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Renting a car? Beware of the fuel reclamation rip-off

May 8, 2008

With fuel prices near $4 a gallon, car rental companies are turning to a little-known practice called gas reclamation to squeeze every last penny from their vehicles. In the process, they may be squeezing their customers too, according to a car rental insider who has performed degassing services for a major agency.

Here’s how degassing works: Whenever a rental car is retired because it’s been damaged or its lease expires, a car rental company hires a subcontractor to siphon off some of the expensive fuel left in its tank. Here’s a recent article about a gas reclaiming service in a trade journal, Auto Rental News.

At the current fuel price, a car rental location at a major airport could be recovering as much as $320,000 a year by using a gas reclamation service. Some of that is your money, says my degasser source.

The subcontractor performing the degassing service is paid $1 per gallon to degas the car. The car rental company then refuels other rentals with it. But why charge your customers a top-off fee and a refueling fee when you know that the car is on return? The barcode scanner they use when you return the car tells them if the lease is up.

The answer is simple: because they can.

My source recommends that you ask about the gas in your tank the next time you rent a car. If you have a high-mileage vehicle and suspect the car’s lease might be up, or if the vehicle has been damaged and is likely to be sold at auction, you may be entitled to a refund for the gas in the tank. With the cost of refueling some larger vehicles approaching $100 a tank, it’s worth an inquiry.

I’m far more worried about the other potential uses of a fuel reclamation device. What if a car rental company could siphon just a fraction of a tank of gas from every topped-off car rental that’s been returned? A renter would never know, and with gas prices rising ever day, such siphoning shenanigans would translate into pure profit.

Christopher Elliott is the author of Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals. Critics have called it “eye-opening” and “inspiring” — it’ll “grab your attention and won’t let go.” Order your copy now on Amazon, Barnes & Noble or iTunes.

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29 comments

  • http://richi.co.uk/ Richi Jennings

    Elliott, your stuff is usually clear and insightful, but this one isn’t making sense to me. How is this a “rip-off”?

    If I rent a car with a full tank and return it full, it’s not “my” fuel in the tank, it’s the rental company’s. Not my concern what they do with it after I’ve returned it.

    Alternatively, if I buy the fuel in the tank when I rent it, it’s my stupid fault if I don’t return it empty. Again, not my concern if they siphon it off.

    Of course, the refueling charges if I don’t return it full are a rip off, but that’s old news, right?

    richi.
    http://www.richij.com

  • Christopher Elliott

    You’re right, I think most people would agree that it is the rental company’s fuel. My insider believes otherwise, and I have given him an opportunity to share that view.

    What’s far more disturbing to me is the potential for these siphoning devices to be used for less than honorable purposes by car rental companies, as described in the last paragraph.

  • Kairho

    First of all, siphoning devices have been around for a lot longer than have automobiles. If the rental companies wanted to take a bit off the top they would have been doing it for the past 50 years.

    Second, the first time a new car is rented the company starts it off with a full tank. Each renter refills the tank to cover the fuel used during the rental. After the last rental the tank is once again full … just as it was at the start. That tank of fuel belongs to the company and was effectively “banked” for a time. If the company realizes a financial gain, so be it. I think there are better things to be concerned about than a company keeping its fuel inventory in its rolling stock.

  • SirWired

    Chris, I hate to say it, but this post and the last one on travel vaccinations have not been up to your usual high standards…

    The car starts out with a full tank of gas, I return it with a full tank of gas, end of story. If the car rental company wants to dump it on the ground and set it on fire, that is fine with me. If they want to pump it out of the tank before getting rid of the car, that’s just fine too. How does that rip the customer off?

    SirWired

  • Christopher Elliott

    Uh-oh, my commenters hate me today.

    I disagree that car rental companies would have been doing this all along. With fuel prices at $4 a gallon, that’s enough incentive to make them consider siphoning.

    Regarding whose fuel it is, let me reiterate — I believe most people feel it’s the car rental company’s fuel. My insider disagrees; I let him have his say.

    My concern is what these devices could be used for beyond repurposing fuel in vehicles that are about to be retired.

