Holiday car rental insurance: is it all a big scam?

Read this before you hire a car overseas

Ever got to an airport to pick up a rental car and been put under pressure to buy more car insurance and other extras? You are not alone.

In a recent car hire survey by Which?, under half of people arriving in Spain felt under pressure to buy more insurance at the car rental desk and 86% said they were worried about getting ripped off when hiring a vehicle.

Car rental firms we have contacted have failed to deny that staff are incentivised to sell customers extras on arrival, whether they need them or not.

According to Which?, there’s no requirement to buy extra insurance in Europe. Basic insurance is included in the rental – but be aware that you will have to pay the excess in the event of a bump or scrape.

The survey said that pressure selling is an endemic problem in this industry, even though it’s a criminal offence. So, isn’t it time car hire was made simpler? Is there a gap in the market for a car hire firm which clearly explains the ins and outs to holiday makers and doesn’t put them under pressure when they feel most vulnerable? Or are we just not reading the small print?

Booking directly with the rental provider and not a third party agent could be the answer, according to one car rental firm, who told us: “Europcar always recommends that customers book direct – that way all the information about the rental and the additional services that the customer has the option to purchase are provided.”

In our own experience, we’ve been put under pressure to buy extras every time we’ve hired a car on arrival in Spain, despite having paid extra for ‘premium’ or ‘full protection’ insurance at time of booking, whether via Holiday Autos, Ryanair or Booking.com. Interestingly, it hasn’t been the case when hiring a car in France, when we’ve never experienced any hard sell.

We’ve seen many a holidaymaker arrive and be surprised at the size of deposit they’re asked to leave when picking up their car, mainly because they’ve not read the small print at time of booking. It’s there, but it’s well hidden in ‘important info’ (see below).

For that reason, we’ve always chosen our car provider carefully and opted for a well-known one with favourable reviews and lower deposits. With Budget, the deposit was just €200, as opposed to €1,000+, which you may experience with other companies.

On the last three times on arriving at Girona Costa Brava Airport in northern east Spain, the pressure to buy additional insurance has been significant – and we’ve experienced the same at Barcelona.

In September this year, the group of young females in front of us in the queue at the Budget desk was told the insurance they had didn’t cover the windows of their hire car, hence bought additional insurance.

That may well have been the case, but if it had been made clearer to them at the time of booking, they wouldn’t have had that surprise on arrival. It begs the question of what if someone is arriving on a tight budget and hasn’t allowed for unexpected costs? Or are we all not paying enough attention when we book?

My own experience was not without issue either. I always pay extra for ‘premium’ or ‘full protection insurance’ at time of booking. This year I did so via Holiday Autos and was sent a reassuring confirmation email which stated the following: “The AXA policy covers you for this rental. You do not need to purchase another policy to cover your excess at the desk.”

I felt confident that I wouldn’t be asked to buy anything else on arrival. However, staff at the Budget desk at Girona Airport said that, if I spent an extra €7 per day, I would get reimbursed more quickly in the event of an accident, than with the insurance I had bought.

Fair enough, close inspection of my Axa policy showed that, in the event of an accident, I would have to pay myself and then claim the amount back from my insurers, and who knows how long that would take.

So, while the staff at the Budget desk at Girona may have had a point, one has to ask why it’s not simpler to buy full, thorough and finite insurance from the get-go, therefore preventing the minefield one has to tiptoe through on arrival at your destination airport.

Last summer, we were put under pressure to buy additional insurance simply because, in the words of the car rental desk staff member, the insurance I had bought was with another company and not with them.

The Sun Lounger asked Holiday Autos, Europcar, Hertz, Budget and Avis (the latter two being part of Avis Budget Group) four questions:

1. Why, when a person has bought full insurance on a hire car, are they often/always asked to buy another policy on arrival?
2. Why is full insurance, bought before a trip, not enough?
3. Do you know if car rental staff incentivised/set targets re how many sales they make?
4. Do you have any tips re making sure you have bought the correct policy before arrival?

Budget/Avis declined to comment. See below for what the others said.

CarTrawler, the owner of Holiday Autos: 

“We are committed to providing a positive car rental experience for all our customers. We encourage customers to thoroughly review the terms and conditions of their booking prior to travel to ensure they fully understand their insurance coverage. If any queries or issues arise, our 24/7 customer care team is always available to help.”

Europcar was the only car rental firm to provide a response, which was very thorough:

“When you hire a car in Europe, a collision damage waiver (CDW) is included as standard. With CDW, you’re not liable for the full cost of the rental car — even if it’s written off in a crash. Instead, you pay towards repairs up to an agreed excess — usually around £1,200. 

“For customers who wish to reduce this liability they can purchase an excess waiver from the rental provider which means, should they have an accident, they will not have to pay the excess. 

“Alternatively, the customer can purchase an excess waiver separately. For customers who make this choice, they will need to provide a credit card to secure a deposit for the vehicle. The deposit is not taken from the card but it is held against the card holder’s credit limit and returned when the vehicle is returned.

