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We know that consumers object to hidden charges when buying from e-commerce sites, but car rental firms are still doing this. The difference here being that the hidden charges occur offline. 

Having had a nasty surprise after seeing the extra car hire charges from Avis on my credit card bill, I've been looking at several car hire sites to see how upfront they are being about extra costs. 

I found several areas where they could be more upfront, and improve their customer retention rates by ensuring that customers don't receive any nasty surprises when they see the bill. 

The problem with hidden charges and car rental 

Most consumers, especially in these recessionary times, plan their holidays around a tight budget. They've accounted for flights, accommodation, travel insurance, currency etc, and they should be able to find out the total cost of car hire in the same way. 

There are extras around car hire beyond the daily rental charges. These include collision damage waivers, child seats, additional drivers, and fuel charges.

Depending which options you choose, and how far the local car rental desk is prepared to fleece you, these extras can in some cases double the original charge paid on or quoted by the website. 

In my case, I ended up paying €60 for a week's hire of a child car seat, and €140 Euros for a tank of diesel which would have cost less than €90 if I'd filled up at even the most expensive petrol station in Spain. Neither of these charges were made clear before arrival at the Avis counter at the airport, by which point I had no choice.  

This fuel 'scam' has been detailed elsewhere by Which? and others, but it enables the rental firm to charge you over the odds for filling the tank, and then, since most travellers won't return the car completely empty, they probably don't have to pay for a full tank every time anyway. 

A quick search around forums and other review sites online finds plenty of evidence of angry customers feeling they have been ripped-off, and were not fully informed of potential costs before reaching the hire desk, or after their trip. 

This is about managing customer expectations. If you make them fully aware of costs before they travel, then you're less likely to have angry customers who will not use you again, and will also make their voices heard online and elsewhere. 

While you can squeeze more money out of travellers by adding charges at the car rental counter when the customer picks up the car, this a risky strategy in terms of long-term customer retention. 

Are car hire firms upfront about charges? 

I've looked at three popular car hire websites to see how upfront they are being about charges applied at the counter. 

Avis

The Avis site is easy enough to use, though the live chat options, which appears on subsequent pages even if you say 'no thanks' on the previous page gets quite annoying. 

On Avis, having gone through the selection process, I'm on the point of pressing the checkout button. Nothing has been explained about fuel charges and though it does say you can reduce the £767 excess by paying a fee at the counter, it gives you no indication of how much this may cost. 

So, at the point of deciding whether or not to purchase car hire, I don't have the full information on how much this will cost me. On most other e-commerce sites, this would be unacceptable.

From experience, I know that there are extra charges for fuel at the very least, so are these hinted at anywhere? 

Well, not really. All I could find is this line (2.4) in the T&Cs. Not really enough information there. 

If I exit checkout and search FAQs, I can find this. Having paid well over the odds for fuel, claiming that it is just below or the same as the market rate is some chutzpah. 

So, to summarise. A traveller books car hire on Avis, paying for rental only. However, he or she has no idea exactly how much they will need to pay for additional cover or fuel when they get there, just a hint that local charges apply. 

Hertz

Hertz does at least make the maximum amount you will pay for a car seat nice and clear. 

There is no upfront information about fuel options, but there is a list of items not included in the rates, and users can click on the question mark to find out more:

Unlike Avis, Hertz doesn't seem to insist on paying upfront for fuel, and gives you the option to fill up yourself:

It also provides a summary of charges to be paid online and at the counter: 

While there is an unknown - the amount you will have to pay for additional cover at the counter - Hertz is more upfront about charges, and does at least link directly to information about fuel from the checkout. 

Europcar

Like Hertz, Europcar makes it clear what is and what isn't included in the rental charge: 

However, you have to fish around in the T&Cs to find out about the fuel policy. This should be much easier to find. 

Long term effects on customer retention

So, while some are more upfront than others, there is a lack of clarity around charges which really should be addressed. For example, why is it not possible to pay for additional cover before booking? 

Also, since there is a big difference in potential costs depending on whether you have to pay for a full tank of fuel on collection and return empty, or simply fill it up yourself, sites should be more transparent about these policies and the amounts customers may need to pay at the counter. 

As it stands, with each of these firms, customers are potentially liable to face extra charges at the counter, at a point when they are in no position to refuse, given that trips have already been planned, and car hire paid for. 

