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"Car Rental Fees Get Ugly"

By Kelli B. Grant Published: January 20, 2006
Click here for more stories by Kelli B. Grant.

National, January 20, 2006 — YOU SCOUR THE WEB for a great deal on a rental car, only to be bombarded with miscellaneous fees and taxes once you reach to the rental counter.

According to a 2005 report by Consumer Reports, these added costs can easily account for 30% of your total rental bill. You might, for example, get socked with a $4-a-day fee to fund downtown development projects like Kansas City's Sprint Center Arena. (Look for this fee when renting from the Kansas City airport.) And when renting at the Reno/Tahoe International Airport, look for an 11.11% "airport concession recovery fee," which is charged by rental companies to offset the costs of using the airport property.

Stephanie Abrams, host of the Business Talk Radio Network show "Travel with Stephanie Abrams," says the fees stem from local and state governments aiming to eke out more money from travelers for local use. "It's a reflection of what the market will bear," she says, noting similar nickel-and-diming in the airline industry. (For more on those fees, see our column, "Avoiding Ugly Airline Fees.")

"Unfortunately, a lot of these fees just aren't avoidable," says Abrams. Since many are based on percentages, she says, your best bet is to find the lowest possible base rate and pay less in fees overall.

But don't give up the good fight. Here's some advice on how to avoid five nasty fees:

Airport Fees
Airplanes aren't the only things taking off at the airport. You'll also pay hefty taxes when renting your car at an airport, says Jeff Rudy, a spokesman for Travelocity, a travel-booking web site. The taxes cover the added costs of operating at the airport, such as security, facility usage and so on.

And, boy, do they add up — according to the site's 2005 study on rental-car taxes at airports, taxes added an average 25.8% to the quoted base price. At Houston's George Bush Intercontinental Airport, taxes increased the base-rate price by a whopping 66.1%.

You can avoid these fees by renting at a location near the airport instead, says Rudy. Many companies will provide a free shuttle, but even a cab ride could be cost effective. In Dayton, Ohio, renters pay about 7.9% in taxes at off-airport rental sites, according to the study, compared with 35.8% at the Dayton International Airport.

Extra Driver Fees
Taking turns at the wheel is a smart idea, but a potentially expensive one. The standard fee for an additional driver is $5 a day, says Abrams. That fee increases to $25 (or more) if the driver is below age 25.

Abrams suggests calling several rental companies before you book. Avis, for example, will waive the fee for personal trips if the additional driver is a spouse, or for a business trip, a co-worker.

Insurance Fees
Don't fall prey to a hard sell for collision and liability insurance, advises Brian Moody, a road-test editor with Edmunds.com. These fees can easily double your daily cost. At Alamo, for example, you'll pay $21.99 a day for full collision coverage, and $11.95 a day for extended protection (essentially, liability coverage).

Avoiding the fee is as simple as making a few phone calls in advance to find out if you're already covered, says Moody. First, call your auto insurer and ask about your coverage while driving a rental car. Be specific about where you'll be traveling and why (business or pleasure). With most insurers, the coverage and deductibles for your own car will apply to a rented vehicle. If you aren't insured, or need extra coverage, a call to your credit-card company may help, he says. Many cards provide collision insurance on rental cars as a benefit to cardholders. Check your higher-level cards first (gold, platinum, etc.) as they tend to have better benefits.

Frequent-Flier Fees
Renting a car can be a great way to amp up your frequent-flier miles. (See our columns, "Keep Your Frequent-Flier Miles" and "Earn More Miles.") But take a careful look at your paperwork — you may be paying extra for this perk. Many companies charge either a flat fee, or a "frequent-flier tax recoupment surcharge," which amounts to 7.5% of the cost of miles (based on the assumption that each mile is worth two cents).

Now, granted, the fees are tiny. If, as with Thrifty, you're earning 50 American Airlines AAdvantage miles per day, your daily surcharge amounts to a mere six cents. National Car Rental, on the other hand, charges a flat fee of 50 cents a day for renters accumulating miles for Alaska Airlines, American West, Continental, Delta, Frontier, Midwest and United.

Probably not too big a deal. But if you're the type who never seems to accumulate enough miles to earn that elusive free airline ticket, this may be one fee you want to skip.

Late-Return Fees
Most companies offer a one-hour grace period before late fees start to kick in. After that, says Moody, the best-case scenario is that you'll be charged one-third of the daily rate. According to Consumer Reports, a late return could cost you more if you opted for the cost-friendly weekend rates: The entire rental could revert to the more expensive weekday rate.

The key to avoiding this fee is — oddly enough — in the pickup time, says Moody. "The car rentals run on a 24-hour rate," he explains. So if you pick up the car at 9 a.m., it's due back at 9 a.m. on the return date. Plan your pickup time based on the time you want to return the car, and don't pick up the car any sooner than you need it.

And keep in mind, you might not even have a grace period when it comes to extras like a cellphone, GPS system or child-safety seat, warns Consumer Reports. Even if you're just a few minutes late, you could find yourself paying for an extra day.

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