Rental cars are costly. If the upfront hire fees aren’t enough, there are lots of other charges that can double the cost. That can be anything from increased insurance costs to reduce excesses, to hiring a child seat.
If you know how the system works, however, it’s possible to minimise costs.
If you’re booking a hire car, the first thing to do is to use comparison engines that list more than one rental car company……more>
Now your company can cover ALL the eligible aged drivers employed in your company.
Yes, that’s right, why pay the car rental company’s expensive corporate excess insurance rate when you can use Tripcover’s much cheaper car rental excess insurance.
Simply have the car rental agreement in your company’s name and away you go.
Reduce your corporate rate with the car rental company and save. Just let them know that
you do not need their CDW or Collision Damage Waiver to cover your company’s excess
anymore and each time you take a rental out get one of our policies for the employee.
When renting a car in Australia or New Zealand, it is very important to have quality car rental excess insurance coverage for the vehicle. You have several options available, and by comparing and contrasting the different types of insurance, you can have a better idea of what you might need.
Credit Card
Many times, the credit cards you already have in your wallet will actually have collision coverage included on them. If you choose the right credit card to pay for the rental, you could actually receive coverage with zero deductible, or at least a very low deductible. This is quite different from the high cost of insurance through the car rental companies. The right card has the potential to provide coverage for the costs for which you might be liable, such as damage to the car, or even a theft but a lot of times does not cover the general exclusions such as windscreen, tyres, single vehicle accidents or undercarriage damage.
Another issue is that some that use this method of coverage for their rental vehicles have is that it can be a hassle to deal with the credit card companies. Still, given the amount that you could possibly save in the event of an accident, it does make sense at least to consider utilizing credit card coverage for the rental.
Make sure that your credit card company offers this type of coverage, as some do and some do not. Look through the policies regarding the coverage it offers, and make sure it is applicable in Australia or New Zealand – or any country you might be visiting for that matter.
Standard Travel Insurance
In some cases, you may also have collision coverage available through your travel company. If you buy a travel insurance policy for your vacation through many companies in Australia and New Zealand, you will have the option of adding on insurance for your car rentals. However, it is important to make sure that the travel insurance policy that you are considering using actually cover all the normal exclusions that the car rental companies exclude, such as windscreens and single vehicle accidents.
Dedicated Car Rental Excess Insurance
Of course, there’s always the option of buying your car rental excess cover (usually called CDW or Collision Damage Waiver) from the car rental company. This is something they will actually encourage you to do. It’s a simple solution since you can do it right at the counter. However, that does not necessarily mean it is the best solution. The cost of the insurance through the company is expensive, and could be close to the cost of the rental itself, which could double your overall expenditure. When you buy insurance through the rental company, you should not think that it will automatically cover the entire cost of damage or theft. Look at what your excess or deductible will be. It can be in the thousands in many cases. Car rental companies will sometimes offer an additional form of coverage that will drop the deductible to zero. Of course, this adds to the cost of your rental substantially.
Dedicated car rental excess cover is also offered now by such companies as Tripcover and this can be less than half the cost of the car rental companies’ rates.
However there is also the hassle of making a claim with their insurance provider Allianz Global Assistance in the event of an accident.
Take the time to research all of your options for your car rental insurance, and then choose the one that makes the best financial sense for you.
Resources:
https://www.ricksteves.com/travel-tips/transportation/car-rental-cdw
http://www.tripadvisor.com.au/ShowTopic-g255103-i531-k5982489-Car_rental_excess_reduction_Tripcover-Perth_Greater_Perth_Western_Australia.html
Many people use their credit cards to cover their rental car excess. Renters assume that they are fully covered, but are they really?
Let’s have a closer look at ANZ’s actual car rental cover policy, which a Tripcover customer brought to our attention, asking if they should still take out a Tripcover policy or use the ANZ rental car coverage.
What’s covered and what not by ANZ credit cards?
Here’s the thing, most of the large car rental companies, such as Thrifty, have what they describe as a “standard excess”. This excess covers basic damage to the car if it involved in a multi car accident or is stolen, for example. Though there are a number of items not included in the standard excess, and that’s the loophole in credit card travel insurance.
Hence it becomes a problem for anyone who is relying on their ANZ credit card insurance (or other credit cards aswell) because items such as windscreens, tyre damage, undercarriage damage are not considered to actually be part of the excess.