  • Chicky

    Chris, I get what you’re saying in the last couple of grafs. Means I could return a car with the tank brim-full, then with these siphoning devices, they could suck out a gallon or two and charge my credit card with a nice, fat refueling charge. So then, I’d have to save my receipts, bring them back to the rental office and dispute the charge. Yes, the potential for abuse certainly exists.

    It’s actually a good thought that rental companies are refilling other cars with this fuel, rather than wasting it in some way. However, once I return the car, it’s none of my business what they do with the gas, or the car, for that matter.

    I’m renting a car in a couple of weeks. Believe me, I’ll save my last refueling receipt and watch my credit card statement.

  • Joe Farrell

    You mean every time I need to ask the car rental company if they intend to take my car off lease when I return it?

    Practically speaking Chris, this particular blog is worthless.

    The person being ripped off is not the person returning the damages or off lease car but the person who returned another car and was charged a fueling fee who get the transferred gas used. Even then, the fuel belongs to the company which owns / leases the car, not the person who took it out full and brought it back full.

    I tend to worry about things in the real world, not the travel troubleshooter oh my look what can happen world.

    Be that as it may, the companies ALREADY charge top-off fees that are never filled – and probably local companies probably do siphon some off for their own personal cars and charge the person returning it – that type of thievery has been around as long as there were travelers taking horse oats and transferring it to their own beast.

  • Christopher Elliott

    My fans love me today. ;-)

  • Doug

    I for one thank you for posting this information. When I’m on a TV game show and the million dollar question is “What do car rental companies do with the gas that’s in a car when they retire it?” I’ll remember you.

  • Steve

    Could Chris and his inside source be suggesting a scenario such as this: a renter returns a rental car brim full of fuel, the rental company then siphons a gallon off the top, then rents the car to the next customer with a “full” tank of gas. The gas gauge would still likely read “Full”, but the rental company has now stolen a gallon of fuel from the next renter because, ostensibly, at most rental car companies, “cars are rented with a full tank of gas.”

    I think the point of the article is this: the potential for using a “gas reclamation” service for fraudulent purposes grows as gas gets more expensive.

  • Michael

    I have to agree with the consensus here who left comments… it doesn’t make sense that this is an issue for consumers. You said your insider disagrees. Can he explain to you more clearly why?

    I still don’t get the point about asking if the vehicle is about to be returned, a renter might be entitled to a refund. Practical scenario:

    New car gets shipped to car rental agency with empty tank. Car rental company invests $64 to fill up the 16 gallon tank.

    Renter 1 rents car… uses 4 gallons. Replaces 4 gallons.

    Renter 2 rents car… uses 6 gallons. Replaces 6 gallons.
    ….
    Renter 528 rents car…. uses 7 gallons. Turns out the car is being retired when he returns the car. Does he have the right to say, if he knows the car is being retired, “Hey, you owe me a refund on the gas thats left in the tank”.

    Of course not. He used 7 gallons…. He should return it full with those 7 gallons replaced just like Renters 1-527, or pay the car rental company to refill it.

    The issue is that the car rental company has a car its about to return that has a full tank of gas. They invested the original $64 to fill it, they have every right to recollect it. It has nothing to do with the consumer losing out. Quite frankly, I’d like to see them to this… so they can recoup something legitimately rather than trying to fleece their customers with sneaky charges like $2 “top off” fees.

  • Joe Farrell

    Hey Steve – the ‘gas reclamation service’ only works when you are dealing with a hundred cars. I’d be more worried about the car washers and cleaners siphoning a gallon out of 15 cars a week the olde fashioned method and never buying gas for their personal car.

  • nodumblond

    Um….. actually, can I add a variation to this argument??

    The rental car company my organization rents from is notorious
    for giving us vehicles without a full tank of gas
    (the story is that they’re shorthanded and don’t
    always have time to go fill the car up before you get there).

    While they mark the gas level on the rental agreement
    and tell you to ‘just return it with gas up to that
    level’, you KNOW that to actually fill the tank to
    anything other than F is an exercise in wasted
    time and effort.

