What to Look for in Car Rental Companies

There are many different deals out there when it comes to renting a car. It is easy to get scammed or get stuck with a rental package that doesn’t meet your needs. Below are some tips for things to look for to make sure you are getting a good deal.

1. Look for a company that has a discount program. Some let you sign up for their own discount rewards program and others will give you discounts if you use a certain type of credit card.

2. Look for a company that does not pressure you into using their insurance. Your insurance likely already covers you and your rental car, and the added insurance is unnecessary. Some companies will refuse to rent to you if you do not purchase their insurance.

3. If possible, rent your vehicle from a company outside of the airport. Car rental taxes can be upwards of 45% higher at an airport. Take a taxi or shuttle away from the airport to save some money.

4. Comparison shop and look out for special offers. Many companies will offer discounts during the slow season or other times of the year. Taking advantage of these offers can save you some cash.

5. In order to make sure you aren’t getting scammed, it is best to rent through an established chain of car rental companies. Hertz or Budget are two well-known examples with good reputations.

6. You should rent your car from a company that allows you to fill up the gas tank off-site. Car rental companies will charge you a surcharge for filling up with them, so getting gas elsewhere will often save you money.

7. If you have time in advance, consider shopping online. This allows you to comparison shop easily, and reserve your car ahead of time. Sometimes you can combine this with a hotel stay or flight to get a discount on a packaged deal.

8. Make sure your rental fits your needs. If you are driving one place to another, you need a company that will allow you to drop off your vehicle at a different spot. If you are staying in town, the same location will probably be fine for drop-offs.

9. Try to find a company that offers free unlimited mileage, and make sure it applies to the places you will be driving. Some places offer it, but only for local travel. Check into these questions before booking.

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Currency conversion scams used by car rental companies

There are usually transaction charges whenever you buy services with your credit card in your own country, although the merchants that sell you the services or goods will normally pay these (they will, however, cover the charges by increasing the retail price). But the moment you use the credit card to buy goods or services in a different currency, you will suddenly find extra charges appearing. The first is simply for handling a transaction in a foreign currency. The second is the currency exchange rate commission.

The prevailing national exchange rate will be charged if the bank is being honest. This will mean the transaction has a neutral cost. But if the bank is less than honest, it will use a lower exchange rate. This means it costs you more to buy the goods and services than if you went to a money changer and used cash. Worse, you are being charged for being given the poor value in the transaction. For these purposes, it can be worth acquiring a “foreign” credit card if you’re a regular traveler. This way, you avoid foreign currency charges. However, there’s a further problem to avoid.

Some international car rental companies operate their own currency conversion. So let’s say you have a US$ credit card and you go to a branch of a US rental company in Paris. Some branches do their own currency conversions and bill your credit card in US dollars. That sounds good to you because there are no foreign currency conversion charges to pay. But suppose that conversion uses an exchange rate that’s significantly worse than international rate. You might be paying 10 or 15% more than locals would pay, i.e. rather more than your honest bank would charge you.

Some local car rental companies offer conversion through third party banks. This sounds good. You’re being billed in your own currency so no administrative fees. But what often happens is that the exchange rate is very poor and the difference between the rate you pay and the rate the converter uses is split with the rental company. Always prepay or, if you speak the local language, refuse the option of local conversion. This reduces the risk you will be scammed.

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Don’t save money on cheap flights and then lose out to fraudsters

Years of continuous warnings have begun to pay off in the war against the scammers who send junk email suggesting you can, with a few clicks of the mouse, find yourself in possession of thousands of dollars. Most now know never to reply, even if the sender appears genuine and the rewards look significant. But when you get on an airplane clutching your cheap flights tickets, it’s easy to leave your early warning system behind. The fact you’re going on holiday is not a guarantee you will not be targeted. Indeed, the reverse is true. The fact you don’t know the local culture or speak the local language may mark you out as the most desirable of targets. So here are a few things to watch out for.

