A guide to car hire and car hire insurance

Intro

Whether we are travelling on business or kicking off the shoes on holiday, hiring a car has become more or less commonplace. But like many familiar transactions, the ins and outs of actually arranging your next rental car might actually repay more than a moment’s second thought.

This guide may help you to rethink some of the business of hiring a car, so that the next time you do so, it might be more straightforward and problem-free – and save you more than a few pounds into the bargain.

Why hire a car?

It might seem like an obvious question, but asking it may help you better understand why a hire car might be relevant to your travel plans, your expectations about getting out and about, other options there might be to renting a car, what kind of hire car is likely to serve your purpose, and how much you may have to pay.

Some of the benefits in hiring a car include:

  • the sheer freedom and independence it brings – you do not have to rely on anyone else getting you somewhere, you are not tied to anyone else’s timetable (whether the alternative is public transport or some other form of private hire);
  • of course you might take excursions or sight-seeing tours as an alternative to using a hire car but you are then dependent on the operator’s timetable and a potentially limited itinerary;
  • you are able to get off the beaten track – whilst organised excursions may be able to take you to the most prominent and well-known tourist sites, a hire car allows you to cast your net far wider and to go quite literally wherever the fancy takes you;
  • the airport is likely to be some distance away from your hotel or other accommodation, so the savings you might make on taxi fares between the two may in itself pay for several days of a rental car;
  • there is little fun in lugging your baggage on and off various forms of transport or carrying it through busy streets or up and down escalators on the underground – a hire car allows you simply to stow everything into the boot;
  • if you are travelling with young children, the luggage-carrying potential is not the only advantage a hire car may have – when young one are fractious (as they almost certainly will be at some stage) you may find the experience far easier to deal with in your own car than on a crowded bus, coach or train;
  • the perennial question from small children, “are we there yet?”, may be answered by one of the guessing games suggested on the BBC website, but even diversions such as this are likely to prove far more successful within the confines of your own car rather than surrounded by a crowd of strangers; and
  • when it is time for a comfort stop you can make it at your own time and leisure – and as often as the occasion demands – without waiting for the train to pull into the next station or for the bus to turn into the next service area.

Very few things are completely free of a downside, of course, and car hire is no exception. Chief of these might be the fact that car rental may prove quite expensive – and eventually even more expensive than you had counted upon.

The remainder of this guide offers some hints and suggestions about how you might keep a tight rein on the potentially runaway costs – and instead sit back and enjoy the benefits of your hire car.

What to consider when hiring a car

Booking

The internet has certainly made the world a much smaller place. It is no longer necessary to wait until you reach your destination before reserving and paying for your hire car.

Indeed, planning ahead and booking ahead is likely to make more certain that you get the vehicle you want, on time and at a price on which you can rely. The internet provides the opportunity of making the reservation from the comfort and convenience of your own home before you take even the first step on your travels. In simple terms, therefore, aim to book as early as possible as per the advice of the Citizens Advice Bureau, which adds the reminder that hire car rates invariably increase during popular seasons of the year.

The advice is echoed by the Money Saving Expert, which gives specific examples of the savings that might be made by booking your hire car ahead of time rather than waiting until you arrive in some foreign airport.

What car?

The rental car you choose is likely to come down to rather more than a simple question of taste:

  • much is likely to depend, of course, on your purpose in hiring the vehicle;
  • if you intend to be driving only occasionally and for relatively short distances, a smaller, lower-powered – and therefore cheaper – car may be entirely sufficient;
  • if you are planning to travel longer distances, however, it may be worth paying rather more for greater comfort, space and power;
  • if you are travelling with small children, a larger vehicle may be a question of necessity if there needs to be room for child seats and extra baggage, for example;
  • in any event, you might want to take into account the likely fuel consumption of the vehicle you choose, the ready availability of fuel in the country in which you are driving, and of course its cost;
  • your choice of vehicle may also be influenced by whether you are travelling on holiday, or on business, or something of the two; but
  • remember that the sheer strain of driving, especially in a foreign country, can prove very tiring (probably the last thing you want to feel on holiday), so it pays to choose a car in which you feel comfortable – so it might be worth checking out a specific make and model by simply sitting in one at your local motor showroom before you decide;
  • so, when making your reservation, you might want to consider whether other people in your party need to be added as drivers of the vehicle.

