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So you think you've gotten a great deal on your rental car -- but unfortunately, netting that fabulous $19.99-a-day rate doesn't guarantee you a cheap rental. Instead, you may find the price skyrocketing as your bill is rung up at the rental counter. Sales taxes, airport surcharges, insurance, licensing fees -- by the time all the extra charges are added onto your bill, you may find yourself suffering a severe case of sticker shock -- and paying almost double that seductive base rate.
In a spring 2005 study, Travelocity found that major American airports tacked on an average of 25.8 percent to your total bill (up from 24.4 percent in 2003) in local and state taxes. However, that percentage can be much higher; the worst offender is Houston's George Bush Intercontinental Airport, where the average total bill is 66.1 percent higher than the base price.
In Europe, where many countries charge even higher taxes, the sticker shock can be even worse. On a trip to Italy several years ago, I rented a car with a base rate around $110 for three days. The final total? Including insurance, mandatory theft protection, a 20 percent tax, an underage driver fee, a surcharge for not filling the gas tank, and a few other "mystery" charges written on our bill in illegible Italian, I paid about $380 -- more than a 200 percent increase over the base rate. Ouch.
So how can you avoid being nickel and dimed to death? Read on for a roundup of the surcharges you're most likely to face, and tips for how cut costs on your next trip to the car rental counter.
Taxes and Airport Surcharges
Sales tax and airport charges vary considerably from state to state and from country to country. Unfortunately, you probably can't avoid state and local sales taxes -- or the European equivalent, the value-added tax (VAT), which can be as high as 25 percent. (Note that in some countries you may be entitled to a partial refund of the VAT.) Many local governments also charge fees to fund local development projects, such as convention centers or sports stadiums.
However, you may be able to avoid the airport charges -- such as concession recovery fees, customer facility charges and the like -- by picking up and dropping off your car at an off-airport location. Be sure to weigh the possible inconvenience and the price of any additional transportation against the concession fees charged by the airport location -- which can total 10 percent or more of your total price.
Editor's Note: We recently got an email from a reader wondering whether the airport concession fee could be avoided by not picking up your rental car as soon as you get off the plane. If the reader went to his hotel first and then returned to a rental location near the airport to pick up his car, would he still have to pay the fee?
According to Neil Abrams, founder of Abrams Consulting, a car rental consulting and travel market research organization, the answer is yes. "If the rental location is at the airport, the rental agency is contractually required to pay the concession fee to the airport," Abrams says -- no matter whether the renter is a local or has just flown into town that day. The same generally applies to near-airport rental locations, though he notes that the fees and requirements for these properties may vary from airport to airport.
The bottom line? If you don't want to pay the airport concession fee, check out your rental options downtown.
Insurance
One of the most common extra charges is for insurance, usually referred to by rental companies as collision damage or Loss Damage Waiver (LDW). For an extra $10 - $25 a day, you can avoid liability for any damage to the vehicle, provided you're not found guilty of gross negligence. Insurance is optional in most states, although in a few states it is compulsory and built into the basic car rental cost.
Before you purchase the extra insurance, check to see if your regular car insurance covers you in a rental car. Most policies do. Some credit cards also provide insurance; check with your company to find out. Other optional insurance coverages include Personal Accident Insurance (PAI), Personal Effects Coverage (PEC) and Additional Liability Insurance (ALI), which you can purchase from the rental company. Again, your best bet is to check your existing policy to see whether you're comfortable with the coverage you already have.
Gasoline Charges
You will often pay a high premium for returning a car with an empty tank, so in most cases you'll want to fill up before you return your vehicle. However, many car rental companies, including Hertz and Avis, now offer the option of purchasing a full tank of gas when you first take the car, enabling you to return the car with as much or as little fuel as you wish. (Note that there is no refund for unused fuel, so you'll likely be paying a little extra for the convenience of skipping the trip to the gas station.)
In a spring 2005 study, Travelocity found that major American airports tacked on an average of 25.8 percent to your total bill (up from 24.4 percent in 2003) in local and state taxes. However, that percentage can be much higher; the worst offender is Houston's George Bush Intercontinental Airport, where the average total bill is 66.1 percent higher than the base price.
In Europe, where many countries charge even higher taxes, the sticker shock can be even worse. On a trip to Italy several years ago, I rented a car with a base rate around $110 for three days. The final total? Including insurance, mandatory theft protection, a 20 percent tax, an underage driver fee, a surcharge for not filling the gas tank, and a few other "mystery" charges written on our bill in illegible Italian, I paid about $380 -- more than a 200 percent increase over the base rate. Ouch.
So how can you avoid being nickel and dimed to death? Read on for a roundup of the surcharges you're most likely to face, and tips for how cut costs on your next trip to the car rental counter.
Taxes and Airport Surcharges
Sales tax and airport charges vary considerably from state to state and from country to country. Unfortunately, you probably can't avoid state and local sales taxes -- or the European equivalent, the value-added tax (VAT), which can be as high as 25 percent. (Note that in some countries you may be entitled to a partial refund of the VAT.) Many local governments also charge fees to fund local development projects, such as convention centers or sports stadiums.
However, you may be able to avoid the airport charges -- such as concession recovery fees, customer facility charges and the like -- by picking up and dropping off your car at an off-airport location. Be sure to weigh the possible inconvenience and the price of any additional transportation against the concession fees charged by the airport location -- which can total 10 percent or more of your total price.
Editor's Note: We recently got an email from a reader wondering whether the airport concession fee could be avoided by not picking up your rental car as soon as you get off the plane. If the reader went to his hotel first and then returned to a rental location near the airport to pick up his car, would he still have to pay the fee?
According to Neil Abrams, founder of Abrams Consulting, a car rental consulting and travel market research organization, the answer is yes. "If the rental location is at the airport, the rental agency is contractually required to pay the concession fee to the airport," Abrams says -- no matter whether the renter is a local or has just flown into town that day. The same generally applies to near-airport rental locations, though he notes that the fees and requirements for these properties may vary from airport to airport.
The bottom line? If you don't want to pay the airport concession fee, check out your rental options downtown.
Insurance
One of the most common extra charges is for insurance, usually referred to by rental companies as collision damage or Loss Damage Waiver (LDW). For an extra $10 - $25 a day, you can avoid liability for any damage to the vehicle, provided you're not found guilty of gross negligence. Insurance is optional in most states, although in a few states it is compulsory and built into the basic car rental cost.
Before you purchase the extra insurance, check to see if your regular car insurance covers you in a rental car. Most policies do. Some credit cards also provide insurance; check with your company to find out. Other optional insurance coverages include Personal Accident Insurance (PAI), Personal Effects Coverage (PEC) and Additional Liability Insurance (ALI), which you can purchase from the rental company. Again, your best bet is to check your existing policy to see whether you're comfortable with the coverage you already have.
Gasoline Charges
You will often pay a high premium for returning a car with an empty tank, so in most cases you'll want to fill up before you return your vehicle. However, many car rental companies, including Hertz and Avis, now offer the option of purchasing a full tank of gas when you first take the car, enabling you to return the car with as much or as little fuel as you wish. (Note that there is no refund for unused fuel, so you'll likely be paying a little extra for the convenience of skipping the trip to the gas station.)
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