On top of that, most rental firms in Australia have an excess amount between $3500 and $4000. The ANZ car rental cover falls short by nearly $2000.
ANZ only covers $2050 excess.
The above screen grab from the ANZ Car Rental Cover terms and conditions, shows the maximum excess insured is just $2400, minus the applicable policy excess, leaves the rental customer will only $2050 maximum coverage. So if the rental car excess is $4000, then there is a gap of $1950 to pay. Ouch!
Single Vehicle Accidents are not covered by ANZ
In the above screen grab from ANZ’s terms and conditions, you will notice two things. Firstly that the coverage only includes items covered under the collision excess, and as mentioned earlier there are multiple items that rental companies do not include in their excess, but still charge you for, like windscreen and tyre damage etc.
Secondly you’ll notice that Single Vehicle accidents aren’t covered by the ANZ policy, which effectively means, if you damage the car in a car park against a static item or you hit a kangaroo on the open road, you wont be covered because there is only one vehicle involved in the accident, namely you!
As we previously wrote in our blog post about the pros and cons of car rental insurance via credit cards, there are benefits to using credit cards, especially if you choose the right credit card to pay for the rental, you could actually receive coverage with zero deductible. That being said, its worth looking into the detail, as we have done here with ANZ, to really understand what level of coverage you do have, as opposed to assuming you’re covered, and then being surprised when there is a sizable gap in the coverage.
For everyone that has rented a car in the past or are going to rent a car in the future you might like this little skit from Seinfeld:
Before you take the key, know what your damage liability is.
When booking a car rental, the price you believe you are paying and the price you actually pay by the time you complete the rental process might be quite different. You may book online and think that you are getting a great deal for a car for $175 for a full week only to walk out of the rental office paying more than double that. What happened? When you consider the addition of all of those extraneous and outside fees, the price of renting really can start to pile up quite quickly and it’s a sinking feeling. Let’s look at some of the things that can push the price, so you will have a better idea of what you need to be watching for with quotes and so you can avoid that sinking feeling.
You always need to consider taxes when you are renting a vehicle. It doesn’t matter where you are, there will always be taxes associated with the final cost so make sure you know the taxes in your area and estimate those if the quote does not already do that for you. Keep in mind that in addition to the state taxes, there can also be local taxes. Picking up a rental car in many Australian airports actually costs between 16% and 20% more than picking them up at a downtown location would cost. If you plan to rent for a longer period, it simply makes more sense to pick up from a downtown location instead, as it will save quite a bit of money.
Many times, a rental agency will charge your credit card a deposit when you rent. The amount will vary based on the company from which you rent. They will return the amount of the deposit after you return the vehicle, so long as there is no damage to the vehicle and you have not misused it in any way. An example of misuse might be smoking in the vehicle, for example. The deposit fees in Australia and New Zealand are generally between $100 and $500. You need to have at least that much available on your credit card.
Of course, you also need to think about insurance. If you have your own car or travel insurance, then there is a chance that you will not have to pay auto insurance through the rental company. However, this is something you need to consider quite carefully. It might be a good idea to choose a collision damage waiver or loss damage waiver so if anything happens to the vehicle you are not responsible for the repairs. In Australia, the rental car excess fee can be as high as AU$4-6,000. It can be very difficult to understand exactly what your insurance will and will not cover. By choosing the insurance through the rental company, it can also remove some of the burden from your own insurance policy. It’s a badly kept secret that car rental firms tend to charge excessive prices to insure the excess, and this is often as much, if not more than, the rental car cost itself. Keep that in mind and consider some of the online alternatives to insure your car rental excess (see comparison between Europcar and Tripcover below*). As always, it is very important to read the fine print on the insurance from the renal firm or other providers– yours and that offered by the car rental company – before you make your final decision.
Car rental excess reduction fees from Europcar versus Tripcover
* As mentioned above it can be very complicated to understand the rental car company actually covers. This table has four options from Europcar, with the bottom option being not to cover the excess of $4500. The 2nd option (CDW) reduces the excess liability from $4500 to $990. And if we look at the premium option, called GoZen, this reduces the excess liability to $0 although will set you back $301 for a 7 day rental. Compared to the Tripcover.com.au product, GoZen costs 4 x more and covers less items, given overhead and undercarriage options are not covered. Whereas with Tripcover damage liability to these areas of the rental car are covered up to $4000.