Hidden costs

However carefully you have researched your car rental deal, it is almost certain to end up costing more than you may have bargained for.

Some of these may be well hidden by the car rental company and even though you might have paid for the hire of the vehicle when making the reservation additional costs may be sprung on you when you go to pick it up. Indeed, some of these costs are so well hidden that you might regard them as scams used by rental companies to boost their profits.

Refuelling the vehicle, for example, has traditionally been one such area. Until recently, it may have been a requirement that you return the vehicle with a full tank of petrol – or have it refilled by the rental company at a far higher price per gallon that you might have paid at a normal petrol station and at a rate of currency exchange that might be less than favourable to you.

In many parts of the world the practice has now changed and, although you pick up the car with a full tank of fuel, you are required to return the vehicle with an empty tank – with no refund on any fuel that is still in it. It can be very difficult judging how best to return the car with as little fuel in it as possible – and you may well feel frustrated by the fact that the rental company is gaining the fuel for which you have paid.

Other scams or rip-offs which you might watch out for are the very high prices typically charged for such add-ons as the rent of child seats or satnav.

In the case of child seats of course these are likely to be an essential item if you are travelling with small children; in the case of a satnav, you might consider it a very useful safeguard and aid to driving along unfamiliar routes. Although it might appear that the car rental company is profiteering from the prices charged for these add-ons there is no reason in the world why you should not take your own satnav and child seats with you – and save a great deal of money.

Insurance

If there is one aspect of renting a car which most seems to get the blood boiling it is the question of car hire insurance – what it covers and how much you have to pay for it.

Reasons for the controversy and frustration about hire cars and insurance may boil down to one of two considerations:

  • it is either a question of the car rental company devoting its efforts towards being an efficient organisation from which to hire a vehicle, with insurance being a secondary but necessary evil; or
  • the conviction amongst many hire car customers that the whole question of insurance is one rigged up by the car rental companies to rip off their customers by charging over the odds for insurance that fails to cover all of the risks.

How it works

There is practically no country in the world where some basic level of vehicle insurance is not a legal necessity. The requirement is in place in order to meet the justified claims of other road users and members of the public who may have their property damaged or suffer personal injury as the result of a motorist’s actions.

Above and beyond this fundamental consideration is the fact that the vehicle you are renting is likely to represent a considerable value. It is in the car hire company’s and in your own interests, therefore, that the vehicle is also insured against accidental damage, fire and theft.

For reasons such as this, therefore, hire car companies typically include an insurance package in the price of the rental – although you may still be in the dark as to just how much you are paying for the cover, quite what it covers, and how the price compares with similar cover bought elsewhere.

Excess

If there is one subject on the already fraught question of car hire insurance that is even more annoying it is the car rental company’s practice of charging an excess on the insurance provided and, so, offering an excess insurance top-up to keep you covered.

For example, if you hire a car abroad and it is damaged, whether accidentally by you or a third party, your basic car hire insurance should cover the costs – after you have paid an excess amount. As with the excess on traditional home and motor insurance policies, the excess is the first part of any successful claim that you are liable for.

The principal complaints about the excess charged by car rental companies are:

  • the excess amount is often substantial – ranging from several hundred to well over a thousand pounds, depending on the car you are driving and the country in which you are driving it;
  • the excess insurance cover offered by the rental company – usually at the check-in desk itself – is therefore a strong draw, but is invariably charged at a very high daily rate; and
  • even having paid a lot for your excess insurance, there are still areas of damage to the vehicle – typically the roof, tyres, underside and windows – still not covered (so any damage to these you need to pay for yourself).

North America

In North America, the situation for the British driver is potentially still more confusing because of some of the terms used.

The Collision Damage Waiver (CDW), for example, is strictly speaking not an insurance agreement but has the same purpose in indemnifying the renter against accidental damage to the vehicle.

