Car hire: get into gear for a smoother ride

http://www.theguardian.com/money/2015/jul/18/car-hire-changes-firms-rent-vehicles

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Massively overpriced add-ons such as child car seats, high-pressure sales tactics aimed at getting you to buy ropey insurance, demanding you pay upfront for a full tank of petrol and return the vehicle empty, money whipped off your card to pay for damage you didn’t cause, charges for mysterious “traffic violations”… it’s all too easy to be taken for a ride when hiring a car.

But this week brought some much-needed good news that should make renting a vehicle a less stressful – and hopefully less costly – business.

The UK competition watchdog has announced that five of the biggest rental firms – Hertz, Avis Budget, Europcar, Enterprise Rent-A-Car, and Sixt – have agreed to make “improvements” to the way they deal with customers in all parts of the EU following concern about hidden costs and “potentially unfair” practices in the sector.

Related: Car hire should be less stressful after tweak to UK licence-share system

As a result, millions of motorists who hire a car in the UK and abroad will soon enjoy better terms and conditions. The shake-up includes, for example, more rights for people to challenge claims that they are liable for “damage” and associated repair costs before any payment is taken from their credit or debit card, and a pledge that holidaymakers won’t be subjected to unacceptable hard-sell tactics at the airport rental desk.

However, with most of the improvements being introduced over the next six months, they may not be in place in time to benefit those people about to set off on their summer holiday. And if you are heading to Spain – probably the number one hotspot for problems – it’s worth being aware that one of Hertz’s low-cost rental brands, Firefly, appears to be defying the Competition and Markets Authority (CMA), consumer group Which?, and Spain’s oldest consumer organisation by refusing to change its policy on billing holidaymakers for fuel.

The improvements are definitely needed – Guardian Money has, over the years, received countless complaints about car hire firms.

The CMA led the Europe-wide review, backed by the European commission and involving several other consumer protection authorities, which has resulted in the five firms committing to “an overall better package of practices”.

The problems highlighted included a “lack of transparency” on pricing and contract terms – for example, where the headline price appears low but extra compulsory charges are added late in the booking process or at the pick-up desk resulting in a higher final price; the way in which people are persuaded to buy additional insurance products, typically to cover the excess not covered by the basic insurance; the “lack of transparency and potential unfairness” of some car rental firms’ policies on fuel; how vehicle damage is assessed and charged for; and how disputes are dealt with.

One of the biggest areas of complaint is where motorists are charged for damage they say they did not cause. Holidaymakers frequently report extra payments being taken without warning from their credit or debit card after they have returned home, ostensibly to cover damage to the vehicle or traffic fines.

The CMA says each of the five companies had committed to make changes to their practices that included one or more of the following:

• More and clearer information about any surcharges and the cost of optional extras when people are booking online. For example, most of the firms agreed to improve the way they let people know early on about any extra charges that younger drivers must pay (one of the companies said it already does this), while “nearly all” agreed to give better information on their websites about the prices of optional extras.

• Better information at the booking stage about optional waiver and insurance products, including prices, exclusions and excesses. Crucially, the companies have also committed to making sure their staff at the rental desks do not “apply undue pressure”. Some of the firms are “refreshing” staff training.

• More transparent fuel policies. The CMA recommends that rental firms offer the default option of a “full-to-full” service, whereby the car is supplied with a full tank of fuel and must be returned with a full tank, and adds that this should be available at no extra cost.

Customers will be given at least seven days to dispute damage charges before they are processed by the rental firm

The other much-criticised option is known as “full-to-empty”, whereby a firm makes you pay upfront for a full tank and assumes you return the car empty. The CMA report points out that on Firefly’s website full-to-empty will remain its default policy in Spain, with full-to-full only be available if you buy a bundle of optional products and services. This is the Freedom Pack and costs €99 (£70) for 8-14 days, and €149 (£105) for 14 days-plus. The watchdog says: “We consider that any full-to-full option should be offered at no additional charge to the consumer.” Hertz responded by saying: “Firefly’s full-to-empty policy (with refund for unused fuel) in Spain is aligned with the local market standard for deep value car rental.”

In better news, the Spanish operation of InterRent, a Europcar budget brand, introduced a full-to-full fuel policy as standard in April this year.

• Improvements to the information on how pre- and post-rental vehicle inspections work. “Nearly all” the companies have agreed to this. The firms have also said they will ensure customers are given a “reasonable opportunity” to challenge any damage or repair charges before a payment is taken from their credit or debit card. Customers will be given at least seven days (and in some cases a minimum of 14) to dispute the damage charges before they are processed by the rental firm.

Once the changes have been made at the five firms’ primary brands they will be implemented at their other European businesses, which include Dollar and Thrifty (in the case of Hertz), Maggiore (an Avis Budget brand), and National and Alamo (both Enterprise brands).

Beware the fiddles

• Buy the basic package only. Firms make big profits by selling add-ons. Use your own booster seats etc if possible.

• Don’t buy a rental firm’s car hire excess insurance; arrange your own cover independently. Insurance from a hire firm can cost up to £24 a day, says specialist provider iCarhireinsurance, whose policies cost from £2.99 a day, or £39.99 for annual European cover. Another standalone provider is Insurance4carhire.

• Beware a “full-to-empty” fuel policy.

• Check the car for damage. Mark even minor scratches on the agreement and get it signed. If you don’t there is nothing to stop the firm arguing you caused the damage. Video/photograph the car when you pick it up and return it.

• Retain paperwork and check statements to make sure promised fuel payments and excess charges are returned, and for any mysterious extra charges.