Another cost that you the quote really won’t cover is the cost of petrol. Not only will you have to calculate the cost of petrol on your trip, you also have to calculate how much the rental company requires you to place in the vehicle before you return it. Most often, you need to return a full tank, given the Australian rental companies tend to fill the car up before the rental starts. Find a petrol station and fill up before you drop off the car, otherwise the company will charge 2-3 times higher price per litre, if they have to fill up for you.
If you return the vehicle to a different location or city for any reason, there will generally be an added drop off charge. Those who plan to drop off at another location should check their online car rental quote to see if a one-way fee is charged and how much it is. It should be displayed in the actual online quote. If you book on the phone or through a broker make sure to talk with the rental company and let them know it’s a one way rental, and also ask about these fees to get the full picture of how much you will have to pay.
When renting a car in Australia or New Zealand, it is very important to have quality insurance coverage for the vehicle. You have several options available, and by comparing and contrasting the different types of insurance, you can have a better idea of what you might need.
Many times, the credit cards you already have in your wallet will actually have collision coverage included on them. If you choose the right credit card to pay for the rental, you could actually receive coverage with zero deductible, or at least a very low deductible. This is quite different from the high cost of insurance through the car rental companies. The right card has the potential to provide coverage for any of the costs for which you might be liable, such as damage to the car, or even a theft.
Still, given the amount that you could possibly save in the event of an accident, it does make sense at least to consider utilizing credit card coverage for the rental.
Make sure that your credit card company offers this type of coverage, as some do and some do not. Look through the policies regarding the coverage it offers, and make sure it is applicable in Australia or New Zealand – or any country you might be visiting for that matter.
In some cases, you may also have collision coverage available through your travel company. If you buy a travel insurance policy for your vacation through many companies in Australia and New Zealand, you will have the option of adding on insurance for your car rentals. However, it is important to make sure that the amount of excess coverage is high enough (at least $4000) and check the fine print for exclusions. Similar to credit card cover, travel insurance often only covers the rental company’s standard damage and CDW. For example when renting with Thrifty the standard damage does not include windscreen, undercarriage, single vehicle accidents and hail damage. In this case if your travel insurance only covers standard damage, then it won’t be enough to cover these items.
Of course, there’s always the option of buying your rental insurance right through the car rental company. This is something they will actually encourage you to do. It’s a simple solution since you can do it right at the counter. However, that does not necessarily mean it is the best solution. The cost of the insurance through the company is expensive, and could be close to the cost of the rental itself, which could double your overall expenditure. When you buy insurance through the rental company, you should not think that it will automatically cover the entire cost of damage or theft. Look at what you’re deductible or excess will be. It can be in the thousands in many cases and often you need to buy the premium coverage option to be fully covered and reduce your excess to zero.
A newer and lesser known alternative to credit cards, travel insurance and insurance direct with rental companies, is car rental reimbursement insurance. It works very similar to the rental company’s cover, however it costs significantly less, as low as $6.77 per day for a seven day rental, and can be purchased independent of the rental company. This mean that if you damage the rental car, the rental company will still deduct the applicable excess amount from your credit card, however if you have purchased a reimbursement policy, then you receive a refund within 10 days of the claim being made, provided you have driven the car within terms and conditions of the rental contract.
Australia first car rental reimbursement cover provider is Tripcover.com.au, which offers such cover for Australian resident travelling in Australia and around the world, as well as cover to international visitors to Australia. A rental car insurance for New Zealand residents is also available. The products are created and managed in partnership with Allianz Global Assistance.
Take the time to research all of your options for your car rental insurance, and then choose the one that makes the best financial and coverage sense for you.
The CDW, or collision damage waiver, that the car rental companies offer is not actually a type of insurance, although many people mistake it for such. Instead, it is a waiver, which means the rental company will waive their right to collect a massive deductible from you if you happen to damage their vehicle. The waiver does not remove the deductible entirely. It will lower it though, and since they are generally so high with car rental companies, this might seem like a good deal at the outset.
The price of the CDW varies from company to company, naturally. The average price tends to hover around $26 AUD, but it could be higher depending on the company you choose. If you are renting a vehicle for a full week, then you can expect to pay around $188 AUD on the waiver at least.
