Car Rental Charges Explained By Industry Insider…

Car Rental Charges Explained By Industry Insider…

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Prevent additional credit card charges on car rental.

First of all, you must understand how the total price you pay is calculated. Everything starts with the daily base rate this is the rate you pay for the daily use of the car excluding all other charges. It doesnt mean that this is the price you pay!

Instead, you may find your total bill is double of that of the base rate. Extra mandatory charges like GST, airport location surcharges, administration fees, vehicle registration fees are all part of the total bill given to you at the rental counter. I cant stress enough the importance of getting a bill at the end of your rental, but this is another story. So, by the time all the extra charges are added onto your bill, you may find yourself paying almost double that seductive base rate.

To give you an example, a friend of mine rented a car in Australia with a base rate around $177 for four days. The final total? Including a vehicle registration fee, admin fee, airport location surcharge, a surcharge for not filling the gas tank, and a GST on top of all those other charges, my friend paid about $358 – more than a 100 percent increase over the base rate.

So how can you avoid nasty surprises? Below you can find a list of standard surcharges you’re most likely to find at most car rental locations in Australia, as well as some tips for your next trip to the car rental counter.

Airport and GST Surcharges

The majority of car rental transactions happen at the airports around the country. Airport surcharge is something that car rental supplier has no control over and it varies considerably from one airport to another. Therefore, when you pick the car up from the airport you should expect to pay between 3 and 18 percent extra on top of other charges. Unfortunately, you can’t avoid paying GST, which can will add 10 percent. However, if your car rental bill amounts to over $300 and you leave the country within 30 days after returning the car, you may claim GST component of your car rental at the airport.

However, you can avoid the airport charges – such as airport location surcharge fees by picking up and dropping off your car at an off-airport location. Be sure to weigh the possible inconvenience and the price of any additional transportation against the concession fees charged by the airport location – which can be between 3 and 18 percent of your total price.

The bottom line? If you don’t want to pay the airport location surcharge, check out your rental options downtown.

Insurance

Your rental car comes with a standard insurance liability of between $2900 and $3300 depending on a car rental supplier. This liability can be further reduced by paying an extra daily charge of between $25 and $27. However, since the price of insurance is almost half of what you pay for you car, I recommend that you check your credit card/travel/car insurance to make sure it doesnt cover you in a rental car.

Gasoline Charges

For your convenience most car rental companies provide cars with a full tank of fuel, however, be assured that if you dont return the car with a full tank you will pay a higher price for petrol used to fill up the empty tank. However, most car rental companies now offer the option of purchasing a full tank of gas when you first take the car, enabling you to return the car with as much or as little fuel as you wish.

Please note that there is no refund for unused fuel, so its likely youll be paying a little extra for the convenience of skipping the trip to the gas station.

Drop-Off Charges

An extra fee is usually charged if a car is returned to a different location than where it was picked up. This fee varies by location; in some instances there is no charge, while you could pay $300 or more for cross-country drop-offs. However, some companies do not require a charge when dropping off in-state at many Queensland and New South Wales locations.

The 24-Hour Clock

Car rental industry operates on a 24-hour clock rate. However, there is also a 59-minute grace period before hourly charges apply. To give you an example, if you rent a car at 12:00pm on Tuesday and return it by 12:59pm on Wednesday, you will be charged for one day only. However, if you return the car after 27 hours (in this case after 15:00) you’ll then be charged for the full extra day. Hourly charges apply between 25-27 hours.

Early Returns

When you rent a car for a particular number of days, you sign a sale contract for that period. So, just like with any other contracts out there, if you break your contract you must pay cancellation fees. Since, car rental companies set their rates based on the rental period, the longer you keep the car the cheaper the daily base rate. If you managed to reserve a car for 7 days using one of these hot weekly specials and then decide to bring the car two days earlier, you might get charged at a default daily rate and your total car rental charge for 5 days might end up costing you more than if you kept the car for 7 days. Therefore, please dont forget to ask a car rental agent if you pay different daily rate for earlier returns.

Mileage

Most car rental companies offer unlimited mileage in metropolitan areas, including all major capital cities (with an exception of Northern Territory) and some tourist destinations. I would suggest checking your contract prior to signing it as it clearly displays whether you get unlimited kilometres or not. Keep in mind though that smaller car rental companies usually charge mileage if you exceed a given daily km quota. In addition some “hot” special rates may not include unlimited mileage, so be sure to check before you sign a rental agreement.

Vehicle Registration Fees

Varying Rates and Peak Season Surcharges

Here is a tip that will potentially can save you hundreds of dollars. Book in advance!
Rental car companies’ rates vary a great deal from city to city, and sometimes even within the same city. Make sure to shop around. Be aware that you may pay a specific surcharge for traveling at a “peak” time, e.g. School and Public Holidays, Major events in your city, etc.

Age Penalties

Due to the insurance limitations, if you’re under 25, you may have to pay an additional fee, usually about $25 per day. Those companies who will rent to drivers under 21 often charge much steeper surcharges. Internationally, you’ll not only see penalties for underage drivers but also for older ones — those over 70 may have to pay extra (if they’re able to rent at all).

Additional Drivers

Adding more than one driver to your rental agreement often carries a surcharge, anywhere between $7 and $25 per day. Note that some companies, like Avis and Budget, will allow the renter’s spouse or life partner to drive the vehicle for no extra charge — so if both partners are planning to take the wheel, consider renting from one of these providers.

Frequent Flier Fees

Car rental companies often charge a small fee when you request frequent flier miles for your rental. The fee varies by airline, and can range anywhere from a few cents to $2 a day.

Extras

There may also be additional charges for things you had not considered, like infant and child seat rentals, roof racks and other extras. These could run you anywhere from $5 to $25 or more per day, depending on where you rent.

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