Renting a Car: What You Need to Know

Sometimes, renting a car means standing in long lines, discovering that the car you reserved isn't available, and learning that the fee quoted doesn't include additional charges such as insurance, coverage for more than one driver, and refueling fees.

You can reduce the number of times you encounter problems at the rental counter by learning about your rights when renting a car and following several tips.

Your Rights When You Reserve a Rental Car

If you've reserved a car, but the company doesn't have the car you reserved available for you when you arrive, the company must do everything it can to find you a different car from its fleet—if you arrive on time for your reservation. If the only available car is more expensive, you don't have to pay the higher rate. If no car is available, you can rent from another company or take a taxi and then seek reimbursement for your extra costs from the original car rental company.

Rental Rates and Fees

Rental car companies charge rental fees as well as many other special fees and charges. Here's the low-down:

Rental rates. Rental car companies usually charge rental rates per day. The rate might include unlimited mileage, or the company might charge per mile for each mile over a certain limit. Many companies offer lower rates for weekend or week-long rentals. Rentals at locations other than airports are usually cheaper. Also, members of organizations such as the American Automobile Association (AAA) often can get discounted rates.

Other fees and charges. Most car rental companies tack on a number of additional fees and charges. They must notify you of these fees before you sign the rental agreement. Here are the fees you're most likely to encounter:

• Fees for renting at an airport. Airports and local governments often add surcharges and taxes to rental car rates.
• Additional driver fees. Most rental car companies charge extra for anyone who drives the car other than the person who signs the rental agreement.
• Young driver fees. Many rental car companies add a daily surcharge for any driver aged 21 to 24.
• Extra feature fees. You'll often pay extra for things like a GPS system, infant and child seat rentals, or the ability to pay tolls electronically (the fee doesn't include the toll).
• Vehicle drop-off fees. Many rental car companies charge higher rates for dropping off a car at a location other than where you rented.
• Refueling charges. Most companies require you to return the rental car with a full tank of gas. If you don't, you'll be forced to pay the company's highly inflated gas prices.

Rental Car Insurance and Loss Damage Waiver

Rental car companies will ask if you want to pay extra for car insurance. You don't have to buy this insurance. To determine if you should buy extra rental insurance, check all of the following to see if they provide insurance coverage for a rental car:

• your own car insurance
• your employer's insurance, if you're traveling on business, and
• your credit cards—many cards provide insurance for the rental car if you charge the rental fee on your card. (Keep in mind that limitations might apply to any of these types of coverage.)

If you want to buy insurance from the rental company, it will most likely be called loss damage waiver (LDW), also known as collision damage waiver (CDW). Many consumer protection organizations complain that LDW is expensive and has many loopholes. That means that the company can charge you for certain damage even if you've bought LDW. For example, bodily injuries or damage that was caused intentionally or recklessly are usually not covered. Still, if you're not comfortable about your existing coverage, buying the extra insurance might be worth it.

Other types of offered insurance typically include:

• Supplemental liability protection. This kind of insurance covers costs to others in an accident you cause in the rental. (Keep in mind your existing auto insurance policy probably already covers you.)
• Personal accident insurance. This kind of insurance pays for injuries or death of the driver and passengers of your rental car.
• Personal effects coverage. This kind of insurance reimburses you if your personal items are stolen.

To learn basic information about car insurance, see What are the Different Types of Car Insurance?