Some see the CDW as being a waste of money, and when you consider just how expensive it can be, it’s easy to see that reasoning. However, those who do not have supplemental insurance to cover collision damage could be in for a rude surprise if they damage the vehicle. The cost of the deductible, in the Australian market, can be as high as $6000. The insurance companies charge high rates because they know that people will often pay them so they can reduce the deductible, and that consumers are often ignorant of other options, such as excess reimbursement insurance.
One of the other things to consider with the CDWs is that they may have coverage gaps. This means that they might not cover damage to certain parts of the vehicle, such as the windshield, for example.
See the below table which illustrates what Thrifty Australia covers as a standard cover, compared to their two CDW options over a 7 day rental. In the 4th column is a comparison with Australia’s leading car rental excess reimbursement insurance from Tripcover.com.au
Some people automatically buy the CDW and just factor it into the cost whenever they rent a vehicle. However, that might not always be necessary. In fact, many times, the insurance policy for your regular everyday vehicle might extend to rental cars. This usually isn’t the care in Australia, but often is in the US. In this case, if your deductible on your regular policy is better than the CDW, and you do not have to pay for it, then simply using your current insurance is a smarter and more cost effective option.
There are several alternatives to buying the CDW, are your travel insurance policy and your credit card company. Some credit card companies offer collision damage coverage free to their users. Others may charge a small fee. They can cover more than just the collision damage as well. If you have a travel insurance policy for your trip, it will generally have some type of car insurance included along with it. However be very careful with this option, given standard travel insurance policies tend to cover only the “standard damage” covered by the rental company CDW. So if you look at the third column from the left of Thrifty’s coverage, these are the only things that are covered by standard CDW e.g. windscreen, undercarriage and hail damage are all not covered by the standard Thrify CDW, hence unless your travel insurance policy explicitly says that it covers “windscreen, undercarriage and hail damage” then chances are that you wont be covered.
While choosing or not choosing the CDW is ultimately your decision, some far better alternatives are out there that will help you save money and actually provide you with better coverage. Always look at all of your options before you simply buy what the rental company tells you do buy.
Reimbursement Cover: In the event that the rental vehicle is stolen or damaged, the rental car company will charge your credit card for the excess or gap amount. You can then claim for reimbursement under your Tripcover Rental Vehicle Excess Reduction and Luggage Insurance policy underwritten Allianz Global Assistance. Your claim will be processed within 10 business days of receiving completed documentation.
We’ve all been there before. All you want is to get your apple pie, but they make you pay for a whole buffet just so you can get that one item you really want. While renting a car is quite different from having a meal, this actually does still apply.
Anyone who has ever tried to rent a vehicle knows that when they head to the rental counter, there will be a tug of war between your wallet and the company. They will tell you that you need to have A. B, and C, when the only thing you want to do is get into your rental and drive off the lot.
Of course, if you are not careful, you will be paying far more than you imagine before you get to drive away. Instead of paying for that whole buffet, let’s look at some tips you can use to help keep the costs down so you are only paying for what you really want and need.
The first thing you need to do is to think about what you really need from the rental. How and where will you be using the vehicle, and how many people will be traveling with you. When you are renting, choose the vehicle that meets your needs, but that does not exceed them. This will allow you to choose cheaper cars in most cases.
Some rental companies will offer an upgrade, but this is rare. It still does not hurt to ask though. Just make sure that they do not talk you into getting a larger vehicle than you need. They will usually try.
If you have coverage through a credit card, or through your travel company, then you might not need to have additional coverage through the rental company. Make sure that you know the policies regarding your credit card’s insurance offerings and see if it is enough to cover your rental requirements e.g. rental excess, that windscreens are covered, single vehicle accidents and undercarriage damage. If they are not listed as covered then they are probably not. This can help you save a substantial amount of money.
Something else you may want to do is check online for discount codes. These can save you a fair bit of money in some cases. Not all car rental companies will have coupons available, but it is worth checking. They may offer a discount, or they could offer a free upgrade. If you were to get an upgrade, though, be aware that other costs could be higher as well. For example, if you were to rent an SUV, the cost of petrol would be more simply because you use more while driving and need to fill up more often.
Know What You Are Buying
Always take the time to read the fine print of your rental contract to know what you are paying for. If you find any tacked on elements that you do not need, make sure that you talk with the rental company about removing them before you sign and pay for the rental. With some attention to the minute details, you can make sure you are getting just the pie and not all the broccoli that you don’t want!
Had similar car rental experiences? share them with other readers.