The Brancatelli File



March 1, 1997 --Travelers visiting Florida this winter could rent an economy car for an advertised price of just $89 a week. That was not only a great deal--at $12.71 a day, a car cost less to rent than a home carpet-cleaning machine--but also a historical miracle: Rentals cost $64 a week in Florida in 1974, meaning prices have risen only $1.08 annually during the last 23 years.

Of course, any traveler who's ever rented a car knows the truth behind that $89 miracle: No one ever pays the advertised price. After car-rental firms add their secret charges, counter clerks sell you their costly insurance packages, and governments collect their taxes renting a car usually costs two or three times the advertised price.

A ROTTEN SYSTEM "People expecting to pay $100 to rent a car by and large end up paying $300," says Michael Wellner, president of Kemwel Holiday Autos, a European rental firm that recently entered the U.S. market. "It's a rotten system. Travelers hate it and I don't blame them."

Why is the real price of a rental car always buried beneath a nearly incomprehensible maze of extras and hidden fees? Competition and cowardice.

There are literally hundreds of firms vying for your car-rental business. They can't compete by offering different products--after all, a Ford or a Chevy is the same no matter where you rent it--so they fight on price. Yet the low-rate gambit is fiscally perilous: The prices rental firms pay for cars, labor, repairs and insurance are all skyrocketing. But rather than raise their advertised rates to cover their costs, rental firms hide the increases in a bewildering schedule of unadvertised extra charges.

How can you keep your domestic rental costs under control? Take the following defensive steps:

WAVE OFF THE WAIVER CDW (collision-damage waiver) or LDW (loss-damage waiver) are optional waivers that release you from the cost of repairing a rented car if you crash it. The waiver can add $15 a day or more to your rental rate, so just say "No" when a rental clerk tries to sell you one. For starters, waivers are rapaciously priced. At $15 a day, they cost the equivalent of $5,475 a year! Second, you may already have a free waiver. Many gold Visa and MasterCards, and some American Express cards, offer a serviceable waiver if you charge your rental to the card. (Ask your card issuer for details.) Besides, many car owners have a car-rental waiver as part of their personal auto insurance. Check your policy; if it doesn't have a standard rental waiver, buy it as an option. It will cost less than $50 and cover you for a full year of rentals.

DON'T BUY INSURANCE Rental firms jack up the cost of a rental by selling you lots of optional insurance: supplemental liability; personal accident and personal effects; even emergency sickness. At $8 or $9 a day each, all these policies are egregiously overpriced, and, like CDW and LDW, you don't need them. Your personal auto insurance (and, sometimes, your homeowner's policy) almost always covers these contingencies.

GO ELSEWHERE FOR GAS Rental firms have turned their refueling service into a profit center. At some rental locations, you will be charged upwards of $4 a gallon. Avoid this rip-off by refilling the tank elsewhere before you return the car.

BEWARE THE FEES Rental firms have a maddeningly long list of special fees and restrictions. Some charge extra if more than one driver is listed on the rental contract; others impose a surcharge if you are too young (under 25) or too old (over 70). Many charge a fee if you do not return your car to the same rental location where you picked it up. Ask about these possible extra charges before you make reservations.

FOLLOW THE RULES Weekly and weekend rates are almost always a rental firm's best bargains. But be careful: Multiple-day rates are subject to onerous "length of rental" restrictions. Keep the car for longer than the rate permits, and you'll be charged inflated prices for each additional hour or day. And make sure you know the "minimum keep" time for a weekend or weekly rate. If you don't keep the car long enough, your multiple-day rate won't apply and the rental firm will charge you a sky-high daily rate instead.

KNOW THE TAXES The tax bite on car rentals is huge. In some cities, rental taxes and user fees effectively top the 20 percent mark. This isn't the fault of the rental firms, of course, but they aren't particularly forthcoming about tax rates, either. Make sure to ask about applicable taxes when you reserve your car.

DO YOUR HOMEWORK Knowledge is your best defense against the car-rental industry's game of extras, so tap into the rental firms' Web sites. These sites contain detailed, practical information about the firm's rental policies, taxes, rates, fees and insurance.

This column originally appeared in Frommer's Travel Update.

Copyright 1993-2005 by Joe Brancatelli. All rights reserved.