Experts like Bankrate, Kiplinger, USA Today, the AARP, and Daily Finance caution that unless you employ your "eagle eyes" to scour through your rental agreement before signing, you can pay as much as double the daily rate you were expecting. Yikes! So please review this list of fees before you book your next rental car—if it helps, print it out and take it right to the counter with you!
1. Insurance fees
Rental car insurance fees are one of the biggest scams out there—unless for some reason you don't have your own car insurance, which is another topic entirely. But if you have your own insurance policy, in most cases you’re covered for rental car use as well.
Tips to avoid paying: Call your insurer and review what your coverage is before renting a car. In some instances, your credit cards may also offer coverage if you pay for the rental car with that particular card. If you have a personal health, a homeowner's or rental insurance policy, you can safely decline personal accident and personal effects coverage—even if you still opt for extra collision or liability coverage.
NOTE: In a few U.S.A. states and many international destinations, purchasing basic rental car coverage is a requirement. If you’re renting out of state or out of country, ask before you rent so you know what to expect.
2. Add-on fees
There’s a whole host of add-on fees that have the singlehanded ability to double your bottom line payment. Here’s a list of the most common add-on fees. Be sure you listen carefully as your rental agent explains your rental agreement. Also notice what you’re agreeing to if you’re presented with a series of electronic signature boxes at checkout.
- GPS system: This fee covers rental of a navigation system.
- Licensing fees: These fees are permitted in some states—they cover a portion of the cost of the licensing of the vehicle (a.k.a., "licensing tax" or VLF fee).
- Age fees: If you’re under the age of 25, or have a second driver who is, you may be assessed a fee.
- Extra-driver fees: If you won’t be the only driver, you can expect a surcharge (around $3 to $25 per day). Be sure to ask if spouses, partners or family members are exempt from paying the fee!
- Miles-redemption fees: You've been saving your miles and now you want to redeem them for a rental car, but be careful because many rental car companies assess an extra fee to process your rental this way.
- Peak fees: If you’re renting during a specific season or on certain days of the week, you may pay more. Not all companies do this, so be sure to shop around!
- Airport-surcharge fees: In the same way that you may be assessed an extra fee to rent during peak days or times, you may pay more if you rent at a hub, such as an airport location.
- Mileage fees: Unfortunately, it’s a mistake to assume you get unlimited mileage no matter where you rent. Be sure to ask, as penalties can be stiff for exceeding your daily allotted mileage.
- Gas fees: If you fail to refuel fully before you return the vehicle, you’ll be charged up to double what the going rate is for a gallon of gas in that city. Also, unless you’re just beyond pressed for time, plan to refuel before dropping the car off rather than purchasing the prepaid gas option, which will bill you for a full tank of gas whether you have used a whole tank or not.
- Late- (or early-) return fees: You may expect a fee if you return the car later than agreed upon, but how about if you return it early? Whether you receive nothing, a pro-rated refund of time unused, or a surcharge is up to the individual rental car company.
- Upgrade fees: Beware if your rental agent asks if you would like to upgrade your vehicle size. Unless your agreement stipulates that the upgrade is free, you can assume it’s not free.
- Drop-off charges: If you pick up your car at one rental location, but drop it off at another location, this can come with steep fees attached.
- Stadium fee: Oh yes, just when you thought the fees couldn't get any sneakier, here comes the “stadium fee"—a fee permitted in some states that’s tacked onto each rental car purchase to (get this) fund building a stadium in that city.
Tips to avoid paying: Book online—preferably directly with the rental car agency of your choice—and review the agreement online as well. Print out the price quote you get, complete with any extra options you choose. Then, when you’re signing on the dotted line, stand your ground. Rental car agents today are sales agents first, but don't let yourself be pressured to buy add-ons you don't want or need.
3. Travel agent fees
Finally, be extra wary if you decide to book your rental car through a travel agent. For instance, if you book your rental car as part of a package with flight and hotel through an airline website or online-travel website, you may be assessed fees for that agent's insurance—this isn’t the same as the insurance offered to you by the rental car company!
Tips to avoid paying: Just say no. If you do decide to get optional insurance coverage (provided it’s not required by the state or country you’re renting in) at least be sure to purchase the policy with the rental car company directly.
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