Although indemnity against third party claims for damage or personal injury is also included as a legal requirement in some parts of North America – including some Canadian provinces, for example – the level of cover is surprisingly low. This means that you may still be exposed to a considerable portion of any third party claim. In order to cover this risk, car rental companies in North America may offer something called Supplemental Liability Insurance (SLI).

Excess charges are also applied to insurance cover in North America, although here they are described as “deductibles”.

Specialist insurance providers

Given the widespread confusion, mistrust and doubt that surrounds excess insurance provided by car rental companies, it may be comforting to know that an alternative certainly exists.

This comes in the shape of specialist providers – such as those of us here at BetterSafe – who offer comprehensive excess insurance cover at a price that many may consider far more competitive than policies sold by car rental companies and without the exclusions the latter typically involve.

BetterSafe products offer these benefits, including the choice of cover including both CDW and SLI for those customers intending to drive in North America.

The cover is simply and quickly arranged online and, being bought before you even leave home, means that you arrive at the hire car check-in desk already armed with the cover for which you might otherwise need to pay a substantial amount.

Even further savings may be made by purchasing this type of insurance on an annual rather than a trip by trip basis – and annual cover of course, equips you for car rentals throughout the year on as many occasions as may be.

Must haves

If you have spent the time, care and effort in ensuring that you have secured the best deal on your car rental and the necessary insurance, one of the last things you want to discover as you approach the car hire check-in desk is that you have forgotten any of your must have documents. These include:

  • passports – of course, and you are unlikely to have got this far without them;
  • travel insurance documents – not because they are likely to be a requirement for your renting a car but for your own protection, largely in the event of an accident or illness;
  • a full, valid driving licence – as the government website on driving abroad points out, however, remember that although the minimum age anyone may hold a full driving licence in the UK is 17, the driving age limit may be different in other countries;
  • if you are driving within the EU, your British driving licence will suffice, for other parts of the world, however, you may need to carry an International Driving Permit, which may be obtained at the Post Office but is issued only to those over 18 years of age;
  • if you have hired the vehicle in the UK, but intend to take it out of the country to drive, you need written authority to do so from the rental company in the shape of a Vehicle on Hire Certificate (which effectively replaces the original vehicle registration documents you otherwise have to carry when driving a vehicle you own).

This is a checklist of the most obvious documents you need to carry if you are renting a car. However, it is also important to remember that driving rules and conditions may be entirely different to those you are accustomed to in Britain.

In order to help familiarise yourself with some of those difference, and the practices you will need to follow when driving abroad it may make sense to conduct your own research on the internet, ask friends who have already driven in the countries you plan to visit and, if necessary, ask questions of the Embassy, High Commission or Consulate of the relevant country in the UK.

Good places to start with these researches are the websites for both the AA and the RAC.

Summary

Some things we may be inclined to take for granted or do the same way in which we have done them in the past – the business of renting a car may be just one of those areas worth revisiting to ensure that the best possible deal is achieved.

There is probably little doubt that there are times – whether travelling on business or on holiday – that hiring a car makes sense. It gives you the freedom to go where and when you want at no one else’s beck and call.

There are a number of issues you might want to consider – not least the importance of booking your hire car as early as possible, choosing the most appropriate vehicle for your purposes and watching out for hidden extras invariably charged by many car rental companies.

One of your biggest worries – and certainly one that attracts more than its fair share of criticism by commentators and disgruntled customers alike – may be car hire insurance.

Car rental companies may be less than honest when it comes to selling you insurance, the situation on Collision Damage Waivers (CDW) and Supplemental Liability Insurance (SLI) is probably more confusing for British drivers visiting North America and the selling of excess insurance by hire car companies seems designed to exploit renters’ fears. All of this comes at a cost which many consider to be unreasonably high for the level of insurance protection offered.

Fortunately, there is a ready alternative available through specialist providers who arrange the comprehensive cover you need at a price you are more likely to be able to afford.

So that your travels go without any further hitch, there remain a number of must have documents without which you may not be able to hire car or come to some other harm along the way.


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