“If the customer has an accident, then they will be required to pay for the damages to the rental company and then claim the amount back from their insurance company. The rental provider’s excess waiver eliminates the hassle. 

They added: “The company’s agents are trained to explain the options for the excess waiver at the start of the rental. Depending on the location and brand, some rental agents in Europcar Mobility Group are paid for additional services they sell to customers.

“However, this behaviour is closely monitored through Net Promoter Scores and those agents who have NPS negative results are held accountable.”

The Sun Lounger’s tips for renting a car abroad:

Consider buying your own insurance

To enable you to say no at the rental desk, Which? suggests buying your own excess reimbursement policy online from a trusted care hire insurance provider. You then need to explain that you don’t want any extra cover at the desk and that you understand the need to pay up to the excess limit if you damage the car (you can claim this back). 

Hire directly with the car rental company and not via a third party agent

While it may appear less complicated to book your car hire via the airline or accommodation provider, both Which? and some hire companies say that you get a better deal and are better informed when booking directly.

That’s something I tried to do this summer, but gave up when I couldn’t find mention of the size of deposit I would have to leave when collecting the vehicle and booked with Holiday Autos instead.

What you see is unlikely to be what you’ll get

If you’ve booked a Fiat 500, Opel Mokka or VW T-Cross, for example, the chances are that isn’t the car you’ll get on arrival. That is purely a guideline and it does say ‘or similar’ in the small print when you book.

We once booked a Jaguar F-Pace (or similar) for a special occasion, but ended up driving away in a Seat Leon.

The first price you see is not what you will eventually pay

When booking, you may initially think you’re getting a great price, but, much like adding seats and luggage to your flight, the end price will inevitably be considerably more.

Keep an eye on price fluctuations

We booked a car for a week for around £500, but noticed that, closer to the time of booking, the priced had dropped by almost 50%. You can quickly and easily cancel your booking, so book first, to avoid disappointment, but keep an eye on prices to see if there are savings to be made.

How soon do you receive a refund of your deposit on returning the car?

You need to have available funds to cover the deposit on your bank card when picking your hire car, but this is held in pending transactions and not debited from your account. Therefore, you won’t get a refund at the end of the hire period, subject to it being returned in the same condition as when you picked it up. It will simply disappear from your pending transactions.

Can you use a debit card when leaving a deposit for your hire car?

Check the small print prior to booking, as some companies may want one or even two credit cards, as opposed to a debit card, when you pick your rental up. Don’t do what I did and transfer all of your holiday spends on to a prepaid debit card, such as the Post Office Travel Money Card, as these may not be accepted.

Check where the rental desk is

After you’ve taken a transfer bus from your car to the departure airport, elbowed your way off the plane amongst those who stand up as soon as the plane lands and potentially queued to get through passport control, the last thing you may want to do is get on a hot transfer bus, with all of your luggage, to get to the car rental desk.

While some are located in the terminal and others just outside, some can be further away. Check before you book but don’t assume it will be in the terminal.

Be prepared to wait when you get there

One of the reasons I book a front row seat on the plane and try to have hand luggage is so that I can get off reasonably quickly and therefore not be at the back of the queue at the rental desk, which is, in my experience, often understaffed.

If you have a set time to get to your holiday accommodation, bear this in mind.

This September, the Budget rental office at Girona Airport had just one member of staff in it, on arrival. The office quickly became crammed with adults, their children and luggage and, every time the staff member showed holidaymakers to their hire car, he had to ask those in the queue to go back outside while he locked the office, then unlocked it again, served another… and so it continued.

Finally, read, read and then read again your policy terms, so that you are fully in the know and can say no with confidence when asked to buy additional insurance, on arrival.

What to do if you get scammed by a car hire company

Which? says that, if you think you’ve been ripped off by a car rental company overseas, you should do the following:

• Ask the company for an explanation of any additional charges and supporting documents. If you’re not happy with the explanation, tell the company the money has been taken ‘under protest’ and inform your card company about the dispute.
• If you paid by credit card you can make a claim against the card provider under section 75 of the Consumer Credit Act.
• If you paid by debit card, you can ask your card company to use the chargeback system to reverse the payment and give you your money back.
• For complaints about car hire in Europe, try the European Car Rental Conciliation Service (ECRCS), whom we approached for a comment, but didn’t receive a reply. This is a free service and helps with unresolved disputes. The ECRS can get refunds for incorrect charges, but will only deal with complaints about its member companies.

The answer? What should be simple, in our view, really isn’t. Next year, I am considering driving to Spain I my own car, which I’ve done before and enjoyed. We can stop off en route and enjoy the wonders of France, and the cost of fuel, crossings and tolls will be much the same as the cost of the hire car and flight combined. Anything for an easy life!

Have you had a bd experience when renting a car overseas? Let us know in comments.

Photo by Jamie Street on Unsplash