This summer, holidaymakers face huge excess bills when hiring a car abroad. A recent article published by the Daily Mail has revealed that in a study the average excess charge in European destinations is £1,095. The figure represents an increase of £108 on the average excess charge three years ago. The findings indicate some car hire firms have increased their prices by over forty percent in just one year. The sharp rise in excess charges can be attributed to a reduction in basic rental fees as a result of comparison websites, coupled with an over-inflation of excess charges in compensation for this. The study examined the excess charges of the rental firms Avis, Budget, Enterprise, Europcar, Hertz and Sixt. It investigated the maximum excess charges for damage and/or theft on car hire in Spain, Greece, Portugal and France during peak summer holiday season.
The maximum excess was found to be £2,188 for the hire of a VW Golf from Budget at Faro Airport, Portugal, during the first week of August. Last summer, Budget’s excess charge on the same vehicle from the same location was £1,538, which is a rise of £650. The Avis charge on the same car at the same airport rose £504 to £1,779 this summer. While the Avis excess on a VW Golf in the first week of August at Nice, France is a little lower at £1,101, the charge has increased £800 since last year.
Perhaps understandably, excess charges vary drastically depending on the week of the year and the destination. This is because the likelihood of accidents varies depending on the location and time of year. In fact, car rental companies haven’t only applied increases to their excess charges this summer. Avis and Budget actually reduced their excess charges on VW Golf rental in Spain and Greece this August. In Barcelona, Avis’ charge fell £214 to £1,186. Budget reduced its cost in Crete by £161 to £946. Overall though, the study demonstrates a sharp rise in the average excess price on holiday car hire.
#MARTINLEWIS Booked hire car through Ryanair, took their excess cover, got stung for another €149 insurance and €120 fuel deposit…scammed.
— Barney Rubble (@BarneyRummbled) June 20, 2017
Reasons for the rise
The sharp rise in holiday car rental excess charges can be attributed to two main factors that are intrinsically linked. The first is that comparison websites have driven baseline prices right down. The second is that car hire firms have over-inflated their excess waiver insurance prices to regain profits. Excess waiver insurance bought via car rental companies can be up to fourteen times more expensive than through specialist insurance providers. According to Martyn James, a consumer rights expert and spokesman for the complaints website, Resolver, there’s no reason for these companies to pass such costs onto the consumer. James states: ‘I’ve seen examples of unscrupulous hire companies hitting drivers with massive bills for replacing bumpers where a minor scratch occurred.’ Therefore rather than merely compensating for the reduction in basic car hire rates, many rental firms are greedily striving to boost profits even more.
Excess waiver insurance
Shocked by steep excess charges and facing pressure from car hire firms at the registration desk, a lot of consumers wisely decide to take out excess waiver insurance. However, often agreed directly via the rental company, premiums are sky-high and can be limited in scope. Rupert Jones of The Guardian reported in June 2017 that car hire add-ons including excess waiver insurance can more than double the final cost. According to the article, Jones revealed that although the average basic rental price is £301, this rises to £626 when all the extras are added on.
Just on the phone to Europcar , they quoted me 50 quid to have no excess on the hire car when I visited Scotland , then charged me 75 quid!
— Carol Buck (@caroltaff) July 6, 2017
Real-life rental rip-offs
In a report last summer by The Telegraph, reporter James Foxall revealed that one consumer was billed for two missing seats. The holidaymaker had hired a seven-seater VW Touran and all seven seats were occupied when the family returned the vehicle. When the consumer asked for the CCTV footage to prove this, his request was ignored and he was charged nearly £1,900.
Daily Mail reporter, Ruth Lythe, investigated car hire rip-offs in Spain last July. Lythe highlighted issues including unreasonable excess charges. Although she was fortunate enough to avoid any damage claims on her rental vehicles, Lythe did witness a young couple returning their hire car. The holidaymakers were told that there were new scratches on the vehicle. The couple produced dated photographs that showed the scratches were present at the time of hire, and because of this, they were not charged for the damage. This case highlights the importance of consumer diligence when renting a car abroad.
Five ways to avoid being ripped off by car rental companies
1.Buy excess insurance in advance from a third party provider.
Car rental companies have a reputation of pressuring customers into buying expensive car hire excess insurance as an add on to their existing policy so that they avoid the risk of paying the huge excess fee faced if they were to damage their rented vehicle. One of the top tips to avoid being ripped off by car rental companies is buying car hire excess insurance in advance from a third party provider before reaching the rental desk. According to the Daily Mail, buying from a third party provider could cost you as little as £2.99 a day opposed to £170 for the week via the rental company.
2.Only buy the basic rental package
Child booster seats add £50 to £100 to your weekly rental cost, while satnav adds up to £72. If required, take your own booster seats and satnav. Taking booster seats on the plane is free with some airlines and has a charge of around £20 return with others. If possible, stick to one driver as a second driver costs an average of £48 extra per week. By avoiding add-ons like these and sticking to the basic rental package you’ll be keeping the cost to a minimum.
3. Check and photograph the car meticulously
According to a YouGov survey commissioned by iCarhireinsurance.com in January 2017, thirty-five percent of consumers found damage on their hire vehicle that was not included on the registration paperwork. Check the entire car, including hidden parts like the spare tyre, and ensure all scrapes and bumps are recorded in the rental agreement. Test the clutch by putting the car in fourth gear, pressing the clutch and releasing it slowly whilst keeping the accelerator depressed. If the car doesn’t stall, the clutch is on its way out so ask for a different vehicle. Note down the mileage and the level of the fuel tank. Take photos and videos as proof of the vehicle’s condition at the point of hire.
4.Always get the car checked back in
Sometimes car hire firms will try to avoid a complete check-in on return of the vehicle. If they state there is no one available, say you are willing to wait. If the car is not checked in properly, you could be stung with excess charges for damage that was not caused during your rental period. Retain the paperwork after your holiday.
5.Retain the paperwork after your holiday
It is important to keep your rental agreement for around a month after your holiday, even if there were no accidents during your trip. You should also monitor the bank account or credit card account used for the hire. This is to ensure any refunds are processed and to spot any unexpected extra charges.
For those that have already fallen victim to the excess insurance trap, we’d certainly like to hear your stories. Share your experiences in the short survey below, so we can find out just how common this outrageous scam is.