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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.
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 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.
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.