In the last few weeks I’ve been flooded by people contacting me to say they’ve been ripped off when hiring a card abroad.

Now the holiday season is properly underway for the first time in three years, the demand for hire cars has exploded. The first unpleasant shock for holidaymakers was the doubling, and in some cases tripling, of the cost of hiring a car. Over the pandemic, many car hire firms scaled down their operations and sold off some of their vehicles to stay afloat. So it’s perhaps inevitable that with demand back to pre-Covid levels, costs will increase while the hire firms play catch up.

However, the car hire industry did not exactly have the best of reputations when it came to service, costs and ‘extras’ anyway. And it’s clear to me that many people have had enough.

So what are the things you need to watch out for when hiring a car? Here’s my guide.

Do your research and beware traveller’s fatigue

Always research car hire prices at home before committing to a specific business. In the past there was intense competition among the hire firms to give the lowest quote. But this was achieved by raising excess fees and adding on additional costs in other areas. So remember that the cheapest policies might actually be more expensive when you factor in all the catches.

Wherever possible, don’t book a car on arrival at an airport, station or ferry terminal. You’ll be tired, possibly a bit fed up (particularly if you’ve flown) and desperate to get to your destination. Car hire firms know this and are aware that you might not scrutinise the contract too closely. Even when you’ve pre booked, you might suddenly find that you’re being charged extra for things that weren’t mentioned when you booked. Understanding all the costs associated with car hire contracts is essential, so take your time and don’t be rushed.

Make sure you question the credit card payment

Countless people get caught out by the car hire credit card rule. In order to hire the vehicle most firms will insist the driver must pay the fee and deposit on a credit card in their name.

But why do you have to have a credit card to book a hire car? Or why does it has to be in the driver’s name? 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 – and they’ll check you’ve got it too. Frustratingly, many firms ‘ring fence’ a deposit for excess fees for damage too, which will mean you can’t use that credit for the duration of your trip.

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. The money comes off your credit card without you having the right to argue – though you should receive written notification of the debit – and then you’ll be forced to make a complaint to get your cash back.

Damage excess fees

When you sign your contract, always look for the 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 – despite the fact that the firm will have its own insurance.

Leaving aside the sheer size of these excess fees, the main source of anger when it comes to car hire disputes is over allegations of damage. If the car hire firm decides that repairs are necessary to the vehicle as a result of your actions, they can conclude you are liable for the repairs and debit your credit card. It’s not unheard of for people to be charged £1,000 or more for a minor scratch on a bumper. Astoundingly, a representative for the industry once admitted during a radio interview I was taking part in that the repairs might not even be made!

The moral of the tale is this. Before you drive off in the vehicle, you need to photograph the car from all sides, check the boot and glove compartment along with the interior. The hire firm will mark up existing damage on the car on a diagram and give you a copy. Make them mark down everything that you’ve spotted too.

Insurance overcharging

Car hire firms will tell you that you will need to take out an insurance policy to cover the excess fee. This is vital, so don’t drive off without a policy covering you for the excess. Many firms are insisting that you have to take out their own policies. An excess fee bought from the car hire firm can cost £200 or more. However, you can buy cheaper better policies in the UK for £20 to £40. You will need to make sure that the policy covers the make and model of the vehicle you are hiring.

Worryingly, I’m hearing that not only are people being told that they have to take out the car hire firm’s own policy, they are also being informed that there are hefty charges for not doing so. So check before you travel. In the UK, selling insurance is a regulated activity, which means you can go to the Financial Ombudsman if you feel you have been misled by the business in to taking out their policy. Laws vary around the world though.

Petrol, milage and endless extras

Some car hire firms have ludicrously complicated rules about petrol and returning the car. Some will insist on a full tank, others on a half-filled tank, which doesn’t make much sense. Failure to follow the requirements can result in extra charges.

Many of the contracts I’ve reviewed bill you for mileage over a certain amount. So if you’re driving around a foreign country talking in the sites as you go, then you could find it’s more expensive than you expected.

Finally, there are a bewildering range of additional ‘add-on’ charges levied by some car hire firms. These can include an ‘out of hours’ pick up of the car, late arrival fees if your plane is late and extra administration charges. You will also usually have to pay more for everything from roof racks to child seats.

Making a complaint

If you’ve got a complaint about a car hire company, make a complaint to the business first in the country it’s based. This can be frustrating if you booked a car abroad because all the big brand names have branches in the UK too. Put your complaint in writing (email it if you can) explaining what went wrong and what you want them to do to sort it out.

If that doesn’t work the European Car Rental Conciliation Service (ECRCS) can help with cross border car hire complaints – but only in the EU. The European Consumer Centres Network (ECRCS) can help you for free if you’re struggling.

In the UK, The British Vehicle Rental and Leasing Association (BVRLA) can help with complaints. http://www.bvrla.co.uk/

If the complaint is about an insurance policy sold by the car hire firm, there are ombudsman schemes for banking and insurance abroad and you can find a list at FIN-NET 

If you booked through a holiday or comparison website, take a look at the page you landed on and click on the ‘about us’ section. That will tell you where the business responsible is based.

You may be able to ‘charge back’ or claim for any money back that’s been taken in breach of the contract. This can be a problem because car hire contracts are written to allow the firms to debit you straight away for any ‘damage’ or ‘costs’ you’ve incurred even if you dispute this. It’s definitely worth attempting this though. Payments taken on a credit card could also be disputed through making a section 75 claim under the Consumer Credit Act to your card provider too.

Featured in Times Money Mentor – Martyn James

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