    Of course, they offer to go take the car and fill it up — while you wait. Assuming you have time to do that. Which is rarely ever.

    I’m sure this isn’t the only person this happens to. All I have to say is: ARGH.

  • Bob

    Agree with most of the other comments. This is confusing but not an issue for me. What is of more concern is car rental companies that fuel to the 95% level instead of 100% and the gauge isn’t accurate enough to reflect that.

  • http://www.coralbrief.com Andy

    Am I the only one in this crowd who only fills the tank to the point where “F” is hit when I “fill” the tank prior to returning it?

    If you operate on the assumption that the tank is filled to the minimum point to hit “F” when you get the car; and you return it the same way, you don’t have to worry about siphoning issues. And you will be in full compliance with your rental agreement.

  • http://www.JimsDiscountDeals.com Jim Coates

    It’s amazing to me that so many people can miss the two points Chris is trying to make. Let’s see if I can simplify:

    Chris’ first point: You return a car with less than a full tank. The rental car company charges you, say, $5/gallon to refill it, because they have to go out and buy $4/gallon gas and pay for the labor to do so. However, what they actually fill it with is “reclaimed” (siphoned) gas that didn’t cost them anything. Should that be considered fair?

    Chris’ second point: A car is returned with the needle pegged over the full line. The rental car company siphons off a gallon or two and the needle will still read full. The next person who rents that car will have to put in a gallon or two more than he used to peg the needle. Repeat this by a few hundred or a few thousand cars a day and you have a significant little operation going.

    Now do we all get it?

    Jim

  • Rick Damiani

    I think Jim gets it in the second senario, but that’s hardly a new practice. The frist one (cars filled with fuel siphoned form other cars) seems like it would be way too much trouble, and no less ‘fair’ than a rental agency using it’s own on-site pumps to fill tanks with gas they purchase at wholesale prices. Which is exactly what the larger sites do.

  • Laurence

    Andy is the one here who has the more likely scenario. The “siphoning” is more often done by customers who fill up the tank to “F” when there’s room for another gallon or two in the tank. Then the next customer fills the tank until the pump clicks, and he’s ripped off for the extra gallon.

    When I rent a car, I set the trip odometer to 0, then when I return I put in just enough gas to cover the mileage I drove.

  • Mr.Airport

    With the price of gas climbing everyday, the option for prepaying for a tank of gas for your rental car holds possbilities. Think of those travelers who booked online months ago and bought the tank quoted at 3 bucks a gallon – before it hiked another dollar.

    Now, I have taken the prepaid gas option maybe twice in my traveling life. But I remember the trip to Little Rock years ago when the price quoted at the counter was like $1.49 per gallon. Seemed like a good deal at the time and I bought it. However, after I returned the vehicle and I checked the charges, little did I know the prepaid gas charge was subject to a litany of taxes, making the actual price $1.80+ per gallon. So goes that bargain.

    Now, if we magnify those numbers to today’s prices, there will be a BIG difference.

    Once more thing, while we are on the subject. I remember reading many rental contracts where it says “this vehicle contains 18.5 gallons”, but the owner’s manual in the glovebox says that model has a 17.0 tank. Looks like another “profit center” for the rental car company.

    Happy travels,

    -gary

  • Mark

    Hi Elliott,

    I recently flew into Las Vegas and rented a car from Alamo.

    I drove straight drove straight from the rental pickup to the Tropicana hotel and parked it on the lot just behind the building next to a pole with a video camera.

    The next morning when I returned to pick up the car, I suddenly noticed that I had less than a half tank of gas left!?

    The car was a Chevrolet Equinox and this had no system to lock the gastank filler opening!?

    I went back to Alamo and explained the situation. They told me this in this case they would accept if I brought the car back with only a half full tank.

    So it looks like not only the rental companies might be “siphoning” due to the high gas prices….which by the way are still only have of what we pay over here in Europe!

    Regards,
    Mark

  • Mark

    sorry…

    “which by the way are still only have of what we pay over here in Europe!”"

    should ofcourse read:

    which by the way are still only half of what we pay over here in Europe!”