In my case, I paid around €60 more than I expected. Not an earth-shattering amount, but the lack of transparency, and the obvious profiteering from the local Avis counter has left a bad taste in the mouth, such that I would be reluctant to use this firm again. 

And this is what car rental firms need to consider. Is the extra profit from counter charges worth the damage in terms of customer retention, negative word of mouth and coverage on blogs and forums? 

I would argue that it isn't, and these firms should consider the benefits of being more transparent and managing customer expectations upfront. The firm that does this will get my custom next time I need to hire a car abroad. 

Graham Charlton

Published 16 August, 2012 by Graham Charlton

Graham Charlton is the former Editor-in-Chief at Econsultancy. Follow him on Twitter or connect via Linkedin or Google+

2565 more posts from this author

Comments (25)

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Amir Boroumand

Amir Boroumand, Senior Ecommerce Manager at Habitat at PersonalEnterprise

Great article. I was looking to hire a car yesterday and suffered at the lack of vital information and pricing. I gave up trying to book online and phoned instead.

I'm astounded that an industry as large the car rental market still operates like a shady group of cowboys.

about 4 years ago

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Scott

I agree Graham, fuel charges for car rentals are in the same category as extortionate card charges for airlines. IE unacceptable.

I rented a van for a house move recently and was offered the option to buy a tank at market rate, luckily I'd already figured the tank would be empty before and really didn't lose that much (maybe £10) because of it.

about 4 years ago

Jonathan Kay

Jonathan Kay, Managing Director at 120 Feet

Good article. I always work off the assumption that anything costs extra from hire companies and assume that the car must be returned full (if taken full) or as near to empty as I dare (if taken on this basis) to extra avoid charges.

It's fair to assume that they'll charge for baby seats and sat nav etc; to assume these will be free is probably naive. Agree that the costs are extreme, and from experience I now take these items with me (some airlines give you free extra hold luggage for prams & seats etc).

I used Avis this summer and their onsite service and cars were great (Faro airport). They weren't the cheapest, nor the most expensive, but I've found that saving a few pounds isn't worth getting an unsafe car.

about 4 years ago

Graham Charlton

Graham Charlton, Editor in Chief at ClickZ Global

I wouldn't expect anything to be free, but it's not unreasonable to want some information on how much you can expect to pay once you get there.

Strangely, some sites couldn't guarantee a car seat on arrival, which is nuts, since these things are absolute essentials.

about 4 years ago

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chris

Great article, very informative for sure. However, I do disagree a little on a couple topics.

1. "There are extras around car hire beyond the daily rental charges. These include collision damage waivers, child seats, additional drivers, and fuel charges."
- The option of purchasing Damage Waiver is required by law. The profits rental companies make on this is low, it's not the majority of their profits at all.
- Prepaid fuel charges are NOT required. Yes, a renter may not be using the whole tank of gas, but I believe this option is geared more towards a traveler that isn't concerned as much about costs as much as they are about convenience. You pay for convenience. I checked the Avis website, the only fee that is not clearly set is the Fuel option. But it clearly states that you are purchasing a full tank of gas in advance.
- As for child seats and additional drivers, why would a consumer NOT have to pay this? These are FOR-PROFIT companies. Again, all of the charges are states on the website - no hidden costs.

2-"So, while some are more upfront than others, there is a lack of clarity around charges which really should be addressed. For example, why is it not possible to pay for additional cover before booking?"
- In essence, rental contracts are open-ended (usually up to 30 days), You may keep the rental for a shorter or longer period of time. You'd be trying to pay for something before they know the total cost.

While I do agree that a couple of sales tactics could be misleading, most are not. I don't necessarily agree in the lack of transparency here - I see more of a lack of fact-finding on this particular bloggers part. I'm still trying to find these "hidden costs" on these sites. I believe it's unfair that these rental companies are being labels as "sneaky" when most of the info is written in black and white.

about 4 years ago

Graham Charlton

Graham Charlton, Editor in Chief at ClickZ Global

@Chris thanks -I'll answer your points:

1. Perhaps Damage Waiver is the wrong term - I was referring to the additional cover you can opt for to reduce the excess. The cost of this was not shown on the site.

Also, I was not naive enough to expect a child seat for free. I was originally quoted 3 Euros per day and the actual cost was higher.

When I booked prepaid fuel was required, and I was charged well over the market rate for the fuel. If this isn't a hidden cost, I don't know what is.

