Avoiding Rental Contract Tricks Abroad

Renting a car outside the United States can be a lot different than renting one within it. There are plenty of pitfalls that can trip you up and cost you extra. I just rented a car from a small, local company in Budapest and there were even more traps than usual. So, although the last thing that you may want to do after a long international flight is sit down and read the tiny print of a rental contract, it pays to go through it.

First, when you rent a car abroad, all of the normal stuff that you need to watch out for in the US applies. Be sure that you inspect the car for damage before you get in and drive off. Don’t believe anything the rental agent says about the damage not mattering–be sure that it’s carefully noted on the rental form. Also don’t be afraid to take a quick photo of the agent with the car, especially if there is visible damage. This will go a long way towards ensuring there are not arguments later.

Other things to watch out for are insurance scams and additional driver charges. Unless you rent with a rate that includes multiple drivers, you will probably have to pay extra for each driver. And then there’s insurance. It works differently abroad. In the European Union, Australia and New Zealand, all rental cars include both comprehensive and liability insurance. However, there is typically a 10% deductible and also an “excess,” which is an amount that you have to pay before any coverage kicks in. Many credit cards include insurance that will entirely cover any damages to the rental car, so you don’t need this coverage. However, this doesn’t typically stop rental car companies from trying to insinuate that the insurance is required, or that you will have problems using credit card insurance. There definitely can be insurance problems if you use a credit card, but these can be avoided by reviewing the coverage in advance. Note that all bets are off in Israel, Jamaica, Ireland and Northern Ireland where no credit cards offer coverage for rental cars.

However, some charges are out of left field. Have you ever taken a rental car to a car wash? Make sure that the contract doesn’t require it, and that there isn’t a car wash fee. In the contract, there was a 15 euro car wash fee, unless I washed the car myself! Since the car wasn’t actually clean when I rented it, I got the rental company to waive it, but I doubt they would have done so if I hadn’t asked up front. Additionally, there can be a border crossing fee. I needed to cross into Croatia from Hungary, and paid an additional 19 euro charge to do it. However, the vehicle was monitored via GPS, and if I hadn’t paid this, the rental car company would have fined me 150 euro as a penalty–and that charge is per border I crossed. In Europe, countries can be roughly the size of postage stamps, so this can add up in a hurry. Finally, there was an administration fee. If I had run up any tolls, traffic fines, or parking fines, these would all be individually billed with a 50 euro surcharge per item.

Read the fine print when you rent, and avoid nasty surcharges! There are few nice surprises when it comes to renting cars.

2 thoughts on “Avoiding Rental Contract Tricks Abroad

  1. Bern says:

    Just wanted to share my experience on renting a car with Hertz in Cancun on a recent trip 2 weeks ago.
    We reserved and booked the car reservation online, with a United points promo, so I thought I really had a great deal, thinking the car rental for 3 days only added up to something under $30 including taxes and fees.
    I read all the fine print, there was no terms stating anything out of the blue otherwise.

    Fast forward to arriving at our destination, everything went well, until we met the check in agent that is handling our rental. A seemingly painless check in process that is supposed to take 10-15 mins became an hour long nightmare. It all boils down to forcing us to buy the company’s ridiculously inflated insurance scam.
    I started off telling him, I do not need insurance as my AMEX plat will cover collision. He then tried to explain to me that the laws in the United States do not apply to those in Meixco. I stood firmly against his silly sales tactics, and that’s he decided to pull out the big guns. If we do not purchase their insurance, or rent without insurance policy by them, I need to put in a 30,000 pesos (a $1500 USD equivalent) as a deposit in case of any collision damage, as I was ready to pay the deposit, he added that there will be another liability insurance I need to pay, as well as additional driver insurance. At this point, my head is already spinning. I was so mad, looking back retrospectively, I should have walked out and gone into another car rental company. I gave him a hard time to make sure he have the available policies he mentioned printed out so I can read them.

    He took the next 20-30 mins panicking, as I can see his hands trembling to find all needed documents, claiming the internet was slow. In the end, he couldn’t print them out, but merely showed me some lame policy that a deposit was required at a undisclosed amount depending on the rental we made. Fed up, we just paid for the original insurance, amounting to about $50+ per day. He then “waived” the additional driver charge out of goodwill.

    Lesson learnt, in future, I’ll call my credit card regarding these rental coverage terms and educate myself better before renting abroad again.

    1. TProphet says:

      This is a common problem in Latin America, where (like everywhere) liability insurance is required. In Costa Rica it isn’t included at all, and every car rental requires it. You can’t drive off the lot without a liability insurance policy for the specific car you’re driving. In Mexico, there is minimum liability insurance required, but this doesn’t cover much (only about $8,000) and it’s a bad idea to drive with only this. If you get in a wreck in Mexico and it’s your fault, it isn’t unusual for the police to hold you in jail until you satisfy all financial claims the other party has against you.

      It’s a common misconception that credit card insurance provides liability coverage. In general, it doesn’t. It just covers damage to the car you’re renting.

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