As if travellers weren’t facing enough problems at the moment, I’ve been hearing lots of horror stories about car hire companies abroad over the last few weeks.

Not all car hire companies are terrible – but there are a lot of things you need to watch out for so you don’t get hit with huge charges, overpriced insurance and other problems at the collection desk. Here are my tips.

What to watch out for when hiring a car on holiday

Ever wondered why you need to have a credit card to book a hire car? It’s all down to liability if something goes wrong. The credit card you use will need to have a set amount of credit on it before the car hire company will even let you leave with the vehicle. This is because the company will automatically debit your account for any damage or contract dispute costs as soon as it concludes you’re liable.

This is ludicrously unfair, but for now, there’s nothing to stop them doing this. So the savvy traveller needs to be aware of things that can go wrong if they want to avoid extra costs.

Massive damage excess fees. When you sign your contract, you’ll have a damage or collision ‘excess’ fee. This is what you have to pay if there’s a crash or minor damage to the vehicle that needs to be repaired. It’s not unusual for this to be £1,000 or over.

Insurance and add-ons. To cover you for this excess fee, the firm will sell you insurance, just in case there is an accident. These policies can cost up to £200 – but you can buy alternatives online for £20. Firms that claim you can’t do this should be avoided. But make sure the policy you buy covers the make and model of the car.

A little scratch. Ask anyone who’s hired a car and chances are you’ll come across someone who’s been hit with a bill for ‘minor’ damage that’s cost them hundreds of pounds. I’ve seen people billed for a scratch on a bumper where the firm has claimed the whole thing needs to be replaced. And then not made the repair!

High pressure sales. You’re tired, you just want to get to the destination and the firm tries to flog you loads of things you don’t need. Watch out for upgrades that invalidate your pre-purchased insurance, fuel-guzzling vehicles and other additional expenses.

Petrol problems. You may be charged if you don’t return your car with a full tank of petrol. Or alternatively you may be asked to return it almost empty. Ask about any petrol penalties before you leave the desk.

Extras. Late pick up or plane landing late? That’ll be extra. Roof rack or child seat? Extra.

My tips to avoid being conned when hiring a car abroad

  • Book in advance, shop around and read all the documents before you travel.
  • Check the excess fees – the higher they are, the riskier it is to take out the contract.
  • Take out a damage or collision insurance policy (sometimes called ‘zero excess’). Buy in advance rather than from the firm – it’s much cheaper.
  • Ask about the deposit. If the firm ‘ring-fences’ a deposit, you can’t spend that money. If they debit your card and refund you on returning the vehicle find out how long it takes for the credit to come back and if you can pay in the local currency, so you don’t lose out on exchange rates.
  • Photograph the car from all angles. A representative from the firm will sign the car out with you. Make sure they write down every mark or scuff on their documents and photo the car from all angles too (check the boot). Do the same when you return the car.
  • Keep all the paperwork and receipts for things like petrol.
  • If you are in an accident, call the police and get copies of all documentation. Make sure you’ve checked with the hire firm what their procedures are too.

Martyn James is a leading consumer rights campaigner, TV and radio broadcaster and journalist.

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