On the Avis site, for instance, you have to hunt through FAQs and t&cs to find anything at all out about fuel charges. This should be shown and linked to more clearly during the purchase process.

2. My rental contract was for a fixed period. There's no reason why a price for the period couldn't be calculated and shown to customers.

Even if the rental was open-ended, surely a cost per day could be shown, then customers would know how much they would pay.

I think, while it varies between rental firms, and some are more transparent than others, it is very difficult to get a clear picture of how much you will pay, and many customers arrive at the local pick up counter liable to pay more than they might have expected.

The result is customers paying more than they expected, feeling ripped off, and less likely to use that firm again.

For companies, especially in the Internet age, this is short-sighted thinking. There is no reason why they couldn't be more transparent about charges, and my experience of being ripped off for fuel leads me to wonder whether it's all about extracting as much money from customers as possible.

about 4 years ago

John Sinke

John Sinke, Assistant Vice President Digital Marketing & e-Commerce at Resorts World Sentosa

Based on my own experience I agree that car rental companies could be a lot more transparent when it comes to pre-rental and post-rental charges. It is a market that is screaming for a "consumer champion" that values transparency and trustworthiness. Until then:
1. Always return the car back with a full tank (as long as the car rental company has a full-to-full policy)
2. Take out car hire insurance with a third party to cover the excess (companies like Questor Insurance charge only a fraction of what the car rental companies would charge you). Happy motoring!

about 4 years ago

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Innes

I think that like with so many other forms of advertising there is always the small print which is always overlooked. It is however quite a cut throat industry so this does not surprise me to read any of this.

about 4 years ago

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Julian Peterson

How true, car hire is the one last remaining industry where the final bill has no resemblance to the confirmed online price.

about 4 years ago

Barney Larkin

Barney Larkin, Marketing Director at FusePump (WPP)

The actual problem here is that people aren't made aware of hidden costs. I don't think this is as a result of car hire companies being deliberately misleading, more that they have problems presenting the relevant data in a coherent and straightforward way to online clients. When a 'product' has many variables or component parts, as it does in car hire, holiday packages etc then it's difficult to display this data without confusing a customer. The best way to achieve this and display all the relevant options associated with the total price 'package' is by using API's and data feeds. This allows a customer to simply select extras and arrive at a completely up to date and accurate final package. It also gives them choice and utility eg return car with full tank (select x) or not (select y) the price changes accordingly. Although not related to car hire, we've achieved the same thing for Sky in dynamic advertising recently where a customer can shape their own product package (price) based on component parts.

about 4 years ago

Patrick Mulder

Patrick Mulder, ceo at AdFiliate bv

As I agree with your article it does appear to me a little as a personal story more then a in-depth analysis for which I love Econsultancy.

What if al the carrental companies and broker don't mind about communicating this. The next time you don't go to Hertz you might go to Alamo or Sixt. What is they have the same (lack of) information? I would not help you. We see the same situation in flight and low-cost carriers. Here the goverment took some action to change the situation of advertising with a flight for EUR.1 and getting 40euro extra costs.

about 4 years ago

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Verity

I had that for the first time in Malaga this year with Malaga Car (who used to have a fair fuel policy) and they didn't say a thing til we got to the desk and charged €80 for a full tank regardless of use. We'd planned a big road trip but would've done one anyway given we were paying regardless.

I figured it was a reaction to their economic climate as an easy way to make more money (if short lived as we won't use them again). When we got the car they gave a printed slip saying 'the country is in crisis and car theft has increased'.

It's more understandable if explained that way, but doesn't make it acceptable (and they've still lost a customer).

I know this isn't happening everywhere as I've just booked another in France which specifies 'full to full', the fair way of topping up what you've used, though car hire companies generally fill me with dread as they seem so ready to grab every penny they can.

Maybe you're highlighting a gap in the market for the honest car hire company.

about 4 years ago

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Helen Young

Most of the problems with car hire stem from the fact that people are under pressure or in a rush when they get to the rental desk and sign up for things in a pressure situation. So it’s best to try and sort most things out before you actually travel so that you are less likely to get any nasty surprises.

In terms of fuel, it is important to research the options available to you during the process of booking your hire car in order to avoid paying surplus charges when returning the vehicle. The ‘full-to-full’ policy is the option least likely to result in any extra charges. This is where you pick up your car with a full tank of fuel and are required to bring it back with a full tank. Make sure you leave enough time before your flight home to fill up at a petrol station near to the rental point or you may be charged a hefty fee for topping up even a small amount of fuel.