The most common scams are the people who approach you in the street or cafes, and ask to buy your US dollars for local cash. It’s true that, in some countries, there’s a black-market currency exchange system. But are you confident you can spot forgeries of the local currency? Unless you’re very careful, you can be handing over your genuine greenbacks in exchange for local Monopoly money. Then ask yourself what the accepted international rate is. Are you absolutely certain you are getting the right rate or better than the right rate? What is your reason for buying local currency on the street when you could walk into a bank and get the same deal with guaranteed rates and genuine local currency?

Now let’s say you’re in a restaurant or paying your hotel bill and the merchant offers to bill you in US dollars. This sounds like it’s a good deal because you avoid the extra fees and exchange commissions on your credit card. But do you know what exchange rate you’re going to receive? Yes, you will be billed in US dollars but this does you no good if you are being substantially overcharged. Beware because, in some countries where cheap flights land, there are third parties who convert the amounts billed and claim from your credit card in US dollars and split the additional profit on conversion with the hotels, restaurants and other merchants. Never trust what the local say. Verify before you accept.

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Car rental companies and offers of additional insurance

Everyone who has rented a vehicle has experienced the phenomenon. You arrive at the collection point. More often than not, this is at an airport and you are already tired. You really don’t want to think about anything other than getting in the vehicle and driving to your final destination. But the counter staff are full of dire warnings about the perils of driving without the additional insurance cover they have on special offer. So you hesitate and the hard sell comes. If you’re a stranger to the local legal liabilities, it’s easy to get suckered into buying. As a general rule, it’s always a mistake to be spooked into buying when you have no chance to verify what you’re being told nor whether the price you’re being asked to pay is reasonable. So here comes two very simple rules.

If you’re going to use a car rental company inside your own country, you need to check the wording of your own auto insurance. The vast majority offer liability cover when you drive a vehicle not belonging to you. This covers all third party liability claims that might come your way whenever you drive a vehicle belonging to a friend or hire an alternate. The difficulty comes in the cover provided against damage to the vehicle you are driving. Collision and comprehensive cover tends to be limited to your own vehicle. It’s at this point you pull out the Terms and Conditions for the credit card you are going to use to pay. Many credit card companies offer some degree of insurance cover when you pay by card, but you need to be very careful about all the limits and exclusions.

If you are going to use car rental companies outside your country, the insurance cover you have on your own vehicle will almost certainly not cover you. Now you shop around and buy adequate cover from a third party insurance company. This will always cost significantly less than the insurance cover offered at the last minute by the rental company. It sells you cover that gives it the maximum commission, That’s the way it maximizes its profits.

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Looking at car rental companies and European driving

What now falls under the umbrella of the European Union and, for now, offers a single currency, also allows free travel across borders. Once you have been through the immigration checkpoint at the airport, you can get into a vehicle of your choice and drive anywhere without having to produce your passport to move from one member state to another. This does not mean a police officer cannot stop your vehicle for a moving traffic offense and demand you prove who you are – many countries have fixed penalty systems that allow the police to collect the fines on the spot. This reflects the administrative hassle of issuing tickets in one country and chasing people for payment in a different country. In this respect, life on the road is not unlike life on American roads. But you should recognize the factors and plan for the best deals.

In the US, there’s a single federal excise tax on gas. State and local taxes then add a further amount per gallon. It’s more or less the same in Europe but there are variations. For example, the British are the fuel tax capital of Europe with the combination of Value Added Tax (VAT) and excise duty adding 60% to the cost of a liter of gas (yes, even in Britain, gas is sold in metric liters). If you go to Spain, for example, only 48% of the price per liter is tax. But if you drive a vehicle that uses diesel, you only pay 41% tax in Spain. With the exception of Britain, where it is usually more expensive by as much as 10 pence per litre, Diesel is in fact almost always the cheaper fuel.

Ah, so now you see why you need to know what fuel the vehicles supplied by car rental companies will use and where you are proposing to drive. You can save significant dollars if you drive a route close to a border, staying in cheap accommodation in one country and buying cheap gas in the other. Why are prices different? It all comes down to the extent of the debt crisis in each country and the amount each government decides to collect from drivers. The cost of fuel in east European countries is consistently cheaper, for the record.

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