Car Rental Rates: Hidden Costs in Your Car Rental Prices

Car rental rates often work out to much more than you originally expect - make sure you know what's charged as "extras."

Car rental companies generally charge four types of basic rates: a daily rate with a mileage charge; a daily rate with a limited number of free miles per day; a daily rate with unlimited mileage; and a rate that has free mileage over an extended period. Most firms offer economy, compact, intermediate and deluxe cars — rates vary according to the size and style of the vehicle. Special promotional rates are often available, especially over weekends, but they should be specifically requested in advance.

Be aware of other additional charges – these can often bust your travel budget. For example, most rental companies charge an extra fee if a car is returned to a different city or location than where it was picked up. Be sure to let the agent know if you wish to drop off the car at a different location. The drop off charge may already be included in the car rental rate.

Check details about the insurance policy. Usually, if a rental car is damaged the renter may be responsible for the first several hundred dollars (the deductible); the renter may even have to buy the car. You can absolve yourself from this liability by purchasing a Collision Damage Waiver or Loss Damage Waiver. Although these are optional, some rental companies insist that you purchase CDW or LDW as regulations vary from state to state. Your personal auto insurance may already provide coverage for damage to rental cars, so it may be unnecessary. You may also want to consider the cost of purchasing other kinds of coverage, like personal accident insurance, personal effects coverage or additional liability insurance.

The next rental budget buster is gasoline. Make sure you are familiar with the car rental company’s policy on gasoline when you check in. Some companies charge you a flat rate for gas upon renting the car and expect you to return with the gas tank empty. Most, however, will levy a charge based on the firm’s gas rates for filling the gas tank when the car is returned, if it is not already full. If this is the case, be sure to fill the tank before returning the car — gas prices are usually cheaper at gas stations.

In addition to the daily rental rate, taxes are also charged. These vary from state to state. For international car rentals, taxes often raise the original rate price by 10 to 30 percent. International rentals are also subject to a possible Value Added Tax. At a few airport rental locations, some car rental companies may also tack on an “airport surcharge” fee of about 10 percent of the rental rate in addition to normal taxes.

Be sure to read the rental agreement carefully to see what the rental rate covers. Look for possible restrictions. If a car rental firm is offering a low rate, make sure that the agreement’s restrictions do not outweigh the cost savings.

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