When it comes to renting a car, it’s easy to get hooked by a rate that sounds reasonable, but once you make the reservation or see the final bill, that attractive per-day price has morphed into something that leaves you feeling winded thanks to all the extra fees.
Car rental companies can charge fees for anything from GPS and toll transponders to new facilities planned or under construction (customer facility charge) and title and registration of their vehicles with the Department of Motor Vehicles (vehicle license recovery fee).
There are energy surcharge fees (50 cents to $3) to keep the rental car company’s lights on, tire and battery recovery fees ($1 to $3) to dispose of bad tires and dead batteries, additional driver fee ($5 to $10 or more if the additional driver is younger than 25) and overpriced insurance offers.
Technically, car rental fees are not hidden. “What consumers may think are ‘hidden fees’ are actually explained in the rental policy, which is why it’s so important to read it,” said Lucy Bueti, vice president of rental cars for Priceline, an online travel agency for discount rates. “My best piece of advice would be to always read through the rental car company’s rental policy and rules prior to booking, as fees or additional charges will vary from one company and one situation to another.”
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If you rent a car at the airport, it’s about 26 percent more expensive than renting from a nearby location, according to Family Vacationist. The solution? Price out a car rental at an off-site location near the airport to see if it’s cheaper. Factor in the cost of an Uber or Lyft to the rental site. It may also save you money to pick up the car at a downtown location but return it to the airport. “It’s often not more expensive to return the car at the airport, so you only have to deal with the inconveniences one time,” notes Chris Hutchins, host of the podcast All the Hacks.
AutoSlash, a company that helps users find the lowest car rental price, recently estimated that a customer flying into Los Angeles International Airport and renting a car at the airport would pay $453.87 in extra charges from fees, surcharges and sales tax.
These included a mandatory LAX customer facility charge by the airport authority making renters at LAX pay $9 per day up to a maximum of five days ($45 maximum assessment per rental). This fee hits shorter-term renters hardest and pays for the consolidated rental car facility (CONRAC) slated to open in 2023.
Other fees identified by AutoSlash included an airport concession recovery fee, not mandated by airport authorities, but it ensures the rental car company gets a slice of revenue while putting the airport’s cut in its own bucket. At LAX, it’s 11.11 percent.
At LAX, car renters are charged a tourism commission fee by the California Travel and Tourism Commission on revenue generated at airport and hotel rental locations. This assessment is 3.5 percent of the rate.
Vehicle license recovery fees are passed on to customers by car rental companies at LAX. DMVs around the U.S. charge rental companies much higher fees than others to register and title their vehicles. Some states allow car rental companies to pass on some of those costs directly to the customer in the form of license recovery fees.
The local sales tax in Los Angeles is 10 percent.
Car rental companies may charge for additional drivers, while others may waive that fee as a policy or promotion. One solution could be joining a car rental company’s loyalty or rewards program, which sometimes eliminates extra driver fees. Companies like Dollar, Hertz, Sixt, and Thrifty offer this perk for members. The additional driver fee is waived for rentals with Avis and Budget in the U.S.
Rental car companies usually charge an added fee for drivers under age 25, who are considered higher-risk to the tune of about $25 a day to as high as $50. AAA members who rent through Hertz get the young driver fee waived, according to Family Vacationist. Car sharing services like Getaround and Zipcar charge tiered fees for young drivers.
You might be tempted by a lower price for prepaying for a reservation. The fine print will likely show that you’ll be charged a fee if you cancel. “Things change, rates change, plans get canceled. The small savings is often not worth it, unless I’m traveling on very certain dates and to somewhere where I expect cars to sell out,” Hutchins said.
Charges for additional insurance can often be avoided because your personal auto insurance or the credit card you use to pay for the rental may provide coverage, according to Consumer Reports. Some additional insurance charges offered by car rental companies include the following:
•Loss damage waiver, $25 to $30 daily, is collision insurance coverage that guarantees the car rental company won’t come after you for scratches or dents, or even for totaling their rental car.
•Liability coverage, $12 to $13 per day, ensures that you won’t lose your assets if you hit somebody with your rental car.
•Personal effects coverage, $4 to $6 per day, reimburses you if something is stolen from your rental car.
“The insurance coverage you buy at the rental counter largely mimics the auto coverage you probably already have, except there’s no deductible,” Kathy Kristof wrote for CBS News. But you’re paying annualized rates “that knock your socks off.”
“Add-ons for insurance supplements, including the loss damage waiver, are easy to decline,” CBS reported. “If you have auto insurance at home, it covers you on the road. Pay with a credit card, and you get additional coverage from most major card issuers. Car rental salespeople will warn that neither your insurance nor the credit card will cover their loss of use for the vehicle, which they might try to levy at a ludicrous daily price if you’re in an accident. But this may well be more inconvenience than economic threat, since their loss-of-use claims would have to be substantiated (if pressed).”
The major agencies may not charge all the fees, but you can expect to see at least a few sneaky add-on car rental fees on your bill.