-day late fees. Budget also charges a $10 daily fee for rental extensions.

The Bottom Line

Add-on fees can total more than the cost of the rental car itself. Take the time in advance to determine if any of these extras make sense for you. Don't wait until you're confronted by an aggressive sales rep at the counter. You've better things to do – like getting on the road.

See also The Facts About Rental Car Insurance and 8 Things You Need to Know Before Renting a Car.

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