Some suppliers however only offer a full-to-empty policy where the car is supplied with a full tank of fuel, paid for upon collection, and asked to be returned as empty as possible. If you are on a small holiday island for a few days you are likely to lose money on this kind of arrangement.

As brokers work with many local suppliers in hundreds of locations which all have varying policies, they are unable to display fuel charges before the hire vehicle has been selected; this also applies to comparison sites. It is advisable to thoroughly read the terms and conditions of your car hire as this will normally state the exact fuel policy of the supplier.

Car hire excess insurance can be another grey area for car hire customers, it might be thought of as yet another costly extra but if a policy isn’t purchased then customers can be liable to pay up to £2000 if the car is damaged or stolen. Excess insurance cover is available from a wide range of broker sites
and external insurance providers, costing significantly less than the rental provider itself while providing more comprehensive cover. However it is vital that customers are aware that a deposit on a credit card is required on the pick-up of any hire car and this also applies to policies bought from external providers. If arriving at the pick-up location without the necessary funds, customers can have a shock as they will be required to purchase the rental desk policy if they want to continue with their car hire.

The cost of most extras like child seats and snow chains are usually clearly shown on the rental company website so you just need to make a note of them when you book and make sure it’s the same on the invoice when you get there.

It’s tempting to just book the bare minimum and think you’ll decide on the day about the extras but it really does pay to sort these things out online when you are not in a rush so you get the best possible deal.

Helen Young
Marketing Manager
Carrentals.co.uk

about 4 years ago

Graham Charlton

Graham Charlton, Editor in Chief at ClickZ Global

@Patrick I admit, it was inspired by my frustration at the extra charges I had to pay at the desk, but I do think it's a point worth making and, having looked around the web, I found plenty of other customers who had similar experience.

I could have analysed each site in depth, but I felt three was enough. I did look at several more, and their approach was broadly the same as Avis, Hertz and Europcar.

The ubiquity of web forums, review sites and social media in general means that bad experiences are more and more likely to be shared with friends and contacts.

I think firms that want long-term success need to focus on customer retention, and they have to provide the best possible experience - one which leaves the customer wanting to use them again. Part of this is being transparent about costs.

As Verity says, I am highlighting a gap in the market for a 'honest' and upfront car hire site.

Btw - if one exists, let me know and I'll use them next time.

about 4 years ago

Barney Larkin

Barney Larkin, Marketing Director at FusePump (WPP)

It's got nothing to do with honesty and everything to do with functionality and HOW you present the consumer with the right options! Costs can be made transparent by making sure that you have accurate and up to date data. As you've said, the first couple that actually harness their data and make it 'up front' will make great headway in the market...

Right, I'm off to hire a car for the weekend!

about 4 years ago

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Richard

Yes, I am affiliated with a rental car company.
Want this known upfront. As a consumer, I certainly see the argument made, and of course would love to know the final cost of anything I seek to rent or purchase during my decision making process. Realistically however, I understand why this cannot always be done.

Unfortunately there are too many variables with options, so it is not as cut and dry as you make it sound. Most car rental companies offer 3 or 4 refueling options. The best approach is to assume you will be willing to replace the fuel you used at a local filling station, just as you would , you can choose another refueling option if you are happy with one offered at the time of rental. Fuel rates change too frequently to give axact quotes, and at the time of reservation, it is not yet know what vehicle will be assigned. Each vehicle has different size tanks. With damage coverages and liability, the same holds true. There are mutliple products and options in most cases. The prices vary by state, by city, and often by location within a city. Most car rental web sites give a range of daily prices for the coverages they sell.

I know this sounds sarcastic, and it is not meant to be. However, when I go to buy butter at the grocery store, and the clerk asks if I need stamps, or ice (most do in our area)and I say yes, I must be prepared to pay the price if agreeing to the purchase. I can always say no, even if a really need ice or stamps. I don't complain because I did not know the price of the ice and stamps prior to my arrival.

Vehicles need fuel. Anyone renting a car should realize they will be responsible for the fuel they use. The price of "optional" methods of refueling is offered at the counter and may be accepted or declined. If the rate per gallon charged for failing to refuel before returning is too high, who's fault is it that they are in a position of having to pay it to begin with? Yes, the renter for not replacing the fuel that they used.