  • susan jones

    This is on a slightly different topic, which is the extra “fees” charged when purchasing a tank of gas in advance when renting a car. I used the prepaid gas option for the first time, when renting a Budget car as I figured that since I was keeping the car for a week, by the time I had to refuel, gas prices would probably have jumped another 10 cents. When buying the gas, I was told that I was getting it for $3.86/gallon, and this is what I was charged. However, that amount was included into the “taxable total”, which, in Los Angeles, where I rented the car, is taxed at a rate of 8.25%. Therefore, instead of paying 3.86/gallon, with the added tax, I was paying $4.19/gallon. I called Budget to find out why they charged this additional tax on gas that I had purchased, and they said they were required to do this by law. So, buyer beware – it never pays to take the prepaid fuel option!

  • Business Man

    Why is this considered a scam? They are recovering what belongs to them in the first place… this is a smart business practice.

    P.S I would like to know who your “insider” is… lol.

    P.P.S. I am an insider, I happen to own one of the major fuel reclaiming companies that recovers the fuel for these rental car companies.

  • Kevin

    Profits from Excess/recovered gas in the tanks is built into the cost of doing business by rental companies.. With out the money from the reclaimed gas our rental rates probably would be 50c per day higher…

    No harm here..

  • John

    @ Jim Coates
    @ Elliot

    Worthless issue, can’t you find something more relevant to discuss? Boring, old news, no real issue, just a good business practice.

  • Jim

    Elliot, you need to publish an apology to the rental car companies for this one. First of all, the barcode may tell you that the car’s rental life is over, but that does not mean that they don’t go past that deadline. There are many times the car is used as a rental even though the computer says it’s time to retire it. If they run out of cars to rent, they will use that car in a heartbeat. Even if they are running low on cars or foresee that in a week they will be low, they will hold onto the cars and rent them. Get your facts straight and really get an understanding of the business before you make stupid comments. Also, who’s gas is it anyway? If the customer gets the car full, they fill it up before bringing it back. So you are saying that the rental car company should just say, “don’t worry about the gas, it’s on us.” I can see you are a great businessman. I guess you are the guy who calls up and yells at a company that charges you shipping and handling? You would have used the post office instead of Fed-X so they should refund you the difference. Get it right next time please!

  • Carver

    @Jim

    Not that Chris needs me to defend him, but any points that you might have made are completely overshadowed by the untoward tone of your post.

  • Mel

    Being an insider, this is how it works:

    Bad Practice:
    They set the dial to the desired gas distribution level (Of course it is not toped off.) They save approximately 1.5 gallons per vehicle. They don’t bother with siphoning 1.5 gallons after you return it.

    Next: Just Business (Not Bad)
    The rental car company reclaims the fuel just before sending it to auction or there reduced sell lot. They have a contact company (In most cases) reclaim the fuel and pump it back into their tank. They pay that contract company around $1.00 per gallon for this service. When they sell you that gas then yes you pay the same as you would for any gallon purchased. Yes they make some money on it but that is what they are in business for. Are they in the rental car business, yes of course but business is business and I don’t see it as a rip off to me. Consider this, if they didn’t do this would a gallon cost you any less?

    I think this was a worth while posting, even if the car rental companies aren’t being crooks in this area.

  • rex

    The research you have done on this article, is missing information and MISLEADING. You should of talk to RAC (Rent-A-Car) managers who know what’s happening. You failed to mention that when a car rental company receives a new car from the manufacture. There is about 1-2 gallons of gas in the vehicle. (I seen them run out of fuel taking cars off the car transport)
    The RAC company must fuel every new car they take into there fleet. An average of 20 gallons per vehicle @ $3.00 per vehicle = $60.00. Most major car rental companies purchase over 100,000 vehicle each year. They have the right to reclaim that fuel when the vehicle is remove from there fleet. Its there Fuel!!
    If you own a car rental company with ten of thousand cars nation wide you do the same.

    Rex- 24 years with Avis

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