How not to become penniless by renting a car

This post is out of line with our usual travel posts. Instead, we want share some info about renting cars with you.
We keep meeting people who are renting cars long-term and complain how expensive it is, so based on both their and our experiences we would like to tell you how you can save a lot of money the next time you rent a car (or camper van).
The first point should be obvious: prices can be deceiving. Always read the details and small print about what you get. This is one place where companies place traps. One important point is the deposit. Make sure that the amount of money they want is actually stated. Here are two options: some (the cheaper) companies tend to actually take the money off your credit card and refund it back to you once you return the vehicle undamaged. While this does not seem to be a big issue in the first place, it (usually) means you don’t get 100% back due to exchange rates. Due to their own interests, they choose the exchange rate that suits them at the time of the transaction, this tends to be a favourable rate when taking the money and an unfavourable one when returning it. Also, if the official rates changes drastically during the rental period, it will directly impact your bank balance. The other and much better (for you) is that the rental company only blocks the money on your credit card. It is still yours but you can’t use it. There are no card fees and no worries about exchange rates.

A couple of other things to watch out for are the fuel policy (full to full is generally the easiest), mileage limitations, additional driver fees which can range be a one off fee or per day and age restrictions (once you are over 25 you don’t need to worry about this). We also found that price comparison websites are often upnto 50% cheaper than going direct but be careful to use a reputable one.

With both rental compamies and comparison sites; read reviews! Website such as Tripadvisor or Trustpilot have plenty of information about car rental companies and spending some time there and doing some research make it easy to avoid the really dodgy rentals. Read carefully though: sometimes it is only staff in certain locations or countries that are to blame. People are also more likely to write a bad review than a moderately good one. As always, some people like to dramatize but we read plenty of stories where vehicles had not been ready until hours later, stank or were dirty so read them, but also apply some common sense.
One of the biggest money makers for the rental company on the extras list is the insurance options. In most countries car hire companies have a collision damage waiver wherby there car is insured, but they can pass on the excess directly to you if necessary. Their car insurance tends to have a hefty excess anywhere from £1000-2000 which is also the deposit they hold during your rental. They offer to reduce the deposit/excess significantly or to zero for a (usually) high daily fee. This money is 100% extra profit for them and probably only good for you if you actually damage the car. These polices never cover everything so you might still have to pay part of the excess unless you take the zero excess option. Many of these extra policies still exclude glass, tire and underbody damage and basically only cover the metal panels of the vehicle.

Our advice is… don’t EVER take one of these policies! Get your own insurance instead! How? The magic is called ‘hire excess insurance’. It means that you give the full deposit to the rental company and then insure it with another, dedicated insurance company. Yes, this is a bit more hassle, but it saves you lots of money. As a bonus, they also cover more and tend to have higher limits than the car rental companies own policies. Most importantly they cover glass and tyre damage; the two things that are most likely to occur. It is important to note that you have to buy the insurance from a company registered in your country of residence, not the country you are travelling in. We had no problem whatsoever buying policies in the UK while travelling overseas. As long as you take them out before you start you hire, your actual loction does not matter. The only downside, is that if some damage occurs, you pay the rental company first and you then have to claim it back from the other insurance in your home country. So again read reviews and choose your insurance wisely.
Here is an example: we rented a camper van from Britz in Perth, Australia for 16 days. We chose them for a combination of good reviews and price. They are not the best, but still pretty good. We paid AU$ 33/day for the van plus AU$ 2/per day for a second driver. The liability was AU$ 5,000 with an excess of AU$250. We could have reduced the liability to zero for the ‘small’ fee of AU$ 45 per day (capped at AUS$2,250 Dollars). For our 16 day this would have cost us a whopping AU$720. Instead, we got our own insurance for these 16 days (£3,000 cover, zero excess) from rentalcover.com. This cover cost us £101 (AU$ 180 at that time). Cost saving compared to the hire company: AU$ 540!
If you are a long term or frequent traveller and plan on hiring cars (not campers!) in multiple locations you can save even more by taking out an annual policy. Check the policy for the maximum overall hire allowance though! Keep in mind that the liability/deposit required varies in different places so you might need to increase that temporarily.


Our other example: we have booked a hire car for 5 weeks in New Zealand. Reducing the standard NZ$2,000 liability to NZ$200 ($50 excess) would cost NZ$16/day. For our 41 days it would cost us NZ$656. Instead we took out a multi-car rental annual excess insurance (cover up to £3,000) with Carhireexcess.com. This policy came with the price tag of just £40. As an added bonus we could use this policy to cover the excess on our car rentals in Surfers Paradise and Auckland. For comparison: taking out an insurance for these 41 days rentalcover.com would have costed £230. Still a saving of £426, but the annual policy beats this by a mile!
Please note that these prices are only examples and vary depending on companies and circumstances. As with all insurance policies please read the small print and look out for geographical restrictions as a common exclusion is renting in your home country.

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