The company-imposed fees are just as outrageous as the taxes. For example, the Hertz location across the street from me hits me up for a $2 "Security Fee" on every rental. The hell? Best Buy doesn't impose a surcharge for the guy checking receipts at the door...things like this, concession charges, tire disposal charges, battery disposal charges, etc., (I could go on and on) are part of the cost of doing business and should be included in the base rate.
As for the taxes, so many cities just regard visitors as geese to be fleeced as much as humanly possible.
At most rental companies, this is an emphatic "YES."
The profit margin on the "Collision Damage Waver" is stupendous. I once worked part-time (late '80s/early '90s) for a car rental company (that has long since disappeared), and not only did we get commissions on CDWs, as well as the other "coverages" they sold and upgrades, but if you didn't sell enough of them as a percentage of your total contracts, you got fired. An internal trainer told us flat-out that the company made no profit on actually renting cars (and in some cases actually lost money), but paid out an average of 65 cents a day against the (then) 9.95 CDW
. That's a 93.5% profit. We had weekly rates as low as $69/week, so on some rentals the CDW
came to more than the base rental. And if you didn't take it, we took a $300 reservation against the renter's credit line, which doesn't sound like much, but this was many years ago, and we were a company that aimed at the low end of the market. Every night, we had at least one renter (usually a family) leave with their vacation screwed up because either we took the $300, or they took the CDW
, which burned through a chunk of the credit line they were depending on too. Either way, they were screwed.
I got let go because my CDW
rate was right around zero. I could sell upgrades all day if I had cars to work with - because our target market was on the low end, we had broad discretion on upgrade prices, and it's fun giving people a nicer car at a big discount. But I couldn't justify the CDW
A lot of the reason why rental car charges have gone up faster than the rate of inflation is that the percentage of renters who take the CDW
continues to drop, as more people find their car insurance covers rentals or they have a credit card that covers rental car damage.
|Quoting TSS (Reply 10):|
Read the fine print on your policy or call your agent and ask them before assuming you're covered.
Very true - I'll expand on that a little, because while 99 times out of a hundred the CDW
is a rip-off, that hundredth person finds himself badly wishing he had it.
First off, make sure your insurance specifically covers rental car use for travel - a lot of policies cover rental cars only as a replacement if your car is in the shop. (In some cases, it even goes so far as to only cover if your car is in the shop due to an accident that's led to an insurance claim, but doesn't cover breakdowns.)
Second, if you're going to certain states - particularly Florida - determine that if your insurance covers rental cars, that it covers not only the damage to the car but the rental car company's loss of revenue while the car is out of service. Rental car companies got Florida to pass a nice little law that gives them the right to get back the revenue they "lose" while the car is out of service, and they regard the car as out of service from the time of the accident until they get the money for the repairs. If you have coverage from a large, reputable car insurance company, this delay might only be a few days, so this coverage might not be a big deal one way or the other. But if you use a smaller, regional company, this delay could be costly.
(In case you're wondering why I have the quotation marks around "lose" up there, it's because the car company doesn't have to prove that they actually suffered a loss of revenue...they can make the claim even if they're not 100% booked up and don't actually have to turn a paying customer away.
Third, watch out for limitations on the car - many companies limit the value of rental cars they cover. Your policy may specify a specific class of car above which they won't cover, or it may be based on the (depreciated) value of your current car, or on the value of your car when it was new (another way of saying same class of car.) And the coverage may not work in certain countries.
Now if your credit card offers rental car coverage, you may think "well, I'm golden." Not necessarily. Credit card coverage is generally "secondary coverage", which only pays after you file a claim with your primary carrier. And if your primary carrier doesn't cover the car, or if you're like me and don't own a car at all, they generally don't talk to the credit card's coverage provider. They expect you to pay for the repairs and then get reimbursed from the credit card folks. So if you're in a state wth the "lost revenue" provision, the meter is running on that until you pay them. In other states, they can charge you interest on the car repairs, at pretty usurious rates. If the accident was the other guy's fault, the meter's running until his insurance company pays...and if he doesn't have insurance, in many states you're on the hook.
(Also, when going outside the US, keep in mind credit card coverage doesn't work in certain countries. For some reason, all my cards exclude both Australia and Ireland. And there's probably a limit on the value of the car - my cards all stop at $50k except Amex.)
One option if your insurance doesn't cover rental cars, or you don't have a car, is a program American Express
offers cardholders. It charges a flat rate per rental
($15.95 to $24.95), not per day, covers rentals up to 42 days, covers a loss to the rental car of up to $100k, and is primary coverage. With a per-contract rate that's comparable to the daily rate for most companies, it's a (relatively) good deal. (And no, I'm not getting a kickback from Amex....dammit!)
I'm lucky - I can afford, between savings and credit cards, to just pay them for the damn car if something happens and get reimbursed later. And if I'm renting a luxury car, I use the Amex program and just pay the $25. But if you don't have that luxury, make sure you're covered somehow...I had a friend who got to pay a third of his paycheck for a year to a car rental company when he got in an accident and had no coverage.
|Quoting LTBEWR (Reply 2):|
...are becoming a real scandal here in the USA and need national regulation.
Normally, I'd object to this idea, as insurance is generally a state responsibility and I'm something of a strict federalist. However, in this case I'd consider Federal legislation - so many state governments are in thrall to the tourist industry (I'm looking in your direction, Tallahassee...) that I'd support a Federal move to regulate CDWs and the like.
As for the local taxes? Not sure - while as a frequent traveller I'm getting tired of getting fleeced, I do have the option of just not going to a specific city that takes the rental car taxes to an extreme. But business travelers don't always have that option.
In all fairness, at least the fees are becoming more transparent - most rental car companies' web sites, and some of the on-line agencies (for example, Orbitz), now quote car rental charges including all the mandatory fees. Even a few years ago, that wasn't true - it was "surprise!" when you got to the airport.