Renting a Car 101
Renting a car is often a necessity, even for people who own one. There are many reasons why consumers wind up at the rental counter: vacations, business trips, a car to take the kids to camp, a replacement vehicle while our own cars are in the shop. Yet despite the fact that renting a car is a common experience, the transaction itself can be very confusing. This is not surprising given the long, complicated contract and the recent changes in the state laws regulating car rentals.
Some car rental companies use questionable tactics when negotiating or offering rental contracts, which can include last minute charges, or using intimidation and scare tactics to coerce consumers into buying things they do not need.
What you need to know BEFORE you sign a car rental contract
Beware of Add-On Charges
For example, there are a host of add-on charges presented to consumers at the counter, each with a cryptic name, often referred to simply by initials – SLP, PEC, PAI, CDW, PDW and more. Some unethical companies attempt to intimidate consumers into buying extras they do not need. One of the most common “offers” is the collision damage waivers, which release drivers from charges for damage which may occur to the automobile. We've provided a helpful explanation for each of these below.
Collision Damage Waiver (CDW) - Before you purchase CDW, find out what your car insurance policy covers. For a daily fee of about $9, for cars costing less than $30,000 (or more for more expensive cars), the car rental company will waive all or part of its cost if the rental car is damaged or stolen, provided the car is not driven by an unauthorized driver, driven recklessly, or the coverage is voided for several other reasons. The waiver may exclude instances where a car is stolen, tire damage, or drivers who have taken drugs, even when the drug is nothing more than over-the-counter cold or headache medicine. While this coverage may make sense for some renters, you should be aware that most car insurance policies already already provide coverage for a rental vehicle, unless you declined to accept it when you purchased that policy. In addition, most major credit cards already provide this coverage, with certain limitations, but only as a benefit of using the credit card to rent the car. Note: CDW is also known as Loss Damage Waiver (LDW) or Physical Damage Waiver (PDW).
Supplemental Liability Protection (SLP) - Also known as Liability Insurance Supplement (LIS) or Supplemental Liability Insurance (SLI). For a fee of approximately $10.95 per day, the car rental company will supplement the liability insurance that the company must, by most state laws, provide. This required coverage typically consists of the same minimum levels of liability insurance which all vehicle owners. For many renters who have modest amounts of assets, the minimum coverage the car rental companies must provide as a part of the rental may be enough to protect them from lawsuits by victims of accidents involving the rental car. If you have your own car insurance policy with coverage above the minimum amounts, your policy should cover you when you operate a rental vehicle, so SLP is likely not needed. However, SLP usually provides $1 million of liability protection, considerably more coverage than most consumers have under their own car insurance policies. So if there is a reason that you want more coverage for the rental than you ordinarily carry for your own car, or you do not have an automobile insurance policy, buying the SLP may make sense.
Personal Effects Coverage (PEC) - This coverage, which typically costs $2 per day, usually provides $500 per person of insurance coverage, with a $1,500 maximum, for theft of personal effects of the renter and his or her family. Remember that this coverage may duplicate coverage the renter already has through a homeowner’s or tenant’s policy, although the coverage usually pays in addition to that other insurance. This means that your personal policy will typically pay first, and PEC will only pay when your policy limits are reached.
Personal Accident Insurance (PAI) - This coverage, usually costing about $3 per day, provides medical, ambulance and death benefits for the renter and passengers of the rental car in the event of an accident. The medical coverage is usually around $3,500 and the ambulance benefit $150. Typically the death benefit is $175,000 for the renter and $17,500 for the passenger. Many of these benefits duplicate coverage you may already have under your health, life or automobile insurance policies, or duplicate coverage that the car rental company must provide under state laws.
Regarding Rental Rates
ALWAYS Fill Up the Gas Tank Before you Return the car
Many car rental companies give drivers a full tank of gas and ask that you return it with a full tank. Make sure you fill it up before returning the car, as the rental agency will charge you at least double the market price for a gallon of gas.
Watch the clock
You will be told to return your car by a certain time in order to avoid late charges. Make sure to keep a close eye on the time, because keeping a car a few hours past the deadline can subject you to being charged for an entire extra day, and possibly at a higher rate than the one for which you signed up.
Before you pay to add an additional driver, check to be sure state laws. In New York for example, rental car companies must allow spouses over the age of 18 as an additional driver at no extra charge.