1. Purchasing unnecessary insurance
Insurance serves a valuable purpose, and it can protect you if catastrophe strikes. However, doubling up on your coverage won’t add any extra benefits, and this is often what happens for many people who rent cars and purchase insurance coverage at the rental car counter.
If you have insurance coverage for your personal vehicle, your policy may provide protection during your time spent behind the wheel of a rental car. It’s important to understand exactly what type of coverage your personal vehicle’s insurance policy provides. It can provide coverage in three key areas:
Liability coverage
- If you cause an accident while driving, liability coverage helps to pay for the other party’s medical bills and property damage.
- You legally have to have liability coverage in every U.S. state (except New Hampshire), so check your state’s minimum coverage requirements to stay compliant.
Comprehensive coverage
- Comprehensive coverage helps pay for damage or loss due to perils such as theft, wind and fire.
Collision coverage
- If you have a collision with another vehicle or an object such as a tree or a gate, collision coverage helps pay for the repairs.
Before paying for the insurance offered by rental car companies, check with your insurance agent to see if the adventures in your rental vehicle will be covered.
It’s also important to remember that certain credit cards offer insurance coverage if you use the card to pay for your car rental. However, sometimes this is just secondary coverage, which means it applies only to expenses not covered by your personal auto insurance policy or the rental car company’s policy. Call your credit card company before you rent to get a clear sense of what kind of coverage is provided.
2. Renting a car with no insurance
While it’s a mistake to purchase unnecessary insurance, it’s an even bigger mistake to rent a car with no insurance coverage whatsoever. If a mishap happens, you could find yourself on the hook for expensive bills and repairs.
The Zebra’s licensed insurance agent and adviser Neil Richardson adds that replacing a rental car is significantly more expensive than replacing a personal vehicle of the same model.
“In addition to the cost to repair or replace the vehicle, the rental company will also charge you for their inability to make money on it while it is out of service,” Neil said. “For every day that the vehicle is not being rented out, you will be charged for the rental company’s loss of use.”
If coverage isn’t provided by your personal insurance policy or credit card, paying for insurance at the rental car counter is a wise move.
3. Renting your vehicle from an airport
If you’re traveling, renting a car at the airport can seem like the simplest solution. However, airport rentals come with surcharges that will cost you money. Surcharges vary from airport to airport and can exceed 10 percent of your rental costs.
You’ll save on your rental if you choose a company located outside the airport’s premises. Many of these rental companies provide transportation to and from the airport (have you ever noticed all those Budget or Hertz shuttles?), so you won’t sacrifice anything by way of convenience.
4. Failure to shop around
Nobody likes spending too much time on a tedious chore like renting a car, and it can be tempting to sign on the dotted line with the first company you encounter. However, car rental rates can vary quite dramatically from company to company.
You can save money by spending a little extra time to consider your options. Most travel comparison sites let you evaluate multiple car rental companies.
5. Choosing an inadequate mileage plan
Car rental companies offer varying mileage plans, and these plans can have a huge impact on your final bill. Some companies provide unlimited mileage, which allow you to put as many miles on the car as you need to without accruing additional fees. Other companies have mileage caps, and if you exceed this cap, you’ll be charged a fee. This fee can be quite substantial if your mileage surpasses the cap by a large margin.
Make sure you’re aware of the mileage plan, and make a choice that is in step with your needs.
6. Failure to weigh fuel replacement options carefully
You have three options when it comes to purchasing fuel for your rental car:
Prepay for fuel.
With this approach, you purchase the fuel from the rental car company upfront, and you can return the rental at any fuel level. This can be advantageous if you’re strapped for time, since it eliminates the need for a stop at the gas station. It is also an advisable alternative if it’s hard to find a gas station in the neighborhood where you’re staying. Fuel prices for prepaid gas are usually competitive with those at nearby pumps.
The big drawback to purchasing prepaid gas is that you aren’t given a refund for unused fuel. If you’ve only used a quarter of a tank, you’ll still have to pay for the entire tank.
Refueling at the rental company.
Rental car companies top the tank off before handing you the keys to a vehicle, and unless you’re buying prepaid gas, they expect you to return the vehicle with as much gas as it had when it was handed over to you.
If you choose to have the rental car company refuel the vehicle upon its return, this allows you to return the rental at any fuel level, thus saving you the hassle of having to find a gas station.
However, refueling at the rental car company is the costliest route to take. Rental car companies charge much steeper rates for this option than they do for purchasing prepaid fuel. You can easily wind up paying double what you’d pay at the local gas station if you refueled the car yourself.
Returning the rental with a full tank of gas.
This is likely the best choice for most people seeking to rent a car, since it allows you to pay only for the gas you’ve used at regular station prices.
The downside to this approach is that you’ll have to make time in your schedule to fill the car up before turning it in.
7. Turning the rental in late
Many rental car companies offer a grace period of 30 minutes or so when processing returns, but if you’re significantly later than that, you may have to pay an hourly late fee or another full day’s rental. Avoid this expense by turning your vehicle in on time.
Take a prepared and informed approach to renting a car, and put your savings toward your driving adventures.