I think my point is made ...agree or disagree.
Renters (consumers in general) need to read terms and conditions. I am not fond of small orint anymore than the rest of you, but there is a diffence between "scams"/"fleecing" and
showing the legitimate prices before options.

about 4 years ago

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Hilary

I had such a bad experience at Palma airport this summer that I ended up being transported back to the terminal via the car hire companies shuttle service and doing without a car for the week. It wasn't idea as had to travel to locations public transport take you to all the time but was asked for a £400 deposit which had not been previously outlined in the booking terms and conditions and I just did not have £400. When I called a friend in England to use her credit card number with the car hire rep hearing the grateful and expensive conversation he then announced I couldn't use her card as it wasn't mine - watch out for Argus Car Hire and the cowboys they collaborate with.

about 4 years ago

Graham Charlton

Graham Charlton, Editor in Chief at ClickZ Global

@Richard I agree that it's very difficult to show up to date fuel prices, but there should be clarity about the refuelling options on offer. The customer should have the choice, or should know exactly what the terms are before they buy online.

In the sites I looked at, very few made this clear.

The 'full to empty' policy which I had imposed on me seems to be a way for rental firms to squeeze more money out of customers. As I stated in the article, I was charged well over the market rate for fuel.

In addition, if people aren't planning to do that much driving, a full tank is unnecessary.

about 4 years ago

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Nichole

We recently had to rent a car from Enterprise while our windshield was being replaced. We put down a $100 deposit and paid for a week upfront. When we returned the car, we did not receive our deposit back. They said it covered the insurance costs... When we rented the car we were under the impression everything was included in the price and the deposit was just that...a deposit. Meaning refundable. I think we got scammed. Why can't companies be more upfront and honest?

about 4 years ago

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Amanda Yeates

Sadly just seen this article and wished I had read it before returning from my holiday feeling ripped off from the car hire company. Thought we covered all the options but no, forced to pay 100 euros for full tank (we knew we wouldn't use half that)and an extra 100 euros for excess protection we didn't want. The latter was because although we had a credit card with us we couldn't remember the PIN no and they refused to accept a debit card.

Thanks for the tips I will use a company which is much clearer on costs in future and not necessarily the seemingly cheap one.

about 4 years ago

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Shaun Malvin, Managing Duirector at MalvinShaun BizCom Solutions

Awesome Article. You managed to capture everything that is wrong with the car rental industry. As a regular traveler I am always wanting the best car rental solution and I finally found it. Perfect Car Rental in Johannesburg and Durban, South Africa has managed to secure me as a life long customer. Because they are one of the only car rental companies that live up to and exceed their promises made on their website.

With their No Credit Card Rental, I have complete control over my car rental budget and there are no nasty surprises billed to my credit card after I return the car, plus my deposit is usually refunded back into my bank account before I reach home...this is excellent service in m y books. From their warm and friendly boking agents to their drivers and Managers they always put the client first in ensuring that everything is fully explained and understood before the rental...very transparent

Their cars are absolutely wonderful with all being brand new cars, plus their pricing is out of this world, I paid R700 per day for a 2013 BMW 3-series with unlimited mileage, that is a real cost saver when you're running around for business meetings.

All in all, if you want a Car Rental Company that can deliver on its promise and with no hidden charges, then Perfect Car Rental is for you.

visit them at www.perfectcarrental.co.za

about 3 years ago

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Imre Balla, owner at City For All Seasons Ltd.

Superb information posted on car rental services, I was in a planning stage to rent a Car at Faro Airport and glad read this article that created such great amount of alertness of such an important topic of charges.

about 2 years ago

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Landy Solway, none at none

Many people think that looking for a dream wedding car and hiring it is a difficult task to accomplish. But with the help of the leading car hire portal today in Australia, ItsHired.com.au. Aside from using the “Quick Search” form, you can check out the various members of the community where you can find the wedding or classic car you want to hire. Click this link: https://www.itshired.com.au/

over 1 year ago

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Asif Ameer, Designer at asifameer

Well i went to Dubai on my last vacations, and trust me its a wonderfull place with Hollywood celebrity life style and i wanted to ride on Limo and someone gave me Private Limousine www.prvtlimousine.com

Best cheap and professional car rental service provider

over 1 year ago

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Chandra Moulli, Cheap Car Rentals & Rental Car Deals at travelauto.com

Great article. And I am agree with the condition car rental websites being upfront about costs. Due to this we will be safer from the problem with hidden charges of car rental agencies.

over